Consultation on the future of Council Tax, SASW's response

Our response to the Scottish Government and COSLA consultation on the future of Council Tax in Scotland

SUMMARY OF SASW POSITION 

SASW supports comprehensive council tax reform underpinned by principles of: 

  • Progressive taxation based on ability to pay.
  • Protection for low-income and vulnerable households.
  • Adequate transitional support to prevent financial hardship caused by any changes.
  • Regular revaluation cycles to maintain system equity, if the current system is maintained.
  • Consistency in taxation levels. 

Council tax reform presents an opportunity to address longstanding inequalities in how revenue is raised and a chance to ensure proper funding for essential local services. 

DETAILED RESPONSE TO CONSULTATION QUESTIONS 

QUESTION 1: Do you think the current council tax system in Scotland needs to be reformed? 

  • ☑ Yes
  • ☐ No
  • ☐ Don't know 

SASW Response: Yes, strongly. 

The Scottish Association of Social Work represents social workers across Scotland who witness daily the consequences of inadequate local government funding. Our members work in communities experiencing poverty, inequality, and social exclusion, and see first-hand how local government funding constraints directly impact the people and families they support. From this perspective, we believe the current council tax system is not fit for purpose and requires comprehensive reform. 

The Current System Does Not Reflect Ability to Pay 

Council tax property valuations are outdated and do not currently reflect their true value.  More importantly, property value is at best an imperfect proxy for household income and risks outcomes where asset-rich but income-poor households face disproportionate and unmanageable burdens. 

Our members work with families in expensive housing areas who may be struggling financially, and with households in lower-value properties who face council tax bills that represent a significant proportion of limited incomes. The regressive nature of the current system - where higher-band properties pay proportionately less than lower bands relative to property value - compounds these inequities and a creates a system which benefits very few.  

Council Tax as a Funding Mechanism Is Inadequate 

Council tax now comprises only around 18% of council revenue, making it a marginal funding source for the breadth of statutory services local authorities must provide. Councils' statutory obligations have expanded, particularly in social care and child protection - areas where SASW members practice daily. But council tax has not kept pace. 

Council tax has morphed into a mechanism for plugging gaps in Scottish Government funding rather than supporting responsive local government. Council tax increases are used primarily to offset shortfalls in funding from the Scottish Government block grant, not to enhance services or respond to local priorities. This undermines the original purpose of local taxation, to enable communities to raise additional revenue for locally determined priorities and services beyond baseline provision. 

For social workers, this means working in councils where rising demand for statutory services - child protection, adult safeguarding, crisis intervention - consumes ever-larger shares of diminishing budgets, crowding out preventative and community-based work that could reduce future demand. 

The Crisis in Scottish Public Services 

Scottish public services have been in crisis in the face of austerity for years1,  are in crisis today and will, according to most credible analyses, continue to be in crisis for the foreseeable future without fundamental change. This situation is unsustainable. It is clear to our members working in frontline services that many are past breaking point. This is not hyperbole: it is the lived reality of social workers, and many other public servants, managing impossible caseloads, making impossible decisions about resource allocation, and watching people fall through gaps that should not exist in a civilised society. 

After over a decade of austerity, there is nothing left to cut without compromising statutory obligations or accepting unacceptable risks to vulnerable people. Social work teams have been reduced to skeletal staffing levels. Early intervention and preventative services have been decimated. Community resources that once provided crucial support networks have disappeared. Eligibility thresholds for services, which are supposed to be universal, have risen so high that people must be in acute crisis before receiving help. 

The Scottish Government may have been increasing total funding year-on-year recently, but when this fails to match inflation, population changes, demographic change, increasing complexity of need, and rising costs, particularly in social care, the result is real-terms cuts. Services will continue to deteriorate as the gap between demand and capacity grows. 

The democratic deficit and erosion of trust 

The current use of council tax creates a dangerous democratic deficit. Council residents and voters do not see improvements in service availability or quality for the additional pounds they pay in council tax. Instead, they experience tax rises whilst services deteriorate. Bins are collected less frequently, libraries close, social work teams have fewer workers carrying larger caseloads, youth services disappear, and grass verges remain uncut. 

