Scottish council reverses decision to increase council tax

A Scottish local authority has said it will freeze council tax, having originally argued with the Scottish Government on the issue.

Inverclyde Council has said residents will receive a reduction in their council tax bills after councillors agreed to a one-off credit for the 2024-2025 financial year.

The council previously contested this, having last month announced it would increase council taxes as part of a two-year budget, stating the move would minimise job and services cuts, and would set a balanced budget.

On Tuesday, Inverclyde Council’s policy and resources committee agreed to approve a credit which will be paid into Council tax accounts to offset the 8.2 per cent increase in council tax that was approved as part of the budget last month.

Following negotiations with the Scottish Government, the council has secured approximately £2.9 million of additional funding that was earmarked for Inverclyde towards a Council Tax freeze.

Councillor Stephen McCabe, leader of Inverclyde Council and convener of policy and resources, said: “While I would far rather the council had the freedom to spend the additional £2.9m as we saw fit, I am pleased that after intense negotiations with the deputy First Minister and government officials we have been able to reach an agreement with the Scottish Government that means this money will come to Inverclyde rather than be spent on other Scottish Government priorities.

“Last month, the council exercised its democratic right to increase council tax as part of a two-year budget to minimise cuts to jobs and services and fulfil our legal obligation to set a balanced budget.

“That was the right decision at the time and was taken in the best interests of the council and the people of Inverclyde.

“What that meant was that we did not accept the Government’s original offer to implement a council tax freeze.”

He added: “However, more money has since become available towards a Council Tax freeze, which would not have been offered had we and two other small councils not made a stand, and we lobbied the Government for that money because it was earmarked specifically for Inverclyde and belongs to the people of Inverclyde who pay their taxes.

“I really do hope that the Scottish Government learns a lesson from this year’s budget process.

“They may have secured a national council tax freeze but that has come at a significant price.

“They have badly damaged their relationship with Cosla and local government more generally.

“They have forced councils and integrated joint boards to implement significant budget cuts and they have pushed Councils one step closer to effective bankruptcy.

“The First Minister should give an absolute commitment now that there will be no more freezes or caps on council tax for the remaining life of this Scottish Parliament and that he will now strictly adhere to the principles of the Verity House Agreement.”

Around 29,000 council tax accounts will now receive the credit.

A Scottish Government spokesperson said: “Scottish ministers are aware that many councils are under financial pressure, which is why the 2024-25 Scottish budget provides record funding for local government of over £14 billion.

“The Scottish Government has provided a real terms increase in revenue funding for local government in both 2022-23 and 2023-24, as confirmed by the Accounts Commission.

“Decisions on local government budget allocations for future years are subject to the outcome of negotiations with Cosla, the results of which will be confirmed in future Scottish Budgets.

“Any assumptions relating to possible future budget reductions are entirely speculative at this stage.”

Cosla was contacted for comment.