Why your council tax could rise despite Scottish Government pledge to freeze it

When Humza Yousaf announced in October that council tax would be frozen across Scotland local authorities were furious.

The Scottish Government had failed to let them know beforehand, instead keeping it a secret until the First Minister’s closing speech at the SNP conference.

Speaking in Aberdeen, Yousaf said council tax would be kept at its current rate when town halls set their 2024-25 budgets.

But last week Argyll and Bute Council put a sledgehammer to that pledge when councillors agreed to hike rates by 10%.

It’s the first Scottish local authority to announce a rise in council tax – but it may not be the last.

“I can announce to the people of Scotland that next year your council tax will be frozen”
First Minister Humza Yousaf to SNP members in October

Despite Yousaf’s promise of a nationwide freeze council tax could still increase across the country.

The reason why is that council tax is set by councils – not the Scottish Government.

Councils were told that if they kept rates as they were they would be given the equivalent funding of a 5% rise – with £147m being put forward to fund this.

Since the SNP came into power in 2007, council tax has been either frozen across the board or capped at 3%.

It is only over the last two years that councillors have been given more freedom, and most chose to increase the levy by between 4% – 7%.

Only around 13% of council budgets are funded by council tax, with most of the cash coming directly from Holyrood.

Local authorities across Scotland – and the wider UK – say they have been struggling for years to make ends meet.

For most of the town halls which chose to freeze their rates, cuts were made.

Councils say they are being forced to choose between budget cuts and tax rises. iStock

The Argyll and Bute budget surprised even some councillors in the area but the Tory, LibDem and independent administration said it had “no option” if it wanted to save public services and jobs.

Those comments are echoed across Scotland, including in South Lanarkshire where savings were made in nearly every department to close a £20.5m funding blackhole.

Glasgow City Council – which voted for the freeze – is looking to make savings of £107m over the next three years.

Along with the £147m in cash to fund the freeze, councils have been offered another £62.7m in the past week.

However, both are conditional on freezing council tax.

“For those councils like Argyll and Bute, who I think unjustifiably raised their council tax in a cost of living crisis, they will have to answer to their constituents,” Yousaf said on Monday.

“I think we will get a council tax freeze, I would hope, right across the country, because we will continue to engage with Argyll and Bute. I think they should reconsider.”

Deputy first minister Shona Robison – who is also the finance secretary – said local government is getting a larger share of the Scottish Government’s overall budget, rising from 31% to 32%.

She said local government is getting a larger share of the Scottish Government’s overall budget, rising from 31% to 32%.

Robison said the funding provided to the council was “fair” in the context of what she described as a “real terms cut” in the Scottish Government budget from the UK Government.