THE SNP first pledged to reform council tax before they even came into government in 2007. So, what happened since then?
It became a key pillar of the minority SNP government, with a local income tax planned to be brought forward to replace it.
After a major setback concerning £400 million of funding being withheld from the UK Government, the SNP have rowed back on the pledge to a stagnated version in 2024.
2007
In 2007, the SNP advocated replacing Council Tax with a “local income tax”. This would have seen Holyrood raise income tax by 3p, with the aim to replace the money raised by council tax.
The Scottish Parliament backed the idea but facing opposition across Holyrood and Westminster, the SNP were forced to drop the plan with the Government not winning enough support for the proposal.
Files released in 2023 by the National Records of Scotland showed that then finance secretary John Swinney told Cabinet colleagues the reform plans would likely “require UK legislation”.
When Swinney (below left) discussed the issues with the Cabinet, he said HMRC had now indicated that “co-operation would be unlikely, and that, at best, the Government could expect a very long lead time for implementation of collection arrangements”.
The UK Government did later confirm that replacing council tax with Labour’s suggestion of a new property-based tax would see £400m of council tax benefit heading to Holyrood – but this funding would not happen under the SNP’s proposal for local income tax.
At the time, first minister Alex Salmond argued it was “unsustainable” for Westminster to pay the money towards Labour’s replacement levy and withhold it for the SNP’s.
2011
The proposals were subsequently dropped and by 2011, the likelihood of a local income tax was drifting away.
The SNP told the electorate they would “consult with others to produce a fairer system based on ability to pay to replace the council tax and we will put this to the people at the next election, by which time Scotland will have more powers over income tax”.
During this time, a council tax freeze was in place, which would last for nine years.
2014
The Commission on Local Tax Reform found that the council tax freeze “cannot go on”, and there were three options on the table for replacing it.
The report said: “For eight consecutive years council tax bills have been frozen. But this cannot go on forever.
“Local tax and the funding of local services should be a central part of local democracy, with voters able to make choices about how much tax they should pay and for what level of public service.”
The commission recommended that the Scottish Government must create a replacement property tax, a land value tax or a local income tax.
2016
Then-first minister Nicola Sturgeon announced that people in Scotland’s four highest Council Tax bands were to pay more, with the average band E household paying about £2 per week more, and the average household in the highest band about £10 a week more. This was ahead of the Council Tax freeze coming to an end in 2017.
2021-23
In the party’s 2021 Holyrood manifesto, it said they were “committed” to reforming Council Tax “to make it fairer,” and said a citizens’ assembly would be convened to discuss the route forward. A joint working group was also formed to focus on sources of local government funding and Council Tax reform.
However in 2023, Tom Arthur, who was public finance minister at the time, admitted any plans would be delayed – with reforms not expected to be proposed until at least 2026. Arthur told MSPs he could not give “a concrete timescale” for reform but added that it remained “a key priority” for the Scottish Government.
Later in the year, in one of his first policy announcements at SNP conference as first minister, Humza Yousaf (below) announced a fresh freeze on Council Tax in Scotland to help people through the cost of living crisis. However, the proposal to do this was met with a mixed response.
The Greens, who were then in a power-sharing agreement with the SNP, raised concerns about the effect the freeze could have on “already strained frontline public services” if it was not properly funded by the Government.
Several commentators, as well as Greens and SNP activists, would later say this was the beginning of the end of the Bute House Agreement since the Scottish Greens and council leaders were not consulted on the policy.
2024
So where does the SNP now sit with its 17-year-old commitment?
Work on both the citizens assembly and the joint working group has seemingly stalled, reportedly due to “a change of ministerial positions”, with the group meeting this past week to discuss “a process of engagement activity” that could achieve consensus, while “recognising the need to bring competing voices into the conversation”.
The Scottish Government said the group “have agreed to continue to meet regularly”.
The SNP said: “The SNP is committed to reforming the Council Tax to make it fairer – the Scottish Government has been exploring this with Cosla and through a public consultation.”
Finance Secretary Shona Robison (above) said: “We have established a Joint Working Group with Cosla to consider Council Tax reform to consider meaningful changes to the current system, including longer-term reform.”
“We acknowledge, in its current state, council tax is not as fair as we would like it to be. The group has already explored a broad range of measures with a core aim of providing fairness to the system and successfully delivered changes to the Council Tax treatment of second and long-term empty homes.
“This includes a 100% council tax premium on second homes from 1 April 2024.
“We are invested in delivering fairer, more inclusive and fiscally sustainable forms of local taxation. To that end, the group agrees that to enable progress we must build a consensus.”
An SNP spokesperson said: “The SNP is committed to reforming the Council tax to make it fairer - the Scottish Government has been exploring this with Cosla and through a public consultation.”
