Inverclyde could defy Scottish Government and raise council tax by eight per cent

Inverclyde could become the second local authority in Scotland to defy the Scottish Government and raise council tax.

The ruling Labour group has proposed increasing the levy by 8.2% this year and another 6% the following year as it looks to balance its books.

It comes a week after Argyll and Bute voted to increase council tax by 10%.

The Scottish Government has pledged £147m to councils to implement a freeze – giving them a funding boost equivalent to a 5% rise.

Councils were later offered an extra £62.7m. The funds will only be given to those councils which freeze rates.

Following Labour’s budget proposals in Inverclyde, finance secretary Shona Robison said the council had been offered £2.9m if it keeps the levy as is.

The deputy first minister said this would match the money raised from the proposed rise.

DFM @ShonaRobison has confirmed @inverclyde does NOT need to raise council tax, as the extra funds they'd receive from the @scotgov for implementing a council tax freeze would be equivalent to the amount raised by increasing council tax by 8.2%, which Labour are proposing.

🧵👇 pic.twitter.com/lnx27lpOiV
— Stuart McMillan MSP (@StuMcMillanSNP) February 28, 2024

Writing to Greenock and Inverclyde MSP Stuart McMillan, Robison said she “could not understand the rationale” of Labour councillors to “impose such a hefty increase in council tax on the people of Inverclyde as it leaves Inverclyde Council no better off financially in 2024/25”.

She added: “I believe this would be an imprudent choice and would not be in the best interest of the people of Inverclyde.

“In short, on Thursday the council has before it a choice between a fully funded freeze that baselines support for future years or Labour’s council tax hike that will provide no funding beyond that of a freeze but will forgo that support being the baseline.”

The £2.9m figure quoted by Robison is the total of Inverclyde Council’s share of the £147m to fund the council tax freeze and the extra £62.7m stemming from UK Government Barnett consequentials for social care in England.

But the leader of Inverclyde Council said there was “no guarantee the additional funding from the UK Government will materialise next week” and accused Robison of “playing politics”.

Stephen McCabe told STV News: “The cabinet secretary only came up with the offer of additional funding after it was clear that a small number of councils, including Inverclyde, were considering raising council tax.

“She had been telling COSLA for months there was no more money and in fact she isn’t coming up with more money.

“The money on offer is contingent on the Scottish Government receiving extra money from the Scottish Government next week in the UK budget. That is not guaranteed.”

McCabe said he had written to levelling up secretary Michael Gove to ask that the local authority directly receives the money from the UK Government, regardless of the decision to raise council tax.

He added: “The cabinet Secretary is playing party politics. The First Minister is so obsessed with achieving a Scotland-wide council tax freeze that they are trying to bully councils into accepting it.

“The central point however is that all the money for the council tax freeze is not guaranteed to be there next year.

“It is easy for the cabinet secretary to say she will baseline it but then cut the overall baseline next year as she has done this year. The only way to guarantee extra money for next year is to raise council tax.”

First Minister Humza Yousaf has said any council tax rise in Scotland during the cost of living crisis would be “unjustifiable”.

Deputy first minister Shona Robison said: “The funding the Scottish Government has offered Inverclyde to deliver a council tax freeze is equivalent to a rise of 8.2%. I simply do not understand why the administration of Inverclyde Council is saying they wish to reject this funding and instead increase council tax by 8.2% in the middle of a cost of living crisis.

“We’ve set out that the £45m in consequential will be available to councils who freeze council tax, and without the strict conditions that are being imposed by the UK Government on the source of this funding’s use, including the requirement for English councils to provide productivity and improvement plans to get their share.

“Despite a real-terms cut to the Scottish Budget, in 2024-25 local government will receive record funding with councils’ share of the budget increasing from 31 to 32%. In addition to the £14bn settlement for councils I set out in December, earlier this month I wrote to councils making available a further £62.7m in 2024-25 subject to improved funding being confirmed through the spring budget.”