CITY finance chiefs want council tax to rise by three per cent from April 2017 to avoid even steeper cuts to public services.
In the latest sign of intense budgetary pressures, they have called for an end to the Scottish Government’s council tax freeze.
They hope the move will generate around £21 million between 2017 and 2020, which has also been factored into the £141m savings target – a sum of £126m and a contingency of £15m – set for the next four years. And they have warned the scale of planned cuts will have to increase “significantly” if they don’t win backing.
However, it is believed there is little appetite for change among senior SNP figures, including Finance Secretary John Swinney.
The freeze works through a carrot and stick approach – councils would lose government money if they put up the tax, so any rise would need to be significant to have an impact.
A three per cent rise would see the average council tax bill (Band D) rise from £1586 a year to around £1621, including water charges.
Deputy finance leader Bill Cook said: “Our budget figures assume that the council tax will be lifted in years two, three and four of the budget period.
“Our assumption is that there will not be a council tax freeze and that there will be a change of policy, generally, in years two, three and four, otherwise that £126m figure goes up, quite significantly.”
The council tax freeze has been one of the Scottish Government’s flagship policies since it came to power in 2007, with sources suggesting the party is unlikely to abandon it now.
First Minister Nicola Sturgeon has set up a commission to look at alternative systems and it is expected to report later this year. But leading Nationalists often boast of how much they are saving ordinary people through the freeze. Her government gives local authorities a total of £70m each year to compensate them for freezing the tax.
One source said: “The council tax freeze is something the SNP has put a lot of emphasis on. The only way it would be changed would be if it was linked to a reform of the system.”
Indications that Edinburgh is pushing for a change in tax policy come after the Convention of Scottish Local Authorities (Cosla)called openly for an end to the current system.