The NHS and the 5 -Year Council Tax Freeze

Marlyn Glen

3 February 2012

Who was it who said that the SNP Government "cannot continue to hide behind messages that they're protecting NHS funding"?

And who was it who added , "Chipping away at the workforce in this short-sighted manner has the potential to really harm patient care and overburden remaining staff."

It was Theresa Fyffe of RCN Scotland, a formidable defender of her members’ and patients’ rights and of the NHS, regardless of which party is in power in the Scottish Parliament.

Her comments come after the Salmond-Sturgeon assertions on the National Health Service -

"We will protect the NHS over the duration of this parliament" - Alex Salmond

and

"We will protect the NHS budget for the whole of the next parliament " -Nicola Sturgeon

These assertions exist in a different world from the inescapably grim reality of the state of the NHS that their own Government figures show.

On staffing, the number of nursing and midwifery staff is now lower than the level that the SNP Government inherited from Labour in 2007.

2,000 nursing and midwifery posts have been cut.

On expenditure, provisional figures indicate that in the next financial year, 2012-13, health expenditure is expected in Scotland to fall by £ 68 million in real terms,

In the following year, 2013-14 , it is forecast to drop by a further £88 million

In financial year 2014-15, Referendum time, it will decline further by £163 million.

By complete contrast, in an effort to establish its credentials as a low-tax party, the SNP Government’s over-riding concern above all else has been to freeze the council tax till 2016-17, at considerable cost to the public sector.

So while spending on health plummets by £319 million in real terms between now and 2015, the demands of freezing the council tax over the same period will cost £420 million.

The independent SPICe (Scottish Parliament Information Centre ) has produced figures which show the colossal sums involved in the council tax freeze.

The total cumulative cost of freezing the tax from its introduction in 2008-09 to the end of this session of the Parliament in 2016-17 is estimated to be £3.1 billion.

Compare £3.1 billion with this year’s total budget for all of Scotland’s health boards - £7.5 billion.

£3.1 billion is broadly equivalent to 40 per cent of all of Scotland’s health boards’ revenue budgets in the coming financial year.

The fine blog Taxing Scotland comes up with some pretty impressive information on who benefits from the council tax.  ( http://bit.ly/wAGfkF )

There’s a novel twist to the well-established view that the very well-off benefit the most from the freeze.

Taxing Scotland ask – how much does it cost to freeze the council of the richest 10 per cent in Scotland ?

Taxing Scotland estimate it costs £155 million to freeze the council tax of the wealthiest 10 per cent for 5 years .

They further estimate that the cost of freezing the council tax of the top 20 per cent of income earners in Scotland is £280 million over 5 years.

The £155 million that it costs to freeze the council tax over 5 years breaks down to around £30 million a year - the equivalent of paying the wages of an extra 1,000 nurses at £30,000 a year.

The 5-year council tax freeze is undoubtedly populist, representing in the words of its enthusiasts " hundreds of pounds of help to hard-pressed families" ( without adding that the "hundreds of pounds" is spread over several years ).

In everyday life, those on middle income benefit by around £2-£3 per week

The council tax freeze is paid for by councils being forced to increase their charges for their services to council tax payers and the shedding the jobs of thousands of council workers who provide essential services that the community depend upon.

Eventually all populist politics have a political cost .

A 5-year council tax freeze is simply not a viable option, and will loom over the period of the Referendum as an example of the consequence of low taxation for public services in Scotland.

No one is under any illusions about the scale and the severity of the problems that any Scottish Government whatever its political colour would face from the Coalition cuts now cascading out from the UK Government

However, the Scottish Government’s priority should not be freezing the council tax payments of the wealthy who can easily afford to pay a modest increase to protect public services.

Neither is this a time for the pursuit of the SNP Government ’s Holy Grail of lowering Corporation Tax for businesses to 12 per cent with all the serious concerns that this would pose for the funding of public services.

Just as populist politics has its eventual political cost, so Government by Assertion delivered by Soundbite meets its nemesis amongst the very own cuts that it makes.

Last month, RCN Scotland made the perfectly reasonable case for an increase in places for student nursing in 2012-13.

They argued that this was necessary to meet the increasing demand on the NHS in the near future and to replace the many nurses who will soon be of retirement age.

The SNP Government’s response was to cut the intake for student nursing and midwifery numbers to their lowest level for 15 years.

"Protecting the NHS over the duration of this parliament" ?


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