Council tax is significantly cheaper in Scotland compared to England and Wales- anyone know why?

What_time_is_it

I've noticed that council tax in Scotland is considerably cheaper than in England and Wales. Does anyone know why that is? Does it cover the same things?

I know that water and sewerage are added on to council tax in Scotland but not in the rest of the UK. But this only amplifies the price differences.

Here's an example of charges for Edinburgh for a Band D property:
£1,447.69 plus sewerage and water of £502.29 = total of £1,949.98.

In Newcastle for the same year (24/25) it's £2,292.04 for a band D council tax.
And on top of that you would typically (estimate) pay sewerage and water of around £500.

So why is it £850 more expensive in Newcastle than in Edinburgh? I think this comparison works broadly the same when comparing other place in Scotland/England & Wales too.

Can anyone shed light on this?

MattMattMattUK

What_time_is_it said:

I've noticed that council tax in Scotland is considerably cheaper than in England and Wales. Does anyone know why that is? Does it cover the same things?

I know that water and sewerage are added on to council tax in Scotland but not in the rest of the UK. But this only amplifies the price differences.

Here's an example of charges for Edinburgh for a Band D property:
£1,447.69 plus sewerage and water of £502.29 = total of £1,949.98.

In Newcastle for the same year (24/25) it's £2,292.04 for a band D council tax.
And on top of that you would typically (estimate) pay sewerage and water of around £500.

So why is it £850 more expensive in Newcastle than in Edinburgh? I think this comparison works broadly the same when comparing other place in Scotland/England & Wales too.

Can anyone shed light on this?

It is not totally England vs Scotland, council tax varies wildly by local authority, though some of the lower rates are in Scotland, which is to do with the way grants from central government (and in Scotland the Scottish government) are distributed to local authorities. As a partial example all local authorities in Scotland get to keep 100% of their business rates, where as most in England do not, my local council only gets to keep 50% (the minimum share allowable) and has to give the rest to central government. Scotland is also subsidised by England (London, the South East and East of England specifically, every other region in the UK makes a negative net contribution) and that allows the Scottish government to make greater central grants and so lower council taxes. 

https://propertydata.co.uk/council-tax

DullGreyGuy

What_time_is_it said:

I've noticed that council tax in Scotland is considerably cheaper than in England and Wales. Does anyone know why that is? Does it cover the same things?

I know that water and sewerage are added on to council tax in Scotland but not in the rest of the UK. But this only amplifies the price differences.

Here's an example of charges for Edinburgh for a Band D property:
£1,447.69 plus sewerage and water of £502.29 = total of £1,949.98.

In Newcastle for the same year (24/25) it's £2,292.04 for a band D council tax.
And on top of that you would typically (estimate) pay sewerage and water of around £500.

So why is it £850 more expensive in Newcastle than in Edinburgh? I think this comparison works broadly the same when comparing other place in Scotland/England & Wales too.

Can anyone shed light on this?

You need to look at the wider picture, for those earning £28k or more the total of income tax and employee NI is higher than England. At £50k you are paying £1,542 more.

For central taxes distribution you have the Barnett Formula which calculates how much each of the four countries in the UK receive. On a per head basis it typically ranks N.Ireland, Scotland, Wales, England from highest to smallest. The formula was introduced as a temporary measure to resolve disputes but 46 years later many criticise it (inc Joel Barnett that created it) but people haven't been able to agree on an alternative. 

If you look at the cheapest council taxes you may be surprised... Westminster Band D is £973 but then it gets £2bn from business rates so can afford to have it low for residents. 

lincroft1710

The other aspect is that Band D in Scotland represents property of a much lower value than Band D in England

What_time_is_it

lincroft1710 said:

The other aspect is that Band D in Scotland represents property of a much lower value than Band D in England

Does that really matter? Aren't the values for each of the bands pretty much arbitrary anyway? So wouldn't a Band D property in Scotland be fairly similar to a Band D property in England?

lincroft1710

What_time_is_it said:

lincroft1710 said:

The other aspect is that Band D in Scotland represents property of a much lower value than Band D in England

Does that really matter? Aren't the values for each of the bands pretty much arbitrary anyway? So wouldn't a Band D property in Scotland be fairly similar to a Band D property in England?

There are so many different Band D properties in England that it is impossible to say.and what would be a Band D in one English county could be a Band C going north and Band E going south