Fairer Council Tax: consultation analysis

Analysis - Question 9: Do you think there would be any equality, human rights, or wellbeing impacts as a result of the proposed increases in Council Tax rates for properties in Bands E, F, G and H? Please tell us what you think these impacts would be.

Quantitative analysis

• There were 14,359 responses to this question (1,282 from Bands A-D and 13,077 from Bands E-H).
• Out of all responses, 79% of respondents believed that there would be any equality, human rights or wellbeing impacts as a result of the proposed increase, 9% disagreed and 13% did not know.
• A smaller proportion of respondents in Bands A-D (67%) responded “Yes” compared to respondents in Bands E-H (80%).
• Individuals and organisational respondents were equally likely to respond “Yes” (79% of respondents).
• A greater proportion of respondents who opposed a proposed tax increase thought that the increase would lead to impacts on equality, human rights or wellbeing (81%) compared to respondents who supported an increase (35%).
• Out of 15 councils responding the consultation, 73% (11 councils) believed that there would be any equality, human rights, or wellbeing impacts as a result of the proposed increase. Out of the remaining councils, 20% (3 councils) responded “Don’t know” and 7% (1 council) did not answer the question.

Qualitative analysis

There were 11,655 responses to the free-text component of question 9 (in which respondents were asked to explain their answer). The vast majority of responses to this question were short and did not go into depth around specific equality, human rights or wellbeing impacts. In addition, many responses to this question focused on general opposition to the increase in Council Tax or suggested changes or improvements to the Council Tax system. As these themes were also discussed in Question 1 (and all other open-format consultation questions), detailed analysis of these themes can be found in Question 1.

Proposed increase could hurt the financial position of households

Among all direct responses to the consultation question, the most common theme raised by respondents was financial stress caused by the proposed increase. Respondents expressed concern that households could be pushed into difficult financial situations if they could not afford the increase, impacting their mental and physical wellbeing and their overall quality of life (due to a decrease in their disposable income). These respondents believed that the Council Tax increase was occurring during a challenging period for households due to an overall cost of living crisis (with higher inflation rates, mortgage payments and utility costs). As a result, respondents believed that households might have to spend less money on heating their homes, buying sufficient food or other necessities.

“We believe that the proposed increase in Council Tax rates will have a negative impact on wellbeing outcomes in Scotland. We believe that this increase in Council Tax may push more households into financially precarity. This higher tax rate may lead to increased financial stress which will impact negatively their mental and financial wellbeing.” (Organisation)

“[…] There is a very real risk here to people’s wellbeing by placing them under further financial strain at a period where inflation is at its highest for 40+ years. The fixation on people's ability to pay and taxing the wealthy misses the point that many lower to middle income families sit in the affected bracket and the stress of trying to manage household finances which was always difficult has become significantly more so recently.” (Individual, West Lothian, Band F)

“Incomes are limited and already stretched with the huge increase in the cost of living. Any additional costs are going to mean we need to cut down even further on necessities.” (Individual, City of Edinburgh, Band G)

“We're in a rural area with an ageing population and many of the households in these bands will consist of two adults, many of them on fixed incomes i.e. in receipt of a pension. It could well affect their physical and mental health knowing that they have increased council tax to pay on top of high energy bills.” (Individual, Perth and Kinross, Band F)

Some respondents believed that the proposed increase could negatively impact households’ ability to afford their current homes (due to the reduction of their disposable income), leading to potentially greater levels of housing insecurity. As a result, the potential impact on individuals’ ability to meet their basic needs and access essential services could jeopardise human rights such as the right to affordable housing.

“[…] Adequate housing is considered a fundamental human right. If the proposed tax increases make it financially unfeasible for some residents to stay in their homes, it could infringe upon their right to adequate housing. This may lead to displacement, reduced housing security, and potential impacts on the overall quality of life for affected individuals […]” (Individual, Glasgow City, Band E)

Other respondents mentioned specific groups whose financial situations could be especially impacted, including the elderly, households on fixed incomes (including pensioners), single parents and both low-income and middle-income households. These respondents felt that the Council Tax increase could have potential equality and human rights impacts on these groups.

