Tax clash as Midlothian ‘loses’ £1m

�1 million of council tax money will leave Midlothian next year.
�1 million of council tax money will leave Midlothian next year.

Plans to remove £1 million of council tax money from Midlothian have sparked questions about accountability and the future of local democracy.

With the tax freeze now over, in 2016/17 the reform of Bands E-H is expected to generate an extra £1.7 million from the county. However, after that is taken from Midlothian, only £700,000 will be returned, ring-fenced for schools.

At last week’s full council meeting, Labour accused the Scottish Government of stealing £1m from Midlothian. The SNP made it clear that the county would be no worse off as a result of the “progressive reforms” which would mean “those with the biggest shoulders are taking the biggest share”.

Councillor Derek Milligan, Labour group leader, said: “If we are raising the money through council tax here it should stay here. It’s as simple as that.

“If the government has priorities it should deal with them with the powers and finances it has – and not come in and effectively leave the councils to do the dirty work.

“When the bills fall through the door, the 18 councillors here will simply get the blame.

“We have areas of deprivation in Midlothian that should be getting money pushed at them, but of the whole £1.7m, not a fraction will go to them because the Scottish government wants to keep it and shift it to other council areas. I have never known a national government to come in and take council tax.

“If we hadn’t had the council tax freeze for as many years we would not be in this mess.”

Councillor Kelly Parry (SNP) responded: “I don’t know if Councillor Milligan has actually read the policy. Midlothian will not be any worse off in the terms of this.

“There will be no change for 1.8 million Scottish households for council tax payers in bands A-D, they will pay no more than they do now. These reforms are progressive, they mean those with the biggest shoulders are taking the biggest share.

“I don’t know why you have a problem with that. Maybe you come from the branch of the Labour party that doesn’t agree with these things.”

Councillor Jim Muirhead (Lab), is angry that Holyrood is taking the money.

He said: “We get 80 per cent of our income from the block grant, the other 20 per cent we raise ourselves. That 20 per cent is meant to reflect our local priorities.

“Council tax is meant to be about local spending.

“The Scottish government is stealing £1 million from the council tax payers of Midlothian to fund their priorities.

“I have no problem with the priorities that they have got, I have a problem with where they are taking the money from.”

SNP councillor Andrew Coventry added: “Honestly, I find it difficult to believe that I’m hearing the Labour party defend an increase in council tax on the most expensive types of housing. Three quarters of the residents in Midlothian and throughout Scotland will face no increase whatsoever.”

The extra £109m of council tax raised nationally will be removed from the general grant provided to councils. Of that, £9m will be distributed to offset the additional council tax reduction costs, with the remaining £100m distributed based on free school meals. With Midlothian only set to receive £700,000, this means that £1m will go to schools in other council areas.