Why are councils hiking taxes and cutting frontline services?

Local authorities across Scotland are making the biggest hikes to council tax in decades.

Councils argue they have seen a broadly downward trend in the funding they receive from the Scottish Government for more than a decade.

In that time, they have been asked to provide new services to a growing and ageing population.

There has been greater demand for adult social care, support for children with additional needs, housing – services they legally have to provide.

They also have to deal with the increase in employer national insurance contributions, which is not being fully covered by the UK Government.

Council tax – payable by home owners and renters – helps pay for services like rubbish collection, roads, and street lighting.

A council tax freeze imposed when Humza Yousaf was first minister ends in April – meaning councils are able to raise them as much as they like to help plug their funding gaps.

The Scottish Government had hoped big tax increases would not be necessary given the extra cash it has provided for local authorities.

Councils say the increase in the grant is a welcome first step, but they have gone through years of having rates frozen or capped.

Local authorities across the country have multi-million black holes in their budgets.

In 2023, the Scottish Government consulted on whether people living in higher band properties should pay more – which would involve reforming the system.

Ministers decided that they would not change how it works this year, but that could change.

A report from the think tank the Institute for Fiscal Studies estimates Scottish councils will need to hike council tax bills by almost a fifth to keep pace with increases to local government funding in England.

David Phillips, associate director at the IFS, said: “If you look at the funding the Scottish Government is providing to councils in Scotland and you compare that to what is being provided in England, the increases in England over the last two years, the core funding from the Scottish Government isn’t keeping pace with what has been happening in England in the last two years.”

The IFS said “core spending power” for local government and schools in England is set to increase by 7.4% in real-terms between 2023-24 and 2025-26.

With schools in Scotland funded by local councils, the IFS said: “To match this, Scottish councils would need to increase their council tax by an average of 18-19%.”

We can expect more local authorities to announce rises in the coming weeks.