SCOTLAND’S biggest city faces a £30 million bombshell which puts services at risk because of Labour’s tax hikes, The National can reveal.
National Insurance contribution increases are set to push Glasgow City Council “to the edge”, according to the SNP group, which controls the local authority.
Chancellor Rachel Reeves announced in the autumn that employers’ contributions would be hiked to 15% as Labour sought to plug a £22 billion “black hole” in public finances.
At a meeting of Glasgow City Council on Thursday, deputy leader and treasurer Richard Bell will call on the UK Government to reverse the increases, which he will say “jeopardise the provision of essential services”.
The Glasgow Times reported before the Budget that the tax increase would cost Glasgow £26m but the council’s new official estimates put the figure £4m higher.
The SNP have said the extra tax bill adds to existing pressures on the council’s finances, including settling the equal pay dispute which began when Labour controlled the local authority.
Bell (above, left) told The National: “Public service providers continue to struggle under 15 years of austerity-driven cuts and rising demands. This is the context in which Labour has been repeatedly warned about the impact on the public and third sectors of any increase to employers’ National Insurance contributions, including by the leader of the Council.
“An additional annual pressure of £30m in a city like Glasgow – already contending with the burden of Labour’s equal pay bill – risks pushing those services and the citizens who depend on them to the edge.”
There are also concerns about the impact of the increase on “third-sector” organisations which are run as charities but provide services for local authorities, like the council’s arms-length organisation Glasgow Life, which provides leisure and library services.
Bell added: “Taking away with one had what it gives with the other – all the while leaving high-earners untouched – doesn’t support public services, those third sector groups playing an increasingly critical role in addressing poverty and exclusion or Labour’s growth promises.
“For Glaswegians to receive the services they need and expect, Reeves and Starmer must fully compensate the public and third sectors for that rise.”
A spokesperson for Glasgow City Council said it was “too early to say” what the higher tax bill would mean for services and said the local authority had already budgeted for increases in council tax.
Councils are considering hefty increases in council tax, after Finance Secretary Shona Robison gave the go-ahead for rises at last week’s Budget.
She insisted there was “no reason for big increases in council tax next year” – but around a fifth of Scottish councils are considering hikes of at last 10% next year, according to the Local Government Information Unit.
