GMB Scotland Defending Your Interests
Join GMB today

GMB Scotland: Overhaul Council Tax or scrap it to protect lifeline services

Tuesday, January 9, 2024

Scotland’s local tax system must be overhauled or rebuilt to save threatened frontline services, according to GMB Scotland.

The union fears underfunded local authority services are at unprecedented risk and has urged ministers to reform Council Tax or scrap it.

The tax paid by owners of more expensive properties has failed to rise in line with soaring property prices in the last three decades and, in a submission to the Scottish Parliament’s Finance and Public Administration Committee, GMB Scotland says urgent intervention is required.

At a Scottish Parliament hearing today, the committee met experts including Keir Greenaway, GMB Scotland organiser in public services, to discuss the impact and implications of the Scottish Budget announced before Christmas.

In her financial forecast, deputy first minister Shona Robison confirmed a Council Tax freeze despite warning MSPs of public sector job losses and reduced services.

Scotland’s local authorities have warned the property tax freeze risks lifeline services are under threat and, in its submission, GMB Scotland echoes concern.

It said the Council Tax is increasingly regressive, year by year, with those in the least-expensive homes paying proportionately more and warned the system must either be reformed or replaced.

It said: “This has been long overdue, and a perpetual freeze to Council Tax will only exacerbate the inequalities baked into the current tax system and undermine public services.”

The union said Robison’s flagging of reform of public services is code for cuts and risked the future privatisation of everyday services relied on by Scots.

The Scottish Government raised the relative tax paid by homeowners in more expensive properties in 2017 and are consulting on further rises.

However, critics say the tax is based on valuations of properties in 1991 and the changes do not come close to reflecting the five-fold increase in prices since then. Meanwhile, researchers estimate around half of Scotland’s homes are in the wrong tax band.

Greenaway, GMB Scotland senior organiser in public services, fears the Scottish budget threatens lifeline services already weakened by years of neglect.

He was responding to the Scottish Government warning that financial pressures meant public services can no longer be delivered in “traditional ways."

He told the committee that change had been constant in the public sector in recent years, adding: "When we talk about reform, the conversation can be lazy because the public sector has not stood still over the last ten years but has constantly been changing.

"The problem is that delivery of change and services is being attempted on a shoestring and is now being done under the spectre of redundancies, privatisation and bankruptcy."

Responding to the budget last month, Greenaway said: “Our members have worked tirelessly to deliver services to our communities despite the damage done by years of underfunding.

“They deserve far better than to be warned of yet more uncertainty, jobs cut and services slashed.

“Our NHS and councils need more investment not less and this budget is not about money but choices and priorities.

“It is this government’s choice, for example, to freeze council tax which most benefits the better-off while undermining services relied on by the lowest paid and most vulnerable.

“We do not need more tax policies provoked by crisis in the short-term if they cannot deliver sustainable public service investment in the long-term.

“Our national and local tax structures must work together to secure genuinely progressive tax policies that can protect these crucial services for years to come.”


In full: GMB Scotland submission to the Finance and Public Administration Committee on the Scottish Budget 2024-25

The Scottish Government’s Budget for 2024/25 was lacking in ambition, realism, and more notably, a long-term plan for Scotland, our public services, and our industrial and energy sectors. This Budget will damage services, deepen inequality, and reduce the standard of living for our members and the communities they serve. 

Raising revenue and Council Tax: An unwillingness to utilise the tax powers available and, not only retaining the Council Tax, but freezing it, will place greater pressure on all public bodies to meet the service levels communities expect and the pay rises our members deserve. A new income tax band is welcome as this will collect more money from higher earners but goes nowhere near far enough to plug the gap in Scotland’s public finances. 

Council Tax must either be reformed to lift the tax burden on the lowest earners and place a greater emphasis on collecting taxes from the highest earners whilst increasing the revenue yield; or it must be scrapped and replaced with a new system which does the same. This has been long overdue, and a perpetual freeze to Council Tax will only exacerbate the inequalities baked into the current tax system and undermine public services.

Public service workforce and pay: The Scottish Government reaffirming its commitment to job losses in the public sector will mean public service workers will continue to be expected to do more for less. The Deputy First Minister stated that they she will “work in partnership with trade unions”, but has not made clear how she intends to do this or on which services the axe will fall. 

“Reforming” public services and to pursue “sustainability” ultimately means cuts to investment and the workforce. In the long term, this will open the door to privatisation of public services, especially in local government as councils are starved of the funds they need to properly staff services and deliver the pay awards our members deserve. 

GMB Scotland has repeatedly called for the Scottish Government write its Public Sector Pay Strategy in cooperation with trade unions. This came after almost every public sector workforce receiving pay increases above the maximum in the previous strategy, and the Scottish Government breaking its own rules relating to bonuses paid to public sector executives. A lack of realism in setting the Strategy means public sector bodies will have to find money elsewhere if and when trade unions enter into dispute. This realism can only be provided with the active involvement of trade unions. 

Postponing the Strategy until after the UK Spring Budget gives the Scottish Government the opportunity to hold those talks on minimums and maximums which they must take if industrial action in key public services is to be avoided. Unprecedented strike action was only narrowly avoided in 2022 after our members accepted a two-year deal. The issues in our NHS have only deepened since then with our members expecting a pay offer which matches their value. 

Health and social care: An increase of £550m in funding for NHS Scotland and Scottish Ambulance Service will not meet incresing demand in services. This sum amounts to roughly half of last year’s pay award and is most likely to be used to fund a pay award for healthcare staff rather than be used to increase capacity within the service. 

In any case, there can be no recovery in the NHS and SAS without a recovery in social care. Increased capacity in social care will ensure Scotland’s aging population can be cared for at home or in a social care setting and therefore freeing up resources in hospitals which will prevent ambulance queues at Scotland’s hospitals. This can only be achieved by tackling the recruitment and retention crisis in social care the root of which is low pay. 

Inflation has dramatically undermined the long-promised introduction of a  £12 per hour minimum wage in social care and the Scottish Government is running to stand still on pay. This figure was reached without serious negotiation with unions. Social care requires professional qualifications and scrutiny in return for low pay, particularly in the private and third sectors. In order to make social care an attractive career and for services to be properly staffed, pay must be raised as soon as possible to £15 an hour for social carers and a proportionate increase for all nursing and ancillary staff. 

Energy and industrial strategy: GMB Scotland welcomes the Scottish Government’s commitment to invest £500m over the next five years in anchoring new offshore wind supply chains in Scotland. However, this investment is long overdue with many of the contracts, jobs and revenues already being offshored across the world and with them the taxes required to fund public services. This money must be invested quickly but effectively, to build a real industrial base if new opportunities are to be created for those working in fossil fuels.

So far, this has not been the case. Oil and gas jobs have been subject to a death of a thousand cuts. However, the recent announcement that Grangemouth will cease oil refining operations in 2025 risking hundreds of jobs was a major blow to energy security and Scotland’s industrial base. This is the result of years without industrial strategy. Politicians have too often relied on the empty promise of a "Just Transition" without creating the infrastructure and jobs such a transition would be built on. The reality is that Scotland will need oil and gas to meet our energy needs but will not have the ability to produce it ourselves and instead rely on foreign imports.

The investment of £358m to accelerate installation of clean heating systems in homes is naïve. Many of these systems e.g. heat pumps, will only add installation costs onto households which are not in a position to afford them, and will increase the cost to heat homes due to higher price of electricity compared to gas. Instead, a greater emphasis must be placed on insulating homes to reduce energy use and emissions; building new nuclear for future generations; and utilising Scotland’s existing gas network through the use of hydrogen in home heating.


Keir Greenaway, GMB Scotland Organiser Speaking at the Scottish Governments Finance & Administration Committee, Tuesday 9 January 2024.

Keir Greenaway, GMB Scotland Senior Organiser speaking today at the Scottish Governments Finance & Public Administration Committee