A top academic has questioned the Scottish Government’s plans to freeze council tax for another year.
Professor David Bell, of Stirling University, said that it was “difficult to make a strong case” for the move, based on the government’s own priority for economic growth.
When he revealed his draft spending plans last week, Finance Secretary John Swinney told councils their budgets would be cut by only 2.6% if they agreed to implement SNP policies, such as maintaining the council tax freeze and guaranteeing 1,000 police officers on the beat.
The alternative would be a 6.4% cut.
Prof Bell, adviser to the Scottish Parliament’s finance committee, questioned the wisdom of the policy in his analysis of the draft budget for 2011-12.
He said the freeze would have a “relatively small impact” on most household incomes. The main beneficiaries would be middle-income households, with married pensioners gaining the most.
“There is no case that it supports economic growth and its fairness implications are certainly not clear,” Prof Bell said.
Other arguments against the freeze were that the council tax was a relatively efficient method of raising money and “almost impervious” to the economic cycle.
The professor said it was “strange” to cut revenues from property taxes when revenues from other sources such as income tax, corporation tax and stamp duty had fallen.
His paper on the draft budget supports aspects of it, but raises questions about the impact.
The public-sector pay freeze for those earning more than £21,000 a year could result in increased staff turnover, poor industrial relations, and a reduced willingness to improve performance.
Prof Bell warned the government would have little control over the cost of concessionary fares, public pensions and free personal care – all “demand-driven”.
He said it was not clear how colleges, which have few alternative sources of funding, would deal with reduced funding.
The professor warned: “This is particularly a concern in respect of the skills and therefore the growth agenda.”
The paper will form the basis of advice to the finance committee as it dissects the government’s spending plans.
Prof Bell concluded: “There is no doubt that this is a difficult budget. It has both positive and negative aspects.”
