The Scottish government has reversed its controversial plan to use council tax changes to fund schools, opting instead to allocate £120 million directly from central resources—£20 million more than originally proposed. The decision follows widespread criticism from councils, who opposed the idea of diverting local tax revenue into a national education fund.
Under the revised plan, the additional money raised from changes to council tax bands will remain with local authorities, though many still anticipate budget cuts. The funds are earmarked for head teachers to spend on initiatives aimed at raising attainment, with a focus on supporting disadvantaged pupils. Schools with higher numbers of disadvantaged students will receive more money.
Finance Secretary Derek Mackay defended the U-turn, arguing that there would be no overall reduction in funding for local authorities, and highlighted additional investment in social care. However, councils will have less discretion over spending, as the £120 million for schools must be passed directly to head teachers.
From next April, households in higher-valued properties (Bands E, F, G, and H) will face increased council tax charges, regardless of local decisions. The changes were initially criticised as a 'backdoor national education tax' that would undermine the link between council tax and local services.
Local government organisation Cosla acknowledged the government's improved offer but expressed concern over a reduction in the core local government settlement. Cosla president David O'Neill stated: 'Cosla can never endorse a reduction to the core local government settlement... this decision will impact on services delivered by local government.' Councils are expected to learn their individual allocations by the end of the week.
