THE SNP and Tories have voted down a plan to scrap the council tax, arguing there was no consensus on what should replace it.
The defeat for the Scottish Green proposal at Holyrood could now make it much harder for the minority Scottish Government to secure its budget next year.
The Greens, whose support has been critical to the last two budgets, said they would not even enter negotiations on the 2019/2020 finances without concrete action on reform.
The SNP promised to abolish council tax when it came to power in 2007, but its proposed replacement proved unworkable, and it froze the levy for nine years instead.
Last year it replaced the freeze with a 3 per cent cap on rises, and hiked bills for Band E to H homes.
Green MSP Andy Wightman had urged Holyrood to end the present system and set up a cross-party “implementation group” by the summer to find a replacement.
But Finance Secretary Derek Mackay said there was “no majority view on a replacement” and no clear alternative proposition, making an implementation group “somewhat presumptive”.
He said council tax had become fairer through recent reforms, and £500m extra raised for public services was far from “tinkering”.
He said the government was determined to strike the right balance between protecting household incomes and funding services, and was open to further talks.
Most MSPs, 86, voted with the government with 28 voting against.
Echoing Mr Mackay, Tory MSP Murdo Fraser said the Greens wanted to scrap the tax “without any idea as to what is to replace it”.
He said: “We do not want to see discussions around tax reform used as a Trojan horse for yet more taxes on hard pressed Scottish families.”
He said councils should be given greater powers over other forms of taxation instead.
Mr Wightman said Holyrood should be ashamed of its continued inability to fix a “iniquitous, regressive and archaic tax” and modernise local government funding.
He said: “We’ve passed up a chance to scrap the hated council tax and begin work to replace it with a progressive alternative.
“Green MSPs cannot enter into discussions over the next budget if the SNP government continues to stall on local tax reform.
“We should be grasping the nettle on this. But it seems households and communities will continue to pay for the intransigence and obstinacy of the SNP and the Tories.”
Labour MSP James Kelly said: “Now SNP MSPs have joined forces with the Tories, it is clear they simply can’t be trusted on council tax reform. ”
Scottish LibDem leader Willie Rennie added: “Alex Salmond called the council tax unfair and insisted he would scrap it. Then he didn’t. We want to end the unfair and regressive council tax and replace it with a land value tax.”
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