Council tax reform ‘won’t be complete in this decade’, says Robison

Reform to the council tax system “won’t be complete in this decade”, Scotland’s Finance Secretary has said.

The SNP-led Scottish Government has pledged to change the system since coming to power in 2007, but little progress on reform has been made.

On Monday, the Government published a consultation document, with Shona Robison saying ministers do not endorse any of the four different systems proposed in the document, but are looking to see if “consensus around a unified position” forms.

The first pledged option would be a straight revaluation of properties which has not been done since the early 1990s, the second would see a new 12-band system introduced to replace the current eight bands, and another would see a “progressive 12 band system” where those in the lowest valued properties pay less than other proposals, with an increase for those in higher bands.

The fourth option proposed a progressive 14-band structure.

All four options are presented as “revenue neutral”, the document said, to ensure the same amount of funding is available to local authorities.

Speaking as the consultation was launched, Ms Robison said: “Any future changes to council tax must be informed by robust evidence and wide public debate. As part of our joint programme of engagement with Cosla, we are seeking views on these matters.

“The Scottish Government is not advocating for a specific reform, rather the aim of this work is to examine whether consensus around a unified position on council tax could be achieved.

“Any reform proposals that come forward in the next parliament would clearly be contingent on securing that unified position, would require a long delivery period and would likely not be complete in this decade.”

With the consultation due to close on January 30, any potential changes would come after next year’s election.

A report published alongside the consultation from the Institute for Fiscal Studies (IFS), looked at the potential changes the system could bring.

Under the simple revaluation, the think tank found around half of properties would remain in the same band, while a quarter would move up and another quarter would move down a band, but in areas where house prices have increased most since 1991, such as Edinburgh, the increase will be more steep.

In the capital, the report found, two thirds of properties would see an increase in council tax band.

The other three systems would see bills for the most affluent neighbourhoods increase by around 14%, compared to an 11% fall in the least well off areas.

The more progressive systems could also hit house prices, the think tank warned.

“In our middle scenario for the effect of tax on prices, under the 12-band and 14-band less regressive systems, we estimate that properties worth £60,000 would increase in value by an average of 6–8% as tax bills are reduced,” the report said.

“Conversely, we estimate that properties worth £500,000 would fall in value by 3–5% as tax bills are increased.

“Impacts would be smaller for a pure revaluation and bigger for the continuous proportional system.”

Katie Hagmann, the resources spokeswoman for local authority body Cosla, said: “Local government has long called for a fairer and more proportionate council tax system – one that reflects the needs of our communities and supports our local services.

“Reform is long overdue. This important work marks the beginning of a process to build consensus around a better system of local taxation.”