Welcome to the Public Works blog.

Public Works is UNISON Scotland's campaign for jobs, services, fair taxation and the Living Wage. This blog will provide news and analysis on the delivery of public services in Scotland. We welcome comments and if you would like to contribute to this blog, please contact Kay Sillars k.sillars@unison.co.uk - For other information on what's happening in UNISON Scotland please visit our website.

Tuesday, 29 March 2016

Library Troubles

The BBC has published details of its investigation into the impact of budget cuts on our libraries. The report contains data from FOI requests to local authorities. It contains details from responses from 207 councils across the UK.It's not a positive picture.

• 343 libraries have closed
• A further 111 are planned this year
• The number of paid staff working in libraries has dropped by 25%. That’s 7933 less people than in 2010

Many libraries are only providing a service because community groups and volunteers have stepped in to keep them open. There are now 31,403 unpaid volunteers (a change from 15,861 in 2010). Having volunteers, is though, no replacement for the kind of services a professionally qualified librarian provides.

Library closures have been fewer in Scotland but the number of paid staff working in libraries has still fallen. With the upcoming cuts to local government budgets we believe that the worst is yet to come unless we can run effective campaigns against the cuts.

Glasgow hasn’t yet closed any libraries staffing levels have dropped from 360.1 to 287. Volunteer numbers have increased from 64 to 91
Edinburgh has again maintained building and mobile service numbers but staff numbers have dropped from 315 to 295. Volunteer numbers have increased from 239 to 258
Dundee again no actual closures but staff numbers have fallen from 117 to 102
West Dunbartonshire has closed two libraries/mobile libraries and staff numbers have fallen from 85 to 60
East Renfrewshire has closed no libraries but staff numbers have fallen from 67 to 52
North Lanarkshire no closures staff numbers have dropped from 344 to 305
The article allows you to find the results for your own local authority by clicking here

You can read UNISON's report on the impact of cuts on libraries
and our submission on why libraries matter here

Wednesday, 23 March 2016

Talking about taxation

Something very strange is happening in political discourse in Scotland – everyone’s talking about tax.

The Scotland Bill hasn’t even been passed, but it is having the desired effect of moving the debate from spending, to a debate that includes how we will raise the necessary resources. This is a debate that goes to the heart of the sort of Scotland we want to live in.

Yesterday was a busy day for the taxation debate.

Fiscal Framework

I started the day at the
IFS seminar on the recently agreed fiscal framework. The three David’s, Bell, Eiser and Phillips (is it only David’s who do numbers?), took us through the different models for adjusting the block grant the Scottish Government receives from the UK Government to reflect the new devolved tax and welfare powers.

 Adjusting it in the first year is straightforward; the tricky bit is indexing future years. The UK government favours the Comparable Model (CM) which recognises that Scottish revenues per capita are lower than rUK, but the Scottish Government objected because it does not account for Scotland’s slower population growth, which is likely to be half that of rUK. The Scottish Government therefore favours the Indexed Per Capita (IPC) approach which increases in line with comparable UK spending and the rate of population growth in Scotland. The compromise reached is that the Comparable Model will be used, adjusted to achieve the outcome delivered by the IPC approach. This holds until a review in 2021-22.

The IFS argument is that while this meets the Smith Commission’s ‘no detriment’ principle, it fails the ‘taxpayer fairness’ principle. While I accept the numbers, I beg to disagree on their interpretation. As a trade union official, I think I understand very clearly what ‘no detriment’ means in an agreement. On the other hand, ‘taxpayer fairness’ is less clear. I would also argue that this is fair because Scotland does not have all the economic levers of central government. A point developed in Jim Cuthbert’s Reid Foundation

The fiscal framework does leave some risks for the Scottish Government. The agreement only insulates Scotland from UK wide shocks, not those that affect Scotland to a greater extent than rUK. In addition, the Scottish Government got fewer borrowing powers than it hoped, both for resource and capital borrowing - some way short of a prudential regime.

