Second local authority defies Scottish Government to raise council tax

The decision comes a week after Argyll and Bute voted to increase council tax.

A second local authority has defied the Scottish Government to raise council tax.

The ruling Labour group at Inverclyde Council has backed an 8.2% hike this year.

A meeting on Thursday afternoon confirmed the council would not freeze council tax as it voted on its 2024/26 budget.

The decision to increase the levy by 8.2% in 24/25 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.

The council said the budget and council tax plans along with the use of council reserves means the local authority will fulfil its legal obligation to set a balanced budget without the loss of jobs and minimal cuts to services.

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.

Humza Yousaf said council tax rises are 'unjustifiable'.STV News

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

Finance secretary Shona Robison said Inverclyde Council had been offered £2.9m to keep the levy as is.

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

That claim is disrupted by the leader of Inverclyde Council.

Stephen McCabe said: “This has been the most difficult budget process that I have been involved in during my 17 years with the council.

“Despite the challenges, we are fulfilling our legal obligation to deliver a balanced budget and, more importantly, we are delivering a budget that protects frontline jobs and services for the people of Inverclyde.

“At a time when Inverclyde is haemorrhaging jobs in the private sector, we have kept council jobs losses to the bare minimum. The budget savings options put out for consultation included 110 jobs losses. This budget doesn’t include any of those proposals.

“A two-year budget also provides some short-term stability and a degree of certainty for council staff and the residents we serve. As anyone involved in setting the budget will attest to, it is a long and tiring process that takes its toll so this should provide some light relief for the next couple of years.”

On the rate of council tax, councillor McCabe added: “Council tax has risen by an average of 1.1% in Inverclyde over the last 16 years, well below the average rate of inflation, which is a big reason why the council is facing a huge budget deficit. This cannot continue. councils are at breaking point.

“By increasing council tax and utilising reserves we have kept service cuts to a minimum.

“A quarter of households in Inverclyde do not benefit from a council tax freeze as they are in receipt of council tax reduction, and they suffer most when services and jobs are cut.

“To put it into context, 2,300 of Inverclyde’s 40,000 households are exempt from council tax and 9,000 households don’t pay any more when council tax is increased as they are in receipt of council tax reduction. So, up to 28 per cent of households in Inverclyde won’t pay any more in council tax next year.

“The average weekly increase for the remaining 28,700 households is £1.99. For those living in Band A properties (46% of households) the weekly increase is £1.50 and for those in Band B (16% of households) the increase is £1.75.

“An 8.2% increase means the average council tax rise over the last 17 years is 1.5%, still significantly below the rate of inflation.

“We are today exercising our right as a council to set our own rate of council tax and to decline the Scottish Government offer to freeze the rate for next year.”

The Scottish Government has been approached for comment.

STV News is now on WhatsApp

Get all the latest news from around the country

Follow STV News
Follow STV News on WhatsApp

Scan the QR code on your mobile device for all the latest news from around the country

WhatsApp channel QR Code