Scottish town halls could defy Humza Yousaf’s council tax pledge
- Oops!Something went wrong.Please try again later.
- Oops!Something went wrong.Please try again later.
Town halls across Scotland are considering council tax hikes in defiance of Humza Yousaf’s pledge to freeze the levy after they rejected his attempt to impose a deadline, The Telegraph can disclose.
Local authorities, including some run by the SNP, have concluded that accepting the lump sum being offered by the First Minister in return for freezing council tax would mean deep cuts to services.
Among the councils said to be considering an increase are Falkirk, Inverclyde, Argyll and Bute, North Lanarkshire and Orkney, with rises of up to 10 per cent being mooted.
In a letter seen by The Telegraph, Shona Robison, the SNP finance secretary, tried to ramp up pressure on councils by giving them until Feb 16 to confirm whether they intended to freeze council tax.
She wrote to council leaders and chief executives last Friday offering an “alternative distribution” of the £144 million she has earmarked to fund the freeze. This is equivalent to the revenue from a five per cent council tax rise.
But, in a meeting on Monday, they told her the deadline could not be met as “the vast majority” of local authorities would not set their budgets until the weeks commencing Feb 19 or Feb 26.
Councils considering ‘potential cap’
A confidential report on the talks said she was forced to back down and “asked instead that, where possible, an indication of the expected direction of travel is provided by Feb 16 and/or the date at which this information will be able to be provided.”
However, the report, prepared by the Convention of Scottish Local Authorities (Cosla), proposed that town halls reject the freeze and instead “pursue the potential of a cap to council tax.”
It said the cap should be set at a level of more than five per cent, even though local authorities would still receive the £144 million earmarked for the freeze. Council leaders will discuss the proposal at a meeting on Friday.
Although many of Scotland’s 32 councils, including Glasgow, are expected to fall into line by implementing the freeze, a refusal by others would be deeply embarrassing for Mr Yousaf’s government.
The pledge is the First Minister’s keystone promise to help families with the cost of living crisis and has been used to counter criticism of his government’s decision to hike income tax again.
The threat of a town hall rebellion comes ahead of the 2024/25 Scottish Budget, which includes the freeze, facing its first vote at Holyrood on Thursday evening.
It is expected to pass due to the combined votes of SNP MSPs and their Scottish Green coalition partners. The Tories, Labour and Liberal Democrats confirmed they would oppose it, with the latter warning: “We cannot vote for a budget that impoverishes councils.”
Proposed freeze ‘a sham’
Cecil Meiklejohn, the SNP leader of Falkirk Council, told a full council meeting last week that she was prepared to write to Ms Robison warning that the “proposed local government finance order is unacceptable”.
James Bundy, a Tory councillor, said: “The SNP’s promise to freeze council tax while maintaining vital local services stands exposed as a sham.
“When even the SNP’s own leader in Falkirk deems the SNP government’s promised funding settlement ‘unacceptable’, it is evident that their promise is bound to be shattered.”
Stephen McCabe, the Labour leader of Inverclyde Council, confirmed that his local authority was among several considering rejecting the freeze and hiking bills.
In a consultation with residents launched last week, the council warned a freeze would mean finding £2 million of savings over two years, even if the levy rose to seven per cent in 2025/26.
The local authority said the shortfall would be only £440,000 if council tax rose nine per cent this year.
“The SNP Government are nervous about not being able to deliver what they promised and are trying to back councils into a corner,” Mr McCabe said.
“But what they are offering is a bad deal. They are being vague about whether this funding will be ongoing, or whether we will just be left with a bigger gap once the freeze ends.
“They are claiming it will be built into recurring funding but there is a lack of trust in the Scottish Government to stick to their word.
“I suspect most councils will freeze but it will bring a day of reckoning closer where we start to see councils going bankrupt like they have in England.”
‘Lump sum’ in return for freeze
Stephen Kerr, a Scottish Tory MSP, said the freeze was a “fraud” that would mean “cuts to vital services like schools, roads and waste collection to make up the difference”.
In her letter last Friday, Ms Robison said that in return for freezing council tax, local authorities would receive a lump sum based on the highest figure produced by two formulas.
The first was an amount “equivalent to what they would expect to obtain from a five per cent rise locally”, and the second “a distribution based on their share of gross national revenue”.
“I am, however, prepared to consider an alternative distribution if there is a different agreed proposition within Cosla,” she added.
The finance secretary insisted she needed to know whether councils would agree to the freeze by Feb 16 “to inform our approach” to the amendment stage of the Scottish Budget process on Feb 20.
The confidential Cosla report said council leaders rejected the deadline during Monday’s meeting with Ms Robison but she made clear her opposition to their plan for a cap “rather than a freeze”.
In a section titled “Proposed Cosla Position”, it said councils should continue to pursue a cap as long as a projected £63 million revenue shortfall “persists”.
The Cosla plan would allow local authorities to use the £144 million “as flexibly as possible, on the basis that all Councils would sign up to a cap (still allowing for those who wish to freeze)”.
The Scottish Government was approached for comment.
