“Foundations of Scottish society are being eroded” by local taxation failures

Charities, trade unions, academics, and campaign organisations have united to call on Scotland’s political leaders to “urgently” reevaluate property across the country as a critical step towards reforming Scotland’s broken system of local property taxation.

Led by the Scottish Trades Union Congress (STUC), the letter – signed by Oxfam Scotland, Poverty Alliance, IPPR, WeAll, Scottish Women's Budget Group and others – says the “foundations of Scottish society are being eroded” by local taxation failures.

The level of council tax paid by people in Scotland is meant to be linked to the valuation of their property. Yet, the last time a property valuation was carried out was in 1991. 

Jamie Livingstone, head of Oxfam Scotland, said: “Delivering the fairer, greener, more equal Scotland we all want to live in requires significant and sustained investment, underpinned by a fair, long-term strategy on tax which includes targeting under taxed wealth.  

“Given that such a significant proportion of Scotland’s wealth is locked up in property, it makes sense to look at Council Tax – which is deeply unfair, outdated and ripe for reform.  

“It’s utterly absurd that the valuations underpinning people’s Council Tax bills were decided when the First Minister was just six years old. It’s clear that a property revaluation is a non-negotiable stepping-stone towards any meaningful reform of the Council Tax, which party leaders must unite to deliver by the end of this Parliament.”

The letter will be seen as a direct challenge to Scotland’s political parties. 

The Scottish Government is freezing council tax, despite research showing this costly measure will do little to address poverty.

It is estimated that 57% of all properties in Scotland would have changed band if a revaluation had taken place in 2014. Half of these properties are believed to be in too high a band, and the other half too low. 

The signatories to the letter say that while they may have different views about how council tax should be replaced or reformed, they all agree that “a revaluation is a necessary first step for meaningful local tax reform”.

STUC general secretary Roz Foyer said: “The lack of investment for our public services has become a national scandal. With councils tied to a regressive council tax system – based upon rates last updated when John Major was Prime Minister and there was still a Soviet Union – it’s little wonder our public services are fundamentally broken.

“A wholesale rates revaluation must happen urgently. This is a red-line issue for our movement. We cannot ever hope to build a progressive, more equal Scotland with world-class public services at its heart if there is not the sustained public investment to match.

“STUC figures show that, using a proportional property tax of 0.7%, we raise £783 million more for local authorities whilst also giving the most hard-pressed folks a rebate. But this reform, or any other, can only proceed following a revaluation of property across the country.

“Scotland’s failing local tax system may be an indictment on Scotland’s political class, but the solution doesn’t need to be party political. We need buy-in from across the political spectrum. Everyone across the Scottish Parliament can seize the initiative and work together. In doing so and reevaluating rates across the country, we can work collectively to reduce poverty, inequality and give working people the public services they deserve.”

The letter from the organisations comes ahead of the Stage 1 debate on the Scottish Budget this week in Holyrood.

Aileen MacLeod, interim director of WEAll Scotland, added: “We all know our Council Tax system is broken. The house values underlying the tax have not been updated since 1991. As a result many people are having to pay way above their fair share, compounding our existing housing crisis.

“We urgently need a revaluation of house prices for Council Tax. But it can only be the first step in a wider reform of our property and land taxation system to ensure that everyone has access to an affordable home. This is essential for building a Wellbeing Economy in Scotland that delivers good lives for all on a healthy planet.”