Council tax rise of 7.3% proposed for Shetland

A council tax increase of 7.3% is being suggested in Shetland for the next financial year.

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

The suggested 7.3% 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% 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% 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 their own 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 10% 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% 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.