Council tax bands to be adjusted, but ministers shy off wider reforms

Scottish ministers unveiled their proposed council tax reforms yesterday – and faced criticism of the timid nature of their proposals.

Residents of properties in bands E-H will pay more, through an adjustment of the multipliers, though the 75% of households covered by bands A-D will be unaffected by the changes.

Multipliers relative to band D properties will be increased from April 2017, as folows:

• for band E, from 1.22 to 1.31;
• for band F, from 1.44 to 1.63;
• for band G, from 1.67 to 1.96;
• and for band H from 2.00 to 2.45. 

The annual average increases in council tax as a result of these band adjustments will be £105 for band E, £207 for band F, £335 for band G and £517 for band H.

These changes are expected to raise additional net revenue of £100m per annum.

At the same time, from 2017, the freeze will be replaced by discretion for local authorities to increase tax by up to a maximum of 3% per year. This could raise additional revenue of up to £70m per year.

There will be a targeted relief for around 54,000 households in properties in bands E to H on net incomes below the Scottish median for their household type, up to £25,000. These households will be entitled to claim an exemption from the increases from changes to the banding system through the council tax reduction scheme.

The scheme will be further amended to extend the relief available for low income households with children. An increase in the child allowance of 25% will benefit 77,000 households by an average of £173 per year.

However ministers are avoiding any property revaluation exercise, which it is feared would lead to much bigger bills for some. And despite earlier expressions of support for the Commission on Local Tax Reform, they are not following up the Commission's proposal that no single local taxation system is fair and that a mix of measures should be adopted, with elements of local income tax and specific local taxes and charges combined with a property tax.

First Minister Nicola Sturgeon described the proposals as "reasonable and balanced", but David O'Neill, president of COSLA, who chaired the Commission, said its work had been "ignored" and the proposals announced were a "damp squib".