Scottish Government Income Tax plans

Next up, we had the First Minister
announcing the SNP plans for using the new tax powers. She said that no taxpayer will face a tax increase. However, they will reject the UK government's plan to cut the tax for middle earners by only increasing the 40p threshold by the CPI inflation rate, taking it from £43,000 to £43,387. They will slightly increase the basic personal allowance from the planned £12,500 to £12,750, avoiding this reserved power by the mechanism of a zero rate.

The FM said: "That increase will prevent higher rate taxpayers from receiving a real terms cut in their tax bills, but nor will they see their bills increase”. In addition, the SNP is now not proposing to increase the additional rate, for those earning £150,000 or more, from its current 45p level.

While not passing on Osborne’s 40p threshold tax cut is welcome, the rest of the package does nothing to tackle austerity, respond to the huge social challenges facing Scotland or make tax more progressive. Changes in tax allowances benefit all taxpayers.

I have covered this ground before and my colleague at the STUC, Stephen Boyd, puts it well in a Rattle
blog post this week, he said:

“No-one seems prepared to explicitly acknowledge three inescapable truths: if the social and economic objectives of Scotland’s two main ostensibly social democratic parties are to be achieved then total tax revenues will need to increase as a proportion of GDP; this increase will need to be delivered through devolved tax powers (higher transfers aren’t in the offing) and responsibility for funding this increase will have to be shared by more than just higher and additional rate taxpayers.”

As 83% of Scottish taxpayers pay the basic rate, we simply have to get real if we are to meet current needs, let alone address civil society’s shopping list. Labour and the Liberal Democrats have started to recognise that. Others must follow if they are serious about tackling inequality and providing decent public services.

Scottish Labour’s local taxation plan
And finally, Scottish Labour
announced that it wanted to scrap the Council Tax and replace it with a tax based on property values. Councils would also get discretionary powers to introduce new taxes including a Tourist tax and a Land Value Tax on vacant, economically inactive land. They would also devolve the surplus from the Crown Estate to local government.

In essence, this is similar to the plan recommended by the Burt Commission and closely matches UNISON’s policy position. Property values are easily understood and assessed, and provide a more progressive and certain local tax. We are always happy when political parties adopt our policies!

Labour has capped the increase at £3000 making it less progressive at the very top. I understand the desire to avoid £5000+ increases, but in the longer term the cap should be phased out. Equally, restricting increases to 3% is fine as a transitional measure, but once the new system has bedded in that should go. Otherwise it means councils have less control over setting the rate. Local democracy is the only proper constraint on a local tax.

After years of inaction we have local taxation proposals coming from all directions. Scottish Labour’s plan is a proper reform of local taxation, even with a bit of political expediency mixed in.

Whatever you think of the various proposals, we are at least starting to have a debate about tax in Scotland. It isn’t always comfortable, but perhaps that’s the point.

A balanced workforce for policing that delivers

Police civilian staff have taken the brunt of the cuts since the establishment of Police Scotland. Police staff have been subject to centralisation, budget cuts and politically driven targets. The process has been bad for policing.

Scotland needs a modern balanced workforce who can respond to the demands of communities.
Civilian staff do vital skilled jobs. Human resources, pay roll, 999 control centres, mechanics, fingerprint officers, crime analysts, fraud officers, and forensics.  Police officers may arrest criminals but its civilian staff who catch them. Our Police officers could not operate without support teams behind the scenes.
UNISON have launched our manifesto for Scottish Policing

The Scottish Government’s policy of maintaining 17234 police officers while making £1.1bn budget cuts by 2026 means it’s these civilian staff posts that go. That’s less skilled people to do the vital work which modern policing needs. And of course we end up with police officers doing jobs they are neither skilled, nor particularly enthusiastic, to carry out. Substituting higher paid police officers for police staff is not ‘best value’ – something Scottish Police Authority has a statutory duty to ensure happens.

The tragedy of the M9 has alerted us all to the impact of centralisation, de-civilianisation and reduction in police staff. However, we continue with control centre closures.
Scotland’s new chief constable says that he is committed to developing a ‘sustainable operating model’ and that he intends to allocate resources to the needs of the community rather than work to targets. It is refreshing to hear this. However despite UNISONs requests no serious research has been carried out into establishing how many officers are needed to police Scotland.

