The Scottish Government has attempted to revive their previously discredited plans for a local income tax, following an announcement from the First Minister yesterday (Tuesday 23rd) of their intention to begin funding local authorities via a share of local income tax revenues in conjunction with the council tax.
This would mean the overall Scottish Government grant to local authorities would decrease, and Dumfries & Galloway Council would instead have to rely on income tax revenues from the region to fund local services.
The plans have been criticised by Dumfries & Galloway Council Leader Ronnie Nicholson as “grossly unfair” towards the region, the lowest paid in Scotland, and would be “biased” towards the higher paid central belt.
Councillor Ronnie Nicholson said:
“These proposals could have a devastating impact on Dumfries & Galloway. We are the lowest paid region in Scotland and have the largest proportion of older people in Scotland whose income is below the level they pay tax. This would mean the income tax take in Dumfries and Galloway is lower than wealthy areas in other parts of Scotland so we could lose millions. Due to our proximity with the border we also have thousands of people who live in the region but pay income tax in England because that’s where they work. The Scottish Government don’t have the power to give us a share of that income. The council is working flat out to build the economy in Dumfries and Galloway but the biggest obstacle is the Scottish Government cuts. This is resulting in hundreds of job losses within the Council and NHS- the two biggest employers - which in turn takes money away from local businesses.”
“This proposal looks like an ill-thought out attempt by the Scottish Government to re-hash their failed plan for a so-called local income tax and as a way to respond to the widespread criticism they are getting over their massive cuts to local services. Next week, Councillors will be faced with a budget which includes £21.1million of Scottish Government cuts – the highest we have ever seen in our region. Cuts cannot become the norm in our region, but that’s exactly what could happen if these tax proposals are made a reality.”