No surprise some local authorities are considering increasing council tax, SIC leader says
THE LEADER of Shetland Islands Council (SIC) says she is not surprised to hear that some local authorities are considering increasing council tax despite the Scottish Government committing to a freeze in the next financial year.
Whilst Emma Macdonald reiterated that the SIC has not yet taken a decision on setting council tax for 2024/25, she said it was important to note that it is local authorities themselves that set the rate.
First minister Humza Yousaf raised eyebrows last year when he announced at a SNP conference that there would be a council tax freeze in the next financial year.
This sparked concern from local authority body COSLA, which said it is not up to government to decide council tax rates.
In 2023 the SIC raised council tax by 4.5 per cent following a self-imposed freeze the previous year, which is expected to bring in more than £460,000 of extra income.
Some other local authorities went further, with Orkney for instance introducing a ten per cent rise.
Council tax is used to help to fund the delivery of essential services.
The government said a freeze would be “fully funded” to the tune of £144 million but COSLA has suggested that due to cuts elsewhere the funding offered for a tax standstill would equate to only a 2.8 per cent rise.
A report in the national media this week suggested that the City of Edinburgh Council would look to raise its tax after calculating that a freeze would leave it worse off.
Speaking this week, Shetland North councillor Macdonald said: “Whilst the first minister made his pledge at the SNP conference I think it’s important to remember that local authorities set the council tax and it will be up to local authorities to make those decisions in the coming weeks.
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“I’m not surprised to read that some councils are considering raising their council tax as the reality of what is being offered will simply not be enough for some councils.
“It is well known that council tax freezes don’t benefit those who need the most help.
“Those who qualify for relief on their council tax will quite rightly already be receiving this.”
She said a freeze “simply reduces the money that local authorities across Scotland have and reduces the amount they can spend on other key services”.
Councils across Scotland are already making difficult decisions regarding their budgets amid rising costs.
A recent report by the Accounts Commission highlighted that there was a “significant increase” in funding gaps at Scottish councils in 2023/24 due to pressure such as increased demand for services, inflation and the cost of living.
“Shetland is obviously in a very different position – the gap between our grant from government is simply too wide to be made up by the council tax we set as we only have a set amount of homes that pay council tax,” Macdonald said.
“We therefore fund the gap with our reserves.
“I think in the coming weeks we will see more councils coming forward who will feel they have no option available other than increasing the council tax, particularly if they had planned to set it higher than what is being allocated.”
Scottish first minister Humza Yousaf previously said a freeze would bring “much needed financial relief to those households who are struggling in the face of rising prices”.
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