Scottish Police Authority has failed to provide effective oversight for this whole process. They must step up to the mark and engage with staff and listen and include trade union representation on the board to ensure all these issues are thoroughly scrutinised.

To read UNISON Scotland Manifesto for policing:  http://www.unison-scotland.org/2016/03/23/a-balanced-workforce-for-policing-that-delivers/

Tuesday, 22 March 2016

World Water Day 2016

Today is World Water Day. The 22nd March is designated as World Water Day by the UN to mark the importance of water and sanitation.

This year's theme is 'Better Water, Better Jobs'. 1.5 billion people work in water related sectors and nearly all jobs depend on water and those that ensure its safe delivery. Yet the millions of people who work in water are often not recognised or protected by basic labour rights. The theme in 2016 is therefore focusing on how enough quantity and quality of water can change workers' lives and livelihoods - and even transform societies and economies.

In Scotland we benefit from a public water service, unlike the rest of the U.K. Recognised trade unions ensure that basic labour rights are protected and we have a high quality water and wastewater provision, delivered at a reasonable cost. 

However, we should not be complacent. The privatisers have been chipping away at Scottish Water for years.

Many of our wastewater plants were updated using the ruinously expensive Private Finance Initiative (PFI). Those plants are still managed by private water companies and even the Water Industry Commission has suggested buying them out.

Contractors have been taking over large chunks of Scottish Water. 92% of the capital programme is delivered by private contractors.

This year the Scottish Government awarded a £350m contract to Anglian Water to provide water and wastewater to the Scottish public sector. Anglian is one of a number of English water companies who are happy to take public contracts, but less enthusiastic about paying Corporation Tax. 

Finally, on the horizon we have the trade agreements, CETA and TTIP. Both of these put public provision at risk, by allowing corporations to challenge democratic decisions to return services to public ownership. For example, Anglian Water is part owned by Canadian pension funds.

The EPSU was going to press their enormously successful European Citizens Initiative 'Right2Water' today. It calls on EU institutions and Member States to ensure that all citizens enjoy this right, that water supply and management be excluded from “internal market rules” and commercialisation, and that the EU increase its efforts to achieve universal access to water and sanitation. Despite huge support for the Right2Water movement, the European Commission has failed to act. An unambitious Communication released by the Commission in 2014 has been followed by two years of silence and no concrete legislation.

The tragic events in Brussels meant today's event was called off, but the campaign goes on.

World Water Day is an opportunity for us to remember that the clean water and sanitation we take for granted is not available world wide. We should celebrate our public provision, but remain vigilant. The privatisation sharks have not gone away. 

Thursday, 17 March 2016

Under Pressure

The latest Audit Scotland report on local government: An overview of local government in Scotland 2016, does not make for cheery reading. Revenue funding is now 11% lower than 2010/11 at a time of increasing demand. The report points out that, so far, councils have focused on “incremental savings to existing service” but with more cuts in the pipeline “councils should be evaluating options more significant changes to delivering services”
This confirms, albeit in management speak, what UNISON has been saying: that salami slicing is no longer an option and that without increased funding local government will no longer be able to deliver its current level of services.
The report confirms that savings have been made through job cuts and that more are planned due to the “significant funding reductions to come” and again confirms UNISON’s concerns about the impact of the loss of skilled staff on service delivery now and in the future:
The report calls on authorities to ensure that they have
“people with the knowledge, skills and time to design develop and deliver effective services in the future”
Public satisfaction with services is already dropping as the cuts begin to bite.

Key financial pressure on local government

Funding reductions
Increasing pensions costs
Reduced financial flexibility
Equal pay and the living wage

Key service pressures
Increased demand through demographic change
Health and social care integration
Service performance
Staff reductions

Local government delivers essential services across Scotland and requires adequate funding. The Scottish Government needs to ensure that local government is funded properly to meet the priorities the Scottish Government sets for it (e.g. expanding childcare hours, teacher numbers) and has access to raise money locally through fair taxation to meet their own local priorities

The report contains lots of useful information for UNISON campaigns against cuts and a self assessment tool for councillors to support them in their work. This is a useful tool for branches in analysing management plans and will be added to the UNISON anti-cuts toolkit.

