The UK government has decided against providing financial assistance to the
SNP administration’s plans to
replace the council tax with a local income tax.
The SNP had hoped to retain the current £400m a year which the Scottish
Government receives in council tax rebate from Westminster. However,
Purnell, UK work and pensions secretary, said there was no justification for
Westminster to fund the radical reform, The Scotsman reported.
It has been claimed a 3p local income tax rate would leave councils almost
£1bn short of the funds they currently take from council tax. The SNP had been
hoping the £400m Westminster rebate would help fill the gap.
A spokesman for the Scottish Government’s finance secretary, John Swinney,
said he hoped once Purnell read the consultation document on local income tax,
he would understand the issues.
Legislation on the NICs changes to be brought forward in the autumn following publication of 'the full effects of the changes to Class 2 and Class 4' in the summer
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