West Lothian council tax set for 4.5% rise amid 'unprecedented financial challenge'

Council tax in West Lothian is set to increase by as much as 4.5% increase when councillors decide on the budget next month.

That is the increase councillors are being asked to consider, and they were told setting the tax at that rate until the year 2027/28 would raise £23.6m over five years- a key element to balancing the budget as it is legally required to do.

West Lothian Council director of finance Donald Forrest said the rise was needed to develop a sustainable financial strategy for the coming year and following four years.

He confirmed the council would still face a funding gap of more than £47m.

Mr Forrest told a meeting of the council’s Corporate Policy and Resources Policy Development and Scrutiny Panel (PDSP) on Thursday: “Tax increases of some description would realistically form an essential component of any sustainable budget strategy for the council.

“As has been mentioned already the council is facing an unprecedented financial challenge as are all 31 other local authorities in Scotland.”

He added: “We are also facing fairly volatile circumstances. There are major risks and uncertainties that could impact on budget assumptions such as the level of pay awards, gas and electricity increases, changes to government policy or funding at short notice.

“On this basis I would advise that future levels of council tax are kept under review.”

In the local government finance settlement (LGFS), published in December 2022, the Deputy First Minister confirmed that the Scottish Government will not seek to agree any freeze or cap in locally determined increases to council tax, meaning each council will have full flexibility to set a council tax rate that is appropriate to their local authority area.

Following the publication of the LGFS a revised budget gap of £47.6m was reported to the council executive on January 17, including an assumed annual increase in council tax of 4.5% following completion of the officer’s review of council tax assumptions required to balance the budget as agreed by the Executive in December.

Three key elements govern council tax: Financial sustainability, collect-ability and affordability, and thirdly, how to mitigate the impact on low income households.

Papers before the panel showed that a 4.5% increase would mean a £1,373.87 a year charge for a band D property, which translates as £114.49 per month and £26.22 a week.

Band D is used as the standard measure for council tax. The Scottish average band D council tax is £1,347 compared with the West Lothian 2022/23 band D rate of £1,314.71. West Lothian Council has the tenth lowest council tax band D rate in Scotland.

A public consultation before Christmas showed strong support for increased council taxes. The council’s collection rate has remained consistently high, though as with all councils there was a dip in 2020/21 as a result of the Covid-19 pandemic.

Detailed budget saving options will be reported to individual PDSPs this week and next, with the budget setting meeting planned for February 21, 2023.