Wednesday, 16 March 2016

UK Budget 2016

It is a typical Tory budget. There is plenty of middle class welfare at the expense of workers and the disabled, together with further cuts to public spending. I take a look at the elements that most impact on UNISON members in Scotland.

While the sugar tax (more accurately a levy) will make the headlines tomorrow, it is largely a distraction from some pretty bad economic figures. In particular, the growth figures for the economy are revised down and borrowing targets have been missed. The UK economy is £140bn smaller than the Chancellor planned due to spending cuts, low productivity and weak wage growth. George Osborne has clearly not heard of the maxim; ‘when in a hole, stop digging’ – because his solution is to drag the economy down further with more cuts and pushing households into greater debt. 

So let’s start with public spending. The bad news is £3.5bn of extra cuts from last November’s plans. The slightly less bad news is that they don’t kick in immediately – in fact they now drag past the date of the next UK General Election. This chart shows the changes.

This snip from the OBR risk table shows the revenue and capital cuts more clearly. In particular, note the line on public service pensions. This is not because they are actually costing more, but rather because he has changed the discount rate. This is the assumed investment return used in a present value calculation of assets. Sounds technical, but it comes with a big price tag for public services.

For Scotland, this means an immediate Barnett consequential of £650m in additional spending. However, yes you knew there would be a ‘but’, that still means £1bn (4.7%) of cuts by 2019-20.  We also still don’t know the Barnett impact of the £3.5bn additional UK cuts; because they haven’t said which English departmental spending they will come from. There could be additional pain for local government if the SLGPS has to change its discount rate in line with the Chancellor’s lead.

The OBR also publishes its estimate of the revenue from Scottish taxes in this chart. 

Scotland’s share of UK income tax is falling, but slightly less than previously forecast.

This chart shows the proportion of total taxpayer income by income bands. This reinforces the points made in the recent IPPR Scotland paper regarding taxation choices. In essence all good things have to be paid for, and by middle income taxpayers as well as the rich.

The next Scottish Government will be left with some other tricky decisions as a consequence of the changes in personal allowances. Increases in personal allowances at the bottom are dressed up as benefiting the lower paid, when in reality they also benefit everyone across the tax bands – they are not a progressive tax cut. The increase in the higher tax threshold is a blatant tax cut for wealthier households, paid for by cutting benefits for the disabled by £1.4bn. Let’s hope the next Scottish Government doesn’t stand ‘shoulder to shoulder’ with the Tories on this one.

Another tax decision for the next Scottish Government is Air Passenger Duty. The SNP want to cut it by 50%.  The OBR forecast receipts rising from £3.1 billion in 2015-16 to £3.9 billion in 2020-21. Making the cut even more of a burden on the Scottish budget, not to mention the 60,000 extra tons of carbon emissions. Anyone really care about climate change?

The cut to Capital Gains Tax is more middle class welfare and taken with the cut in Corporation Tax will encourage income tax avoidance by shifting earnings from income to profits. The new ISA limit at £20,000 is higher than the average wage of a Scottish council worker, which gives a pretty clear indication of who benefits the most from this tax handout. 

The sugar tax may be a distraction tactic, but it is still a sensible public health policy – even if it is branded as the Irn Bru tax in Scotland. It probably could have been introduced a year earlier than planned and cover a wider range of sugar products. It might bring as much as £52m in Barnett consequentials according to some calculations today. Obviously less if it has the desired effect in changing manufacturers behaviour. 

Buried away in the OBR report are a few other interesting points for UNISON members.

Average earnings growth in the second half of 2015 has been lower than expected in November and the OBR has revised down average earnings growth. They also expect real household disposable income growth to have peaked at 2.9% in 2015 and fall to average 1.7% a year from 2016 onwards. Inflation is expected to increase as this RPI chart shows.

