Council tax rise of 7.3 per cent suggested – but final decision rests with elected members

A COUNCIL tax increase of 7.3 per cent is being suggested in Shetland for the next financial year.

However the final decision lays with councillors, who may wish to choose to take a different direction.

The suggested 7.3 per cent increase features in a report which will go to the policy and resources committee on Thursday and then the full council next week.

The report says a 7.3 per cent increase would bring the SIC an extra £921,000 in income.

It comes after elected members considered a longer-term strategy to setting council tax last month.

A 7.3 per cent increase would see a Band D household having to pay an extra £1.95 a week. This rise would still see Shetland having one of the lowest rates of council tax in Scotland.

The SIC undertook a consultation on council tax in recent months, with more than 300 responses received.

Council tax is a form of taxation on domestic properties to help pay for local services, and in Scotland local authorities can set its rate.

Council tax currently brings in £12.6 million a year to the SIC, but there remains a large deficit at play – with more than £43 million needed in 2025/26 to balance the council’s budget.

At this stage it is being proposed that the draw from reserves in 2026/27 could reach more than £45 million.

Council tax for the current financial year saw an increase of ten per cent after a push from depute leader Gary Robinson, who said it could be a start towards the SIC getting back to a more sustainable position.

That came after a council tax freeze in 2024/25, which was incentivised by the Scottish Government.

The council tax for 2026/27 will be discussed first by members of the policy and resources committee on Thursday morning.

The will decision lies with the full council, which will meet next Wednesday to set its budget for 2026/27.

There is also a proposed 7.5 per cent rise in council house rents.

This is said to be the “minimum required to generate sufficient revenue to meet day-to-day operating costs and to help finance planned capital investment”.

All money raised through rent is ring-fenced in the SIC’s housing revenue account, which is only used to pay for services to tenants.

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