Council taxes to soar as SNP cuts funding by £135m
LOCAL authorities are to be hit with cuts of £135million – leaving many Scots facing a dramatic rise in council tax bills.
Finance Secretary Derek Mackay claimed he was protecting council funding yesterday, but analysis of his Budget has revealed many local authority chiefs will face tough decisions on services and taxes.
Figures provided independently indicate councils face a £135million cut in their financial package from Holyrood – despite pleading for additional cash.
Instead of increasing funding for schools, roads and bin collections, Mr Mackay urged councils to raise their own money – by introducing tax hikes for residents.
Before the Scottish Budget was announced, the Convention of Scottish Local Authorities (COSLA) said it needed an additional £545million just to maintain current services.
But the Finance Secretary rejected the bid and imposed further cuts. Mr Mackay claimed he had planned to ‘treat local government fairly’, insisting: ‘I believe the Budget does that.’
He said it would increase ‘local authority core funding’ by £94million, instead of imposing cuts of up to £300million, as had initially been feared.
But he admitted if councils wanted to secure a ‘real terms increase’ in funding they would have to raise council tax by 3 per cent.
Analysis of his plans by the Scottish Parliament’s Information Centre (Spice) revealed councils would lose out on £135million.
Scottish Labour leader Richard Leonard launched a scathing attack on the Finance Secretary last night, claiming his Budget would ‘deepen the scandal’ that has seen £1.5billion stripped from councils in recent years. He said: ‘Derek Mackay says he knows councils were worried about a potential £300million cut – and that is true.
‘But what he is doing is cutting day-to-day spending in real terms by £135million when councils need an additional £545million just to stand still.
‘That’s an effective cut of almost £700million to our lifeline services. These cuts are not numbers only evident on a spreadsheet. They represent lifelines. They represent lives.’
In his Budget, Mr Mackay claimed local authorities could raise an additional £77million by increasing council tax bills for millions of Scots.
Many local authorities have already been forced to hike council tax bills by up to 3 per cent following the SNP’s Budget last year. This saw many council chiefs facing difficult decisions over which services they were going to have to limit or cut completely.
A number of Labour-run councils resisted the urge to increase the tax, but will now face the decision again.
Yesterday, Mr Mackay said: ‘I can announce today that the local government resource budget will be protected in cash terms and that the capital budget will be increased in real terms, which will result in a total increase in local authority core funding of £94 million.’
But he added: ‘Local authorities have the option to increase the council tax by up to 3 per cent. If they choose to do so, they will raise an additional £77million, which would secure a real-terms increase in local government funding.’
Conservative councillor Gail Macgregor, COSLA’s resources spokesman, claimed Mr Mackay was cutting hundreds of millions from councils – which would have an impact on the services’ they aim to deliver.
She said: ‘There are serious financial challenges that lie ahead in several areas and there is no doubt that these will have an impact on the essential services that councils deliver.
‘Whilst councils have the ability to raise council tax in their local area, that is a decision they will take based on local needs and circumstances and is subject to a 3 per cent cap which has been imposed on councils by the Scottish Government.’
COSLA president Councillor Alison Evison said: ‘COSLA has been engaging with all political parties across the parliament throughout this process and, as this is a draft Budget, we will continue to defend essential services over the coming weeks.’
‘Serious financial challenges’