“Vulnerable groups, such as the elderly on fixed incomes or individuals with disabilities, may face particular challenges with the proposed tax increases. For them, the ability to afford higher tax payments may be even more limited, potentially leading to increased social isolation and decreased access to essential services.” (Individual, Glasgow City, Band E)

Impacts on mental health, including stress and anxiety

The potential impacts on mental health, which were most frequently mentioned by respondents, were stress and anxiety about their ability to afford the increase in Council Tax.

“A tax increase can lead to financial stress and anxiety among residents, negatively affecting their mental health and overall well-being. The constant worry about meeting increased tax payments can have a detrimental impact on individuals and families.” (Individual, Fife, Band E)

Respondents also cited moving as a key source of potential stress – downsizing to a smaller, more affordable home could take them away from their friends, family and existing support networks and potentially lead to greater isolation for these individuals.

“It seems unfair to penalise people who have chosen to live in a particular place not realising that they would be called upon to pay even more to live there than they had assumed when they move[d] there at first. For many people this could result in major mental health concerns - worries over affordability of living in their property, concerns about being able to stay in the same area if their home becomes unaffordable and worries about being homeless if they have to leave. Should these people have children then the concerns will be even more - worries about moving and uprooting their family, schooling, potentially moving away from family and a support network of family and friends, etc.” (Individual, Scottish Borders, Band F)

Some respondents believed that the mental wellbeing of middle-income households could be impacted, as these households might feel they did not have access to support from local authorities or the Scottish Government to help them financially.

“[…] with cost of living issues, strikes and salary/inflation, living in a more expensive property does not insulate residents from fewer costs and so, this may well cause further hidden stress and anxiety in those populations traditionally seen as 'better off', with resultant mental health and wellbeing impacts. The perception there is no help for them exacerbates this, and that they seem ungrateful and should think of others worse off than themselves is socially and ethically pressuring on the psychological wellbeing of some […]” (Individual, Renfrewshire, Band E)

Other respondents who discussed mental health impacts noted that the proposal could potentially lead to an increase in demand for mental health services, putting pressure on the NHS.

“Given the current cost of living crisis the proposed level of increases will place considerable pressure on people’s finances and their ability to meet the ongoing commitments, this in turn could affect their mental health and place the NHS under additional strain which it can do without at present.” (Individual, East Ayrshire, Band H)

“The poverty caused will also increase mental health issue due to stress caused by unfair increases during a cost of living crisis. This will increase costs within the NHS […], eradicating [sic] any benefits from the additional tax take.” (Individual, Glasgow City, no band provided)

Impact on community cohesion and societal inequalities

Some respondents believed that the Council Tax increase could lead to greater division in communities. For example, respondents suggested that people in higher bands impacted by the increase might feel resentful or upset at people in lower bands not impacted by the increase due to a perceived lack of fairness in the increase.

“[…] a wealthy household in an unaffected band will pay less than an equally wealthy household in a higher band. This is totally unfair. Lowering household incomes unfairly and disproportionately could affect material wellbeing and could also foster feeling[s] of resentment and ill will among people who see wealthier households than their own pay less towards public services.” (Individual, North Lanarkshire, Band E)

“Well-being would be severely impacted by further financial strain for those in the bandings, and [there would be] general discontent and fractured relationships within communities and wider across Scotland due to how differently people would be treated by this measure.” (Individual, East Dunbartonshire, Band F)

Other respondents thought that the proposed tax increase represented unequal treatment and could widen inequalities in society. In particular, respondents believed that the tax increase could reflect inequalities in perceived treatment by the Scottish Government based on what homes people chose to buy and where people chose to live:

“There are bound to be people, both young and old, who will be worried about how they are going to pay. They may well feel victimised. Those in newer, more recently valued properties are not being treated equally with those in properties valued many years ago. […] I think it promotes inequality, as people in areas with higher property values (like Edinburgh or Aberdeen) but on similar incomes to someone elsewhere are being treated more harshly.” (Individual, Perth and Kinross, Band G)

Positive impacts on equality, human rights and wellbeing

A small number of respondents who agreed with the proposed increase in Council Tax stated it could have positive impacts on equality, human rights and wellbeing by reducing the unfairness and regressivity inherent in the Council Tax System. By addressing issues of fairness in the current system, this would reduce overall inequalities and improving the provision of services by local authorities.

“The current Council Tax system is regressive and therefore deepens inequality. Those in lower Council Tax bands are more likely to be women, lone parents, people of colour, disabled people, unpaid carers and migrants and refugees - in the current system they are paying more than their fair share while wealthier people are benefiting from this […] Poverty and inequality have a negative impact on wellbeing, both of individuals experiencing it, and of areas and nations. These changes to try to remove some of the unfairness inherent in our Council Tax system will therefore have a positive impact on wellbeing overall.” (Organisation based in City of Edinburgh)

“There would be positive impact[s] as these changes would reduce the regressivity of council tax, and any subsequently available funds could be used to increase access to housing.” (Individual, Perth and Kinross, Band B)

“Broadly speaking, the human rights impacts are likely to be positive. A lack of availability of essential services, such as social care, child care, and public transport, has significant implications on individuals realising their human rights. […] The groups whose rights are least fully realised are also likely to be those groups most reliant on public services to support them in their lives, and to have lower incomes and live in less expensive houses. By increasing the amount of money available for councils to spend on local services, there is the possibility that spend will contribute to the progressive realisation of human rights.” (Individual, Glasgow City, Band C)

However, the majority of respondents who agreed with the proposed increase still commented on potential negative impacts on wellbeing arising from the increases placing some households at risk of financial hardship.

“[…] it will support more people to have access to their human rights if local authorities have greater budgets to deliver vital public services adequately. However, people’s income needs to be considered, in order to ensure that this reform creates more equity, with wealthier people contributing more to our taxes, rather than increasing inequality […]” (Organisation)

“The vast majority of people accept the need for taxation to fund public services. However, imposing arbitrary changes to a tax already so loosely grounded in the reality of current property wealth/income does not seem a legitimate means of taxing the public. Many people are going to be impacted based not on their current wealth or income but because of property valuations over three decades old - this will no doubt cause much undue stress and anxiety for those already feeling the effects of the current inflationary environment.” (Individual, City of Edinburgh, Band D)

Themes raised by councils

The most common theme raised by councils was the potential disparate financial impacts of the proposed tax increase on households which might not have the ability to pay. Specific groups referenced by respondents included households without any form of Council Tax Reduction support, households with individuals who have disabilities and individuals who live alone (such as single parents and the elderly).

“The impact will be more severe on residents who currently live alone, which include single parent families and the elderly […] the impact for some families, whose finances are already stretched, could result in increased poverty for them and their children.” (Council)

Some councils also stated that impacts on equality, human rights and wellbeing were better understod at a national (rather than local) level, and other councils urged the Scottish Government to carry out a full impact assesment or a concurrent review of Council Tax Reduction.

“The varied nature of Council Tax dwellings within each Band and the subsequent modelling of these proposals will provide evidence at a national level on whether there are such impacts. It is our view that this will be better understood at a national rather than local level and thereafter the findings can inform equality and other relevant assessments.” (Council)

“Since devolution, there have been a number of reviews and much debate around reforming council tax. Among the most significant was the Local Tax Commission (2014-15) […] It is a critical deficiency in this consultation has merely re-stated but not updated the 2015 analysis. In the absence of full analysis and a comprehensive impact, the Council considers that the equality, human rights, and wellbeing impacts cannot be considered properly, and that the proposals should not progress until this is done.” (Council)