Councils in tax warning over £739m black hole
SCOTS families could face massive council tax rises unless ministers help close a £739million Covid black hole, