Analysis: Have the Greens got enough bang for their buck with their #ScotBudget deal?

Ben Wray

CommonSpace editor Ben Wray looks at whether the Scottish Greens have won enough in their Budget agreement with the Scottish Government

THE Scottish Government is set to pass its 2019/20 Budget after securing the backing of the Scottish Greens, after days of wrangling.

The spotlight has been on whether the Greens have got serious enough concessions to their agenda to warrant passing the Budget, and on that the jury is very much out. 

Inevitably opposition parties think the Greens have sold themselves short. Putting aside some of the tabloids arguments put forward by Murdo Fraser, Willie Rennie and co when making this case (why are they all obsessed with Dr Who?), there is a clear argument to be made against the Greens compromise. 

First, while extra money has been secured for local government, the Greens claim that they have secured concessions from the government which in total “closes the £237 million funding gap” is highly questionable.

The Greens have come to a figure of £282 million of “new funding and flexibility”, but not all of that money is new, and neither is all of the flexibility new.

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£50 million comes from money which was previously ring fenced to Councils and now is not. £80 million is money Councils have the flexibility to raise by increasing their Council Tax by 3 per cent. That’s a power they already had, but Scottish Greens local government spokesperson Andy Wightman has said they’ve included it in their figure because it was not part of Cosla’s calculations when it came to the £237 million funding gap number. Hmm.

Only £90 million is actually new money from the Scottish Government, while the changes to Council Tax – which allows Councils to increase rates by a maximum of 4.79 per cent – adds another £47 million. The final £15 million comes from money the Scottish Government thought it needed for pension provision and has now realised it doesn’t. 

So the only revenue raising reforms which have been secured are to a Council Tax which the Greens want to get rid of because they know that it is not progressive. There was no changes wrung out of Finance Minister Derek Mackay on increasing the progressivity of income tax. 

Councils may well choose to use their maximum revenue raising capacity, but that will come at a cost, especially for low income earners who will see their Council Tax bills increased by as much as high earners. Many in in-work poverty are already paying far too much in Council Tax, which is levied on property users rather than property owners.

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And even at that it’s not clear this package really does close the funding gap. The Scottish Parliament Information Centre has put the figure for the fall in revenue to Local Government from Mackay’s draft budget at £319 million. Cosla has welcomed the changes made to that settlement today, but I doubt many Councils in Scotland will be getting the party poppers out when they look at what they’ve got to work with ahead of declaring their budgets at the end of February. 

Then there is the second part of the Greens budget negotiation – local tax reform. Patrick Harvie had been resolute for the whole year since last year’s Budget that they wouldn’t countenance backing this year’s unless a “serious commitment” to local tax reform was forthcoming. Did he get that?

Harvie says he did. In response to the Budget statement he said “for the first time a clear, definitive timescale for replacing Council Tax now exists” and described the devolution of powers to Councils to have the option of introducing a Tourist tax, non-domestic rates empty homes relief (which could see vacant land taxed) and hospital car parking charges was a “historic victory”.

He accepted this was “not perfection” but that “all parties now have an opportunity to help bring about a fairer system of funding essential local services.”

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It’s possible Harvie is overhyping here. Because the actual detail of what has been agreed on the Council Tax does not commit the Scottish Government to much, and does not require them to do anything very quickly.

The letter of agreement on the deal states: “Both the Scottish Government and the Greens supported the recommendation of the Commission on Local Tax Reform that the present council tax system must end. In order to make progress the Scottish government will convene cross-party talks on a replacement for council tax with a view to publishing legislation – should cross-party agreement on a replacement be reached – by the end of this parliament, with that legislation taken forward in the following parliament.”

There’s a number of problems with this. 

First of all, the Commission on Local Tax Reform, established by the Scottish Government, published its final report in January 2016. The SNP, after saying it accepted the recommendations, then promptly ignored them in its 2016 Scottish elections manifesto, when it proposed the tweaks to the Council Tax which are now in place. So the highlighting of this Commission only goes to show that their word when it comes to the Council Tax doesn’t count for an awful lot.

Second, the need to secure cross party agreement on local tax reform before legislation is put forward does not take us any further forward from where we were before this Deal was struck. The SNP has been saying since 2007, after it became the government on the manifesto promise to scrap the Council Tax, that it would bring forward legislation if cross-party support could be agreed. Cross-party support is never agreed because, other than the Greens, none of the parties want their fingerprints on a replacement to the Council Tax which would have losers as well as winners, and thus face the ire of middle class voters who may find that they are paying tax on their property significantly in advance of what they are paying currently.

READ MORE: Analysis: Scrapping Council Tax, not tweaking Income Tax, should be the progressive test of next week’s Scottish Budget

So when Harvie says he has secured a “clear, definitive timescale” for local tax reform, that is entirely conditional on the parties agreeing to reform proposals which it has not been able to agree on so far. The Commission for Local Tax Reform was designed for the very purpose of building consensus and trying to take the politics out of this issue. It was ignored. It’s unclear why this process won’t fall victim to the same politicking. 

The smaller taxes which have been devolved do give Councils a bit more power and some more options, but they don’t amount to a range of powers which will be a game-changer in many Councils in terms of their finances. Outside Edinburgh and the Highlands, the tourist tax will probably not be used. 

The Greens are of course perfectly aware that what they have secured is not everything they would want, but argue that it is better than nothing, and with the unionist parties unwilling to negotiate, they were left to be the adults in the room and secure a deal, preventing a crisis.

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Wightman has expressed his frustration about the lack of seriousness with which other parties have taken the budget process. But seriousness isn’t a virtue in and of itself. Seriousness has to be tied to solid purpose to be worthwhile. And some times the serious, purposeful thing to do is to stand your ground.

Harvie said that without the concessions which the Greens have secured to Mackay’s Budget “did offer the potential of a crisis in public services”, but should he be so confident that such a crisis for Local Government has really been avoided? 

The debate about whether the Greens sell themselves short in their approach to Budget negotiations with the SNP can never really be concluded one way or another as it is entirely political, but if anything this Deal will only intensify that debate rather than draw it to any sort of conclusion.