A MAJOR faultline opened up between the Scottish Government and Scotland's councils yesterday after John Swinney declared his determination to bring in a council tax freeze for a second year – without any new money to enable it to go ahead.
The finance secretary told the SNP conference in Perth that the government could be relied on to introduce a second year's freeze. He made it clear afterwards there would be no new money, over and above the £70 million already on the table.
This
provoked a blunt response from Steven Purcell, the Labour leader of Glasgow City Council, who warned it would be "nigh on impossible" to deliver a council tax freeze next year without extra government cash.
The row over council tax levels threatens to break apart, not just the financial settlement for local government, but the whole "historic concordat" between central and local government.
A spokesman for Mr Purcell confirmed this yesterday. He said: "Only councils can freeze council tax, and it would be very difficult for us to do that with last year's settlement because of the new financial circumstances we live in." Last week Mr Purcell won agreement from other council leaders to "renegotiate" the financial settlement for local government.
Mr Purcell claims that rising fuel bills, an outstanding pay demand from government and other economic factors – including the credit crunch and the local authority money trapped in Icelandic banks – meant that councils were under far greater pressures now than they were last year.
It is understood that councils want the Scottish Government to make available another £70 million for next year, or the whole financial settlement will be in jeopardy, including the council tax freeze.
This was clearly at odds with Mr Swinney's message to conference and afterwards. Mr Swinney confirmed that there would be no new money available, that the £70 million a year which the Scottish Government found last year would remain and there would be no more on top.
He said: "We have put the provision in place to freeze council tax, they obviously have to agree, each council will make its own decision, but the resources will be there. I'm confident that local authorities will continue to freeze council tax." Mr Swinney also used his speech to build on the theme, expressed by Alex Salmond on the first day of the conference, that Labour was responsible for the economic woes of the country.
The finance secretary was warmly applauded when he declared: "On the brink of recession, with rising unemployment, rising inflation, failed financial regulation, the banking system in crisis and future generations burdened by credit card interest rates on PFI projects ... Labour's financial credibility stands today in tatters."
Mr Swinney added: "On Gordon Brown's watch, a housing bubble was created which has now burst and personal and national debt has clearly reached an unsupportable level."
Mr Swinney derided what he described as the "Union dividend". He said: "The financial turmoil of the last year – culminating in the financial crisis of the last few weeks – demonstrates there has been no British economic miracle.
"It was just another chapter of the Union dividend of the last 30 years that has kept economic growth in Scotland trailing economic growth in the rest of the UK. Just more of same Union dividend." The finance secretary drew the biggest cheer when he quoted John MacCormick, one of the founders of the Nationalist movement, who predicted that, when there was a Scottish Parliament – "the last lap is now to come".
"We are now in the last lap, and we must win it for Scotland," Mr Swinney declared.
The full article contains 611 words and appears in The Scotsman newspaper.
