Inverclyde Council leader Stephen McCabe has offered the Scottish Government a “compromise” after the local authority voted to raise council tax.
The council joined Argyll and Bute in defying the government’s council tax freeze as it announced its budget for the next two years at a meeting on Thursday.
Inverclyde Council announced an increase of 8.2% this year, which means the band D level will increase by £117.24 to £1,547.01 – or an extra £2.25 a week.
The council had initially been facing an estimated £12.5m funding gap over the next two financial years.
Councillor McCabe has now written to finance secretary and deputy first minister Shona Robison offering a “compromise agreement”.
He wrote in the letter: “As you will no doubt be aware, last night Inverclyde councillors exercised our democratic right to increase council tax. I am sure you will fully respect that decision.
“Recognising however the First Minister’s desire for a national council tax freeze, I am writing to offer you a compromise agreement.
“In your letter of February 27 to Stuart McMillan MSP you stated that around £2.9m, subject of course to additional funding being received by the Scottish Government from the UK Government, was available to the council to support a council tax freeze.
“This sum obviously remains unallocated. If you were prepared to make this funding available on a recurring basis, baselined into the local government settlement for 2024/25 and beyond, I would be prepared to recommend to the council that we use the funding for 2024/25 to provide Inverclyde households with a one-off rebate on their council tax charge for 2024/25, which would mean that Inverclyde residents would receive a freeze in their council tax for 2024/25 in line with the First Minister’s national policy priority.
“This, I believe, offers a win-win-win for all concerned. The Scottish Government gets its national council tax freeze; Inverclyde households benefit from a local council tax freeze; and the council receives the benefit of a stronger council tax base.
“I hope you will be prepared to accept this compromise in the spirit it is offered. I have taken the liberty of copying this letter to the president and vice president of Cosla and the resources spokesperson, as well as to councillor Elizabeth Robertson, leader of the council’s SNP Group.
“I look forward to hearing from you. A prompt response would be greatly appreciated so that we can make the necessary arrangements for the rebate to be made.”
After receiving the letter, the deputy first minister said: “I can see no rational financial or economic reason for the administration to Increase the council tax by 8.2% in the middle of a cost of living crisis.
“The council are aware that if they freeze the council tax in Inverclyde they would have been provided with the same amount of money they are hoping to raise from their 8.2% hike. Instead, it will sadly be the people of Inverclyde who will have to literally pay the price of the council administration’s imprudent decision.
“For the sake of Inverclyde’s residents I hope the administration will think again as they have time to revisit their decision after next week’s Spring Budget.
“To date 28 councils have confirmed that they will take forward the fully funded council tax freeze, benefitting their residents at a time when the cost of living crisis is putting significant strain on household finances.”
Cllr McCabe also wrote to levelling up secretary Michael Gove this week, urging him to come to the aid of Scotland’s local authorities.
The approach, which was echoed by West Dunbartonshire Council, pressed for an “urgent intervention” from Gove to secure extra cash.
The council leader defended the letter on BBC Radio Scotland on Friday, saying: “We’ve got a United Kingdom Conservative Government, we deal with them all the time over lots of things.
“The reality is the relationship between the Scottish Government and local government has broken down, so we are perfectly entitled to go to the UK Government.”
On Thursday, Scottish council umbrella body Cosla joined with local government associations in England, Wales and Northern Ireland, sending a letter to Jeremy Hunt urging him to provide “sufficient investment to local government”.
On Thursday, Inverclyde Council defied the government, voting to increase council tax by 8.2% this year and 6% next year.
The plan, McCabe said, would not be “universally popular”, adding: “But we did consult the local population before we took a decision and, in terms of responses we received, 66% of our respondents said they would be prepared to pay up to a 9% council tax rise to protect jobs and services.”
Asked if the increase could be afforded, Mr McCabe said the impact would be nominal.
“Most of our population live in the lower band of properties, 46% of the population lives in band A, their council tax will go up by £1.50 a week,” he said.
“The average increase of all those who will pay council tax will be £1.99 a week. I don’t think that is an unreasonable amount to pay extra to protect jobs and services.”
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