Page last updated at 23:56 GMT, Thursday, 19 June 2008 00:56 UK

Glasgow 'against' local tax plan

Council tax bill
Glasgow will formally reject plans for local taxation next week

Scotland's largest council is poised to formally reject proposals for a local income tax.

Glasgow City Council's response to the Scottish Government's consultation is set out in a report which is due to be considered next week.

Council leader Steven Purcell said the introduction of local taxation would be "a disaster for Scotland's economy".

The minority Scottish Government hopes to win support from rival parties to introduce the scheme in 2011/12.

The report on the local income tax consultation goes before Glasgow City Council on 26 June.

It states that officials have analysed data from over 6,000 people who have used the council's local tax calculator.

The report states that Glasgow would need to set a local income tax of 4.5p in the pound to meet current levels of revenue.

It states that under such a system, 47% of residents would be better off, 46% worse off and 7% would see no difference.

If the tax was set at 3p, Glasgow would be left with an annual funding shortfall of about 60m - assuming that council tax benefit was received from the Treasury in London.

If this was not given - as the Treasury has indicated - then the shortfall would rise to 133m.

The report also highlights the council's need to find 50m in efficiency savings over the next two financial years to meet the cost of inflation and police pensions.

It states that an additional 120m would need to be cut from budgets under local taxation.

Better off

Council leader, Steven Purcell, said the findings should persuade the government to scrap its plans.

"We've taken a long, hard look at this proposed new tax and I simply cannot see how it can be made to work without increasing taxation for a large number of people or drastically cutting council services," he said.

"We will either see cuts of tens, potentially hundreds of millions of pounds or nearly half of Glaswegians will pay substantially more tax. Both outcomes would be a disaster for Scotland's economy.

"No one thinks the council tax is perfect. However I would urge the Scottish Government to have another think about how best to fairly raise the resources to fund services which every person in every community relies on."

But Glasgow SNP MSP Bob Doris said the Labour council had shown that 72% of Glaswegians would be better off under the local income tax proposals.

He added:"Glasgow Labour have shot themselves in the foot. This report gives the game away. It is no wonder Labour voters back the local income tax."

Liberal Democrat Glasgow MSP Robert Brown said it was "astonishing" that Glasgow City Council would prefer to back council tax.

He continued: "This paper is missing the point about local income tax. It is ridiculous to suggest that LIT would generate a smaller income in Glasgow than the unfair and discredited council tax."

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