The hollow rhetoric of a ‘workers budget’ is exposed in this chart, which shows that it is those paying National Insurance and tax through PAYE who face an increasing share of tax. They can’t take advantage of the tax avoidance mechanisms.

The Chancellor is yet again relying on household debt for economic growth. I usually describe this as the scariest chart in the OBR report. Well it just got scarier!

No more talk of rebalancing the economy. Just as well as exports are forecast to decline.

The Chancellor’s decision in 2013 to increase National Insurance contributions will give him a £5.6 billion windfall, with around 50% of the extra burden falling on public sector employers in higher employer NICs. His so called ‘pensions choice’ exercise has also netted him an extra £0.9 billion for the whole of 2015-16, around £0.2 billion higher than assumed. The, sort of, good news on pensions is that there are no changes to tax treatment, although some sensible reforms are necessary. Salary sacrifice schemes that many workers rely on to pay their contributions will also remain. 

In summary, all that you would expect from a Tory budget. As UNISON General Secretary Dave Prentis said: “Six years of severe cuts to public spending have done little to pay down the deficit, despite the Chancellor’s promises. Yet still he insists on continuing with his failing economic experiment."

Jeremy Corbyn also sums it up well!

For those who also want to read the all important small print - here is the Red Book, mostly government spin. And the more useful OBR report, plus the devolution tax paper.

Wednesday, 9 March 2016

Low pay and decent work

In recent weeks there have been a number of helpful reports highlighting the economic and social impact of pay and conditions in Scotland.

Today, the University of West of Scotland-Oxfam Partnership has published its initial findings of a study into low paid work in Scotland; ‘What Makes for Decent Work’. This was based on a Scotland-wide consultation of more than 1500 people, using focus groups, individual interviews and participatory street stalls, as well as an opinion poll. UNISON Scotland helped with the focus groups and thanks to the members who participated.  The top ten priorities, from the focus groups, are: 

Overall, there was strong agreement amongst focus group participants that ‘basic needs’ involve a wage or salary that covers the basics in life, but is also sufficient to participate in society and to ‘save for a rainy day’. Interestingly, the latter factor is explicitly covered in the London Living Wage calculation, something we were discussing at a Living wage Commission round table in Scotland last week.

This project’s unique approach shows that people in Scotland prioritise factors that are not unreasonable and extravagant. They represent what many would see as quite limited expectations and should be common practice in twenty-first century Scotland. 

The Resolution Foundation adopted a more traditional economic analysis of the Scottish labour market in its presentation, ‘State of working Scotland: living standards, jobs and pay”.

This study found that though pay fell for Scottish workers, the size of the hit was significantly smaller for employees across most of the pay distribution than for the UK as a whole.  This better performance on pay post-crisis was partially due to a larger hit to employment. 

As a consequence they argue that if Scotland is to hold onto its new-found lead on pay over England and help incomes grow for families in the bottom half, regaining its tight labour market will be crucial. But on many counts, it appears that the Scottish jobs market still has a long way to go before being considered fully recovered.

Overall jobs growth in Scotland owes much to self-employment (although still well below UK average) and part-time work. Pay growth was not uniformly better in Scotland and as the chart below shows, many on the lower rungs of the earnings ladder did worse.

The new National ‘Living’ Wage will improve pay at the lower end of the pay scale in Scotland, although slightly less than in England. However, plans to raise the personal tax allowance to £12,500 by 2020 will do little for Scotland’s 500,000 lowest earners who are already outside the tax system and overall the tax change benefits higher earners. For those outside the tax system the introduction of Universal Credit is significant and could encourage low-hours working among some groups. Universal Credit cuts in 2020 will be a major hit on working families in Scotland.

Scottish households benefit from greater reliance on social renting and lower house prices, although the growing private rented to have an impact in the coming years. This means when interest rates finally increase, Scottish households are likely to be better placed to cope with the consequences.

Scotland also has a higher percentage of workers who are persistently stuck in low pay. We also have more polarised work, with a higher proportion of both working and workless households.

