Local government chiefs have been analysing potential council tax increases of 10 per cent. This move poses questions to Humza Yousaf regarding his government’s strategy to cover a freeze in council taxes.
Documents obtained indicate that in order to safeguard community services during this financial crunch, some authorities are contemplating robust hikes in council taxes.
The SNP/Green administration has pledged to facilitate a nation-wide council tax freeze. Consequently, the First Minister has been summoned to elucidate how he will recompense local authorities for disregarding proposed increases.
Liberal Democrat MSP Willie Rennie remarked: “The First Minister’s proposal on council tax was so unexpected that even his personal cabinet and coalition members were startled.”
“Numerous councils were contemplating considerable increases to supplement their revenue. If a freeze is being enforced, councils will need full remuneration, failing which the First Minister will be compelling them to annul essential services.”
“With regards to tax, the direction in which Humza Yousaf is heading is unclear, whether it will be increased or reduced, which is obstructing the planning of finances for companies, households and local authorities.”
Yousaf triggered dissatisfaction among town hall leaders when he proposed plans for a council tax freeze during the SNP convention. This has aroused concerns about severe slashes to education, children’s services, local leisure centres, etc. due to the said freeze. Discussions about the sum of money that councils will receive to prevent any rises are currently in progress.
A document leaked from the council coalition group COSLA showcases the upsurges being considered.
According to the report: “COSLA officers promptly initiated an understanding of the outlook throughout Glasgow for planned increases and found some councils envisaging rises up to 10%. A swift survey indicates that most intend a 5-8% increase in Council Tax during 2024/25. Approximately 75% of the returns so far exceed 5%. Multiple councils were logically planning rises of 9 to 10% and have formed savings plans accordingly.”
“Few councils suggested that the size of the budget gap may necessitate the consideration of even greater hikes.”
Estimations by the Fraser of Allander Institute’s research team suggest a freeze on council tax would necessitate a £417 million grant from the Scottish Government to the councils.
However, these calculations assume an approximate 8% increase. If the rise crosses 10%, a much larger handout would be required from the Scottish Government to ensure a freeze in council tax bills for households. The freeze proposition was made amidst the Scottish Government’s claims of a £1bn deficit in their own budget. Yousaf was criticised for keeping councils and Green Ministers uninformed about the policy.
Top official John-Paul Marks, along with other civil servants, were made aware about the decision only at the last moment.
MSP Mark Griffin from the Labour party said: “This freeze will provide relief to Scots struggling with the cost of living crisis. However, there isn’t a clear plan for funding, and Scottish Labour has insisted that Scottish Government must cover any council deficit.”
“The SNP should not undertake policy on a shoestring budget and expect communities to foot the bill.”
A representative for the Scottish Government said: “The proposed council tax freeze in the coming year will benefit every tax-payer in Glasgow amidst rising prices, which are putting substantial pressure on household finances.”
They further added: “The total funding will be discussed and finalised in partnership with Local Government, and will be integrated into broader funding decisions made in the 2024-25 Scottish Budget.”