Landgrabs Won’t Solve Glasgow’s Funding Woes

Like the tides, seasons, and interventions from Gordon Brown, floating the idea Glasgow should absorb some of the surrounding towns happens like clockwork. This time, it’s a (misreported) piece of research by academics at Sheffield University and the recent announcement that the People’s Palace and Winter Gardens on Glasgow Green are to close for want of funds to repair them that has set the usual suspects chattering.

Many of the people in the towns surrounding Glasgow come into the city and use our services, the argument goes, so isn’t it absurd they aren’t part of the city, contributing to the tax base that funds those services? Tellingly, the focus is always on Glasgow’s wealthy suburbs in the Easts – Bearsden, Milngavie and Bishopbriggs in East Dunbartonshire, Newton Mearns and Clarkston in East Renfrewshire.

Quite aside from the fact Scotland already has Europe’s biggest and least local councils, a situation this would only make worse, it isn’t the panacea for Glasgow’s public services its many supporters think. For one thing, the only tax councils currently have available is, of course, Council Tax. Given the name and the very visible dent it makes in people’s bank accounts each year, the contribution it makes to funding local services is commonly overestimated. Remember that in 2014, the Local Tax Commission found that a mere 12% of local government revenue came from Council Tax. With the end of the freeze, that may be ticking back upwards – but it’s still not very much.

In addition, even allowing for the fact these areas in the Easts are amongst the most affluent areas in Scotland, their councils have still been strapped for cash and have suffered significant cuts to services in recent years. Services that, and you’d think this would be obvious, would still need to be provided to these areas if they were annexed! These aren’t lands of milk, honey and glorious unspent taxes that can be diverted into Glasgow’s coffers – the combined area would have just as much money as it does now, to spend on just as many things. At best, it would allow a very minor shuffle in where that money goes.

Finally, I’d like to address the snobbery that comes with “let’s annex the wealthy bits”. Glasgow borders just as many areas that aren’t wealthy, places like Paisley and Clydebank which have similar longstanding issues with deprivation. Plenty of people from those areas come in as well and use the city’s services. But almost nobody ever wants to annex them, despite the fact exactly the same logic applies, because they only want the juicy bits, and not bits where they might have to contend with more deprivation.

In 2012, the statistical settlement of Greater Glasgow (in Green in the above map) had a population of approximately 1 million people. 60% of those were in the City itself, with a further 20% in affluent suburbs and the Rutherglen/Cambuslang area that spent 20 years as part of Glasgow District Council under the previous local government settlement. The remaining 20% are in those less affluent areas that aren’t subject to annexationist dreams. Yet the only reasonable annexation would be all of this area. Beyond that, there’s also a big chunk of Lanarkshire that forms an almost unbroken chain of settlement with the city – just on either side of a motorway. That holds the equivalent of another 30% of the population.

We could more than double the population of Glasgow City Council by drawing all of these areas into it, and improve the state of funding for public services in the city not one iota. The strain on Glasgow’s services doesn’t come from our neighbours coming in and using our roads or visiting our museums – never mind that a lot of those people are also working in our shops, our restaurants and our offices, contributing to the city’s economy, or in our hospitals and our schools, actually delivering vital services. The problem isn’t the boundaries of the city; and given I’ve constructed an entire set of alternative municipalities for the rest of Scotland, you all know fine well that’s not something I say lightly when it comes to local government in Scotland.

No, the issue here is with the basic financial structures of local government in Scotland, and being subjected to a decade of austerity – handed down from Westminster, yes, but exacerbated by a Scottish Government that has chosen to pass on out-sized cuts to local government whilst refusing to release its vice-like grip on local revenues. That’s what we need to fix if we’re to ensure Glasgow has adequate funding.

We need to scrap an outdated and regressive system of Council Tax, and replace it with a new system of proportional property taxes with a long-term view to Land Value Taxation. We need to make use of existing powers to tax vacant land, whilst strengthening and expanding those powers via a specific Vacant Land Levy. If we accept that people who use services should contribute to their funding, then that extends to tourists too – they use roads, bins, parks and museums whilst they are here, so let the council set a Visitor’s Levy.

And finally, let’s give at least some control over business rates back to the local councils. If the Easts have Glasgow beat on property values, then Glasgow has practically the whole country beat when it comes to the potential contribution to the city’s coffers from business rates. Letting Glasgow set and collect a portion of those rates would do more to broaden the city’s tax base than any amount of gobbling up the big houses on our borders.

Scotland desperately needs a fresh look at local government boundaries, but not in Glasgow. It’s time that people who should know better gave up on agitating for annexation, when instead they could be adding their voice to the Greens calls for local finance reform. Given there’s actually a budget coming up where that will be a key point of negotiation, there’s a real prospect to win big for Glasgow. Let’s focus on that rather than salivating over the prospect of raiding a mansion in Milngavie for the family silver.

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