Another issue is precarious work. Figures released by the Office for National Statistics today, shows the number of workers who say they are on a zero-hours contract has increased by 104,000 to 801,000, 2.5% of the workforce. Scotland remains the lowest part of the UK for zero-hours working, with 59,000 or 2.2% of the workforce.

However, we should remember that these figures understate the level of precarious work because many workers on nominal hours contracts are not included in these figures. It also impacts on wages. Research published by the TUC shows that average weekly earnings for zero-hours workers are just £188, compared to £479 for permanent workers.

In summary, while in some respects Scotland is doing slightly better on pay than the rest of the UK – the challenges and priorities that face the low paid, in a period of declining real pay, remain the same.

UNISON welcomes Higher Education Governance Bill

UNISON Scotland has welcomed the passing of the Higher Education Governance (Scotland) Bill in the Scottish Parliament.

UNISON represent professional and support staff in universities across Scotland and believes the move will improve participation in decision-making, and ultimately improve the lives of students.

The vote by MSPs (Yes 92, No 17) reforms the way universities are governed in Scotland ensuring that they will become more democratic by allowing all staff and students to vote for the chair of their governing body.  In those universities where there is currently a rector then their role remains unchanged. The bill also ensures that Scottish institutions governing bodies include representatives from trade unions and student associations.

Emma Phillips, UNISON Scotland head of higher education said, The move will help make sure “that Scottish higher education institutions are more inclusive, and will enable our members voices to be heard on campus."

“UNISON members are key frontline staff and integral to providing the excellent student experience that Scottish institutions all aim to deliver.

“The fact that they will now play a part in running our universities will improve services for students.

“The reform means professional and support staff will be in a stronger position to improve student services.

“We believe that the Higher Education Governance Bill will empower staff and students and encouraging a partnership between staff, students and management of higher education institutions.”


Monday, 7 March 2016

Good food for everyone

We have plenty of land in Scotland, and plenty of sea, and plenty of skilled people, scientists and innovators. There’s no reason why we shouldn’t have plenty of good food for everyone.

That is the key message from the launch of the Scottish Food Coalition’s report: ‘Plenty: Food, Farming and Health in a New Scotland’ at UNISON House today. The coalition brings together a wide range of organisations that have an interest in developing a more progressive food policy in Scotland.

UNISON Scotland represents a wide range of workers in the food industry. From those who inspect food production at source and regulate the safety of food operations – to those who cook and serve food, particularly in our schools and hospitals. We also have a wider concern to ensure that food policy contributes to a more equal society that protects our environment. Our Food for Good Charter represents the approach we would like to see food policy take in future.

Our members working with food face significant pressures. From light touch regulation of meat inspection at Food Standards Scotland, to cuts in environmental health departments, food safety is being compromised. Catering staff are also trying to produce nutritious meals on ever smaller budgets. In our last member survey, most workers described the negative impact of spending cuts on the quality and quantity of the food they provided.

Our current food system is characterised by inequalities and exploitation. People face the double burden of poverty and ill health, whilst our natural resources, animals, and workforce are exploited. Today’s report covers four broad areas:

  1. The food system should value people. By taking action to prevent food poverty through the benefit system, to ensuring all employers pay at least the Scottish Living Wage. Equally important is creating democratic structures to facilitate public engagement that challenges the power of corporations.
  2. We need sustainable food production that ends the negative environment impacts on the food system and our climate. Championing CAP reform and properly enforcing food and environmental legislation by taking a whole system approach to the impact of food on climate change.
  3. The Scottish diet wins few accolades and we can do much more to improve our food culture. Food purchased with public money should be nutritionally balanced and sustainably sourced - joining up school catering with the curriculum and the community. In the private sector, caterers should be required to report on nutritional composition and pay a levy on the difference between their sales and national nutritional targets.
  4. We need to cut the length of food supply chains, creating a better connection to our food. We should strengthen planning to support diversity in town centres, including farmers markets and safeguard land for growing food. Encouraging community land ownership and community-connected agriculture, including allotments.

