Can we achieve equality, provide opportunity, and create community by freezing Council Tax?
Our Coordinator, Carmen Martinez, reflects on the gendered implications of the First Minister's recent announcement about freezing Council Tax.
On Tuesday, the First Minister (FM) Humza Yousaf announced that council tax rates are to stay at current levels during the next financial year 2024/2025. As a feminist organisation focused on promoting women’s equality using gender budget analysis, we are concerned about the FM’s decision. Firstly, because there is plenty evidence pointing to the regressive nature of Council Tax overall, which is at odds with the Scottish Government’s commitments to progressive taxation. Secondly, freezing Council Tax will deprive Local Authorities of much needed revenue at a time when most are struggling to run public services, due to increasing costs and real term cuts to local government funding.
But… how does this affect women?
We know that taxation can play an important role in tackling inequalities. Regressive taxes place greater pressure on those on lower incomes… and, yes, women make up a higher proportion of those on lower incomes (SWBG, 2022; Close the Gap, 2023). According to data from the Office of National Statistics, households in the bottom quintile pay 4.6% of their income on Council Tax, whereas those in the top quintile pay just 1.4% of their income on this tax (ONS, 2020). If we are to achieve greater (gender) equality outcomes, we should be seeing stronger commitments to reform Council Tax into a progressive form of local taxation instead of freezing Council Tax rates. What’s more, Council Tax reform could deliver more revenue to fund local public services of which women depend most. This leads nicely on to my next point, which is about the implications that shrinking local budgets have for women’s equality.
Local authorities play a key role as service providers which benefit women hugely, such as Early Learning and Childcare provision, social care services and others. Funding these services is therefore crucial from a gender equality perspective. Yet, analysis by Audit Scotland has highlighted that revenue funding for local government has not kept pace with other parts of Scottish Government revenue spending. COSLA analysis of last year's budget indicates that there has been a £71 million cash increase once all national level government commitments are covered (COSLA, 2022). With high inflation rates, increased costs of energy and fuel, increasing demand on some services and higher than anticipated pay rises in 2022/23, this level of cash increase means most local authorities are still struggling to cover costs and have sought to make savings within the 2023/24 budget (Audit Scotland, 2023). Past experiences of ‘public savings’ have taught us that it is usually women picking up the slack. For example, research by the Urban Big Data Centre with North Lanarkshire revealed that austerity cuts to environmental services were felt most by women living in the most deprived neighbourhoods. Due to a decrease in provision, women ended up making most street cleansing requests, contributing to their invisible ‘third shift’, instead of the council scheduling routinely services as had previously been the case. (UBDC, 2022). By freezing council tax next year, it is unclear how Local Authorities will be able to properly fund some key public services and social infrastructure (such as care and childcare) of which women rely on most unless this commitment is fully funded by the Scottish Government. It is even more unclear how the Scottish Government can justify this measure from a gender equality perspective.
It is also worth noting the importance of local governments as a source of women's paid employment. According to figures from the Women’s Budget Group (2020), 78% of council employees are women. As already discussed, freezing Council Tax rates will only create more problems for Local Authorities trying to balance their budgets. However, part of this balancing act includes reviewing and negotiating pay offers for council workers. By restricting Local Authorities’ ability to increase their revenue, it is hard to see how any new pay offers will reach a level deemed fair, particularly when considering the challenges brought up by the cost-of-living crisis.
Ensuring implementation of policy objectives.
In light of the above evidence, we would urge the FM to reconsider whether freezing council tax rates is the answer to the problems created by the cost-of-living crisis. It is time to build cross-party consensus around Council Tax. If the Scottish Government is to deliver on the equality, opportunity and community missions, we need to see a fair approach to local budgets with financial settlements that allow for the continuation of key public services for women while guaranteeing fair pay for local government workers. We hope to see these calls reflected on the upcoming Scottish Budget 2024/2025.
Audit Scotland (2023) ‘Local government in Scotland. Overview 2023’. Last accessed 18/10/2023: Local government in Scotland: Overview 2023 (audit-scotland.gov.uk)
Close the Gap (2023) ‘Scotland’s gender pay gap continues to fluctuate as women’s labour market inequalities remain unchallenged’. Last accessed 18/10/2023: Close the Gap | Blog | Scotland’s gender pay gap continues to fluctuate as women’s labour market inequalities remain unchallenged.
COSLA (2022) ‘Local Government Settlement 2023/2024. #BUDGETREALITY’. Last accessed: 18/10/2023 Budget-Reality-23-24-UPDATE.pdf (cosla.gov.uk)
Office for National Statistics (2020) ‘Taxes as a percentage of gross income, disposable income and expenditure for all individuals by quintile groups Scotland 2018-2019'. Last accessed: 18/10/2023 Taxes as a percentage of gross income, disposable income and expenditure for all individuals by quintile groups, Scotland: 2018 to 2019 - Office for National Statistics (ons.gov.uk)
Scottish Women's Budget Group (2022) ‘Women, Work and Wealth in Scotland's changing economy 2022’. Last accessed: 18/10/2023 Women-Work-Wealth-in-a-changing-economy-report.pdf (swbg.org.uk)
Urban Big Data Centre (2022) ‘Using council data to reveal the invisible ‘third shift’ done by women from poorer neighbourhoods’. Last accessed 18/10/2023: Using council data to reveal the invisible ‘third shift’ done by women from poorer neighbourhoods | Urban Big Data Centre (ubdc.ac.uk)
Women’s Budget Group (2020). ‘Local government and Gender’. Last accessed 18/10/2023: final-local-gov-2020.pdf (wbg.org.uk)
 For more information on Council Tax reform options, check out this joint briefing created alongside IPPR Scotland, Oxfam Scotland, Poverty Alliance, CPAG in Scotland, One Parent Families Scotland, and the Wellbeing Economy Alliance Scotland.
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