‘Depressing’ that Scotland is behind Wales on council tax reform, MSPs told

MSPs have heard that it is “depressing” that Scotland and England are unable to move ahead with council tax reform despite the Welsh Government’s plans to do so.

The Welsh bid to carry out a property revaluation in 2028 was praised as academics and experts spoke to Holyrood’s Local Government committee.

Critics of the council tax system point out it is still based on property values from 1991 and is becoming less and less of a genuine property tax as the years go by. Around half of properties in Scotland are thought to be in the wrong tax band.

But so far, there has been no agreement from politicians on how to replace council tax, with the Scottish Government pledging to try to build a consensus this year.

Professor David Heald of the Adam Smith Business School at Glasgow University told the committee the reforms in Wales could potentially become a model for Scotland.

He said: “Scotland and England are serious outliers in this point about not getting revaluation.

“I find it extremely depressing that it almost seems as if Scotland cannot move if England will not move.”

Prof Heald said that even if a consensus is reached for a revaluation it would likely take place around 40 years after the first council tax valuation in 1991, a timescale he said would bring the parliamentary process “into disrepute”.

Joanne Walker of the Chartered Institute of Taxation said there is a misunderstanding about the contribution the tax makes to local authorities, saying it only accounts for 19% of councils’ income.

David Phillips, associate director at the Institute for Fiscal Studies (IFS), said politicians’ failure to tackle the issue amounted to a “tyranny of the status quo”.

He pointed out that revaluation does not always mean householders’ bills will go up, as it would depend on the average growth rate of property prices.

Research from the IFS has found that if properties were revalued for council tax on a revenue-neutral basis, around 60% would see little change in their net bill.

Earlier this month, the Scottish Government and Cosla announced they would hold a joint consultation on council tax reform.

A parliamentary debate will be held on the issue later this year.

Separately, finance secretary Shona Robison spoke to Holyrood’s Finance Committee on Tuesday.

Asked about what a consensus could be on council tax reform, Ms Robison said: “It doesn’t need to be 100% that we all agree on this and we all run off holding hands into the sunset on council tax reform.

“I am realistic enough to sense that that is unlikely, but there might be elements of reform we could agree on.

“And I think if we could build enough consensus around those elements of reform that we agree on then we can almost say post election there is a consensus and an enablement to get on with those areas we agree on.”

She added: “I think previous attempts at reform have fallen at hurdles because of a lack of consensus about what the overall replacement would be.

“Rather than doing that and trying to get everybody to agree to the optimum change, being realistic and trying to get agreement around pillars of change, that would make improvement.”