To drive these changes forward, the report proposes primary legislation that enshrines the Right to Food in legislation. It should include the creation of a statutory Food Commission that provides oversight and scrutiny of our food system – reporting directly to parliament.

For too long food policy has been addressed in silos, with the big commercial producers having the dominant say. This report is a first attempt at building a broader consensus that joins up the strands of policy into a coherent whole.


Wednesday, 2 March 2016

Welcome end to the council tax freeze, but this isn't a proper reform of local taxation

The First Minister has made the welcome announcement that the Council Tax freeze will end next year and has published the outline of some reforms to local taxation. The much needed detail is due in further consultation papers that will be published after the election.

The headline is some stretching of the higher bands. Bands A-D are unchanged and the others will increase as follows: band E - £105; band F - £207; band G - £335; band H - £517.

This does make the Council Tax more progressive, but it is hardly 'radical'. Stretching the bands was proposed in 2007 and rejected at that time by the SNP. Eight years later, at a cost of £3.15bn to local services, we have come full circle. Importantly, there is no indication that there will be a revaluation of properties, which means properties are allocated to bands based on 1991 property prices. Like a proper reform of the Council Tax, this was presumably put in the 'too difficult' file. Labour made the same mistake in response to the Burt Report in 2007.

There are some welcome changes to council tax benefit to provide additional support to families by increasing the child allowance within the council tax reduction scheme by 25%. Extending the council tax reduction scheme to exempt 54,000 households on low net incomes, but who live in higher property bands, appears sensible as well. No doubt those who understand the interaction with the benefits system will have views on these changes. Ending second home discounts and the development tax is also good news.

It is very welcome that the regressive council tax freeze will come to an end in 2017. However, councils are to be told that any increase must not exceed 3%. We also have a nice infographic telling us that that the new system means £100m for schools. Does this mean further ring fencing or ministerial direction? This goes to the root of the problematic relationship between local and central government in Scotland. It is for democratically elected local councils to decide what the council tax should be and what it should be spent on. Not big brother government in Edinburgh.

There is an outline proposal that councils could have a share of income tax revenues assigned to them. I suspect this is the First Minister's way of gently letting her supporters down over dumping the unworkable and unfair local income tax plan. However, I am frankly struggling to see how assigning revenues makes local taxation more progressive as the government claims.

The problem with assigned revenues is that they are largely cosmetic. UNISON opposed the Smith Commission plan to assign 10% of VAT revenues to the Scottish Government for the same reason.

It is not clear to me from today's announcement, how these assigned revenues will be adjusted to reflect economic growth. In any case, as the Scottish Government rightly argued in the fiscal framework negotiations in relation to their powers, councils have even fewer levers to influence economic growth. In addition, is the Scottish Government proposing to use income tax generated by payroll where taxpayers work, or where income tax payers reside. An important issue in a city like Glasgow with leafy suburbs. And we have to ask how an equalisation scheme would work. This chart highlights the problem.


The short answer appears to be that they haven't worked all this out, but needed to say something before the election. After eight years of inaction, we might have expected a bit more.

Of course all of this doesn't happen until 2017. The additional revenues won't save a local service or a job in the coming year. John Swinney made great play of council reserves over the weekend. His claims are exaggerated because the way council reserves are accounted for doesn't mean the cash is sitting in the bank ready to be spent. However, if I can pinch his own hyperbole, its not 'utterly exaggerated' - it is something we have highlighted before. Mind you, council leaders are entitled to a wry smile given John Swinney's own under spends with the Scottish Government's budget!

The promise of additional revenues next year may well encourage some councils to use reserves to plug more of the gaps in their budget. Others may have an eye to George Osborne's recent statements about public expenditure, as he digs a bigger hole for the UK economy. The problem remains that the Scottish Government has consistently shunted austerity onto councils. I have covered this before, but here is another chart that starkly makes the point.


The best we can say about today's announcement is that we are to be spared another pre-election council tax freeze bidding war, as in 2011. For that we should be grateful. However, after eight years of stop gap measures, we might have hoped for a proper reform of local taxation. Sadly, this isn't it.