Fresh call to end £33m police and fire VAT bill
By Andrew Learmonth
First Minister Nicola Sturgeon
THE SNP yesterday increased pressure on the Treasury to stop Scotland's emergency services paying VAT.
Police Scotland and the Scottish Fire and Rescue Service have no VAT exemption, unlike other police forces and fire services in the UK. It costs the Scottish services £33 million a year, say the SNP.
The issue has been raised as the union which represents
Scotland's rank-and-file police has said the force cannot take any more operational cuts.
During a campaign stop in Leith, Justice Minister Michael Matheson claimed the VAT issue would be easily fixed in a hung UK parliament where the SNP held the balance of power.
He said: "Westminster has dragged its heels on this issue for too long – SNP MPs at Westminster will press for Scottish emergency services to have the same VAT exemption as their UK counterparts. This will be very achievable in a hung Westminster parliament – but only if Scotland votes SNP."
The VAT bills were a result of the reform of the police and fire and rescue services that came into being two years ago. The change was one of the consequences of moving to central government funding and away from local authority funding.
Speaking at the conference for the Scottish Police Federation (SPF), effectively the trade union for police officers in Scotland, First Minister Nicola Sturgeon backed her Justice Secretary's call.
"We will argue for a fair deal for Scotland's police service. Police Scotland is the only police authority in the UK unable to recover VAT and is liable to an annual cost of around £23m.
"The Scottish Fire and Rescue Service is similarly disadvantaged, and is liable for an annual cost of around £10m. That is money that could and should be spent on front-line policing."
Speaking at the board meeting of the Scottish Police Authority on Tuesday, Police Scotland Chief Constable Sir Stephen House claimed that the force's annual £23m VAT bill was equal to an additional 680 officers.
House said: "We are the only UK police force not eligible to recover VAT. I'm frankly bewildered that we have to pay VAT as an organisation."
There have been precedents of other organisations being made VAT-exempt by the Treasury, including academy schools in England. But despite repeated lobbying by the Scottish Government, the Treasury has refused to back down.
A spokesperson for the Treasury was unable to comment on this issue as civil servants are restricted to what they can and cannot say during a General Election campaign.
When the subject was brought up previously, Danny Alexander, who served as Chief Secretary to the Treasury and is the Liberal Democrat candidate for Inverness, Nairn, Badenoch and Strathspey, said the Scottish Government knew the VAT charges would apply if the merger of Scotland's eight regional police forces into one went ahead.
During her speech to the police conference, the First Minister also insisted that SNP MPs and the Scottish Government would argue that income generated through court fines in Scotland should be kept in the country.
One of the recommendations of the Smith Commission report was that all fines, forfeiture, fixed penalties imposed by courts and tribunals in Scotland, as well as sums recovered under Proceeds of Crime legislation, should be kept by the Scottish Government and used for crime prevention.
Sturgeon said: "As was agreed in the Smith Commission, the revenue from court fines and fees should come to Scotland, there should be no limit on the amount of funding from proceeds of crime that we are able to secure and invest instead of handing to the Treasury. SNP MPs will make sure that commitment is delivered."
House also said this week that more savings could be achieved, but only with "extreme measures".
SPF chairman Brian Docherty dismissed the idea. He told the conference in South Ayrshire: "Expecting the police to do more with less is fanciful nonsense. All that can be delivered with less is less."