This is a predictable outcome when council tax increases merely offset block grant reductions. However, voters see taxes rising and services declining and reasonably conclude either that councils are inefficient or that taxation is futile. Neither conclusion is accurate, but both are politically toxic to social democratic society. 

Our members are deeply concerned that these dynamics drive mistrust in democratic institutions and creates fertile ground for populist politics that undermines social cohesion in Scotland. When people lose faith that taxation delivers services, support for the collective provision that underpins a decent society erodes. This is particularly dangerous in an era of rising inequality and social division. 

Moreover, the political distraction of debating council tax levels versus fully funding councils for the services they are required by law to provide obscures the key questions Scotland must answer about what services we want to provide as a society and how we will collectively fund them. 

A call for bold conversation and brave decision-making 

We are not experts in public finance. However, it seems evident to us that reviewing local and national taxation in isolation is insufficient. Scotland needs a wider conversation about what services are provided by the state, what they will cost to provide properly, and how spending priorities should be determined. 

Scotland needs to rethink how it spends its money, as well as how it raises it. This conversation must be honest about trade-offs, clear about costs, and transparent about who bears the burden. 

From that conversation, Scotland should create an honest and simple taxation system where: 

• Decisions are easy for citizens to understand 

• The relationship between taxation and service provision is clear and demonstrable 

• The heaviest burden consistently lands on those with the broadest shoulders 

Rethinking services and spending 

From a social work perspective, we know that investment in early intervention, community development, and preventative services reduces the need for expensive crisis interventions. If more resources were spent investing in communities, in youth services, community centres, family support, mental health services, addiction recovery, supported housing, fewer resources would be needed to support people in crisis. 

The current model is economically inefficient as well as socially damaging. We spend relatively little on prevention and enormous sums managing the inevitable consequences. Social workers spend their time responding to crises that earlier intervention could have prevented. This is not a good use of professional expertise, public money, or human potential. 

reform advocates in Scotland rightly emphasise preventative, community-based approaches and the importance of early intervention. However, these ambitions will remain aspirational without adequate funding. Council tax reform must be part of a broader conversation about how Scotland funds the preventative infrastructure that makes such approaches possible. 

The Limitations of incremental reform 

Updating council tax valuations and bands would do something to make the system less inequitable. A revaluation based on current property values would at least restore the original relationship between property value and tax liability, even if property value remains an imperfect measure of ability to pay. 

However, such reforms only address part of the problem and only work if council tax revenue increases don’t result in corresponding block grant cuts. If revaluation simply redistributes the same inadequate total revenue - or worse, if it enables Scottish Government to reduce grants in the expectation councils can raise more locally - we will have achieved almost nothing and ensured that public trust in services and democratic institutions continues to flounder. Any reform of council tax must guarantee that: 

• Increased council tax revenue genuinely supplements, rather than substitutes for, adequate central government funding 

• Councils are fully funded for their statutory obligations through block grants 

• Local taxation enables genuinely local decisions about additional services or higher standards, not just survival 

• The system is demonstrably progressive, with those who have the most contributing the most 

Conclusion: Towards a sustainable social settlement 

Council tax reform is necessary but insufficient. Scotland needs a comprehensive review of how we fund local government and public services, undertaken honestly and transparently with public engagement. 

This conversation must start from what services Scottish society believes should be available to all citizens as a right, what these services will cost to provide properly, and how we can raise that funding fairly. Only then can we design taxation systems, local and national, that are fit for purpose. Scotland has the tools of income and local taxation, it is time they were used to their full potential.  

Social workers are committed to social justice, human dignity, and the worth of every person. We believe in collective provision and mutual responsibility. Our members see what happens when public services are inadequate: individuals suffer, families struggle, communities' fragment, and inequalities deepen. 

Scotland can do better. We have the resources; what we need is the political courage to have honest conversations about how we use them, and the collective commitment to a fairer, more sustainable social settlement. 

Council tax reform, properly conceived as part of that broader project, could play a constructive role in a fairer Scotland. In its current form council tax, serving as it does to obscure fundamental questions about public finance, who pays for what and social provision, it does not.