Fairer Council Tax: consultation

Joint Foreword

The Scottish Government and COSLA (on behalf of Local Government) would like to invite you to respond to this consultation on a Fairer Council Tax System, which seeks views on the Council Tax charges (also referred to as multipliers) for properties in valuation Bands E to H.

We are committed to our aim of delivering fairer, more inclusive and fiscally sustainable forms of local taxation. Through the Joint Working Group on Sources of Local Government Funding and Council Tax Reform (JWG), we are exploring proposals for meaningful changes to be introduced to Council Tax. This includes changes to reflect the circumstances created by the cost crisis, and also approaches to longer term reform of the system.

Council Tax revenue contributes to the huge range of vital services that Councils provide. This includes funding for our schools, social care, support for housing, environmental and waste services, roads and transport, and many more. These are services which we all rely on.

We acknowledge the criticisms of the present Council Tax system, which is perceived by some stakeholders as unfair and regressive because it levies a higher tax rate on lower value properties, and a lower rate for higher value properties. The Scottish Government increased the Council Tax Band E to H multipliers in 2017 which went some way to addressing this problem, but Council Tax remains regressive. A chargeable property in a Band H has a Council Tax liability of about three times that of a Band A property, but is, on average, worth about fifteen times the value. The focus of the proposal in this paper is to address the balance of burden within the system, and we seek your views as to whether those in properties in the highest bands should be making a greater contribution, where they can afford to do so.

In seeking views on changes to the present Council Tax system, we emphasise the importance of the Council Tax Reduction scheme which protects the most financially vulnerable and ensures that nobody in Scotland will have to meet a Council Tax liability they cannot be expected to afford. This will continue regardless of the property band, or the associated Council Tax charges for that band, that an individual may be liable for.

We are pleased to be taking forward this work in partnership, and the proposal contained within this consultation paper is just one change that forms part of a broader range of potential measures that are under consideration, and which taken together will seek to provide fairness to the system by ensuring support to those that need it most. Therefore, we would like to ask for your views and perspectives on the potential change outlined in this paper, in order to make progress on our commitment to a fairer local taxation system.

Tom Arthur MSP

Minister for Community Wealth and Public Finance

Cllr Katie Hagmann

COSLA Resource Spokesperson