Modelling the council tax freeze in Scotland – a guide to the facts and figures

Sousa, João and Congreve, Emma (2023) Modelling the council tax freeze in Scotland – a guide to the facts and figures. Fraser of Allander Institute, Glasgow.

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Abstract

Since the council tax freeze was announced, there has been a lot of discussion about its merits (or otherwise). Along with others, at the FAI we have tried to put some numbers in the public domain to illustrate the evidence of impact of the freeze along with the postponement of the consulted change in multipliers. It is unclear what evidence factored into decision making before the freeze was announced. Given it was an announcement at Conference, civil servants should not have been involved directly. However, they will be involved now in the process of negotiation with COSLA over how councils will be compensated. In the run-up to the Scottish Budget, we can hope that civil servants are also providing robust advice to the FM and DFM to confirm this is indeed where they want to focus scarce Scottish Government resources. Evidence on the impact on changes in council tax rates or multipliers is drawn from modelled estimates. Models require assumptions and it is important to note that different estimates can result from (perfectly legitimate) changes in assumptions. Different figures may be produced by different organisations, based on their choice of assumptions. This may be disconcerting for those who want a straightforward answer, but it is unavoidable when it comes to council tax modelling for reasons we will explain. This note aims to offer additional background on recent estimates, shedding light on their production process, the reasons behind variations, and, crucially, the key insights that remain consistent, regardless of the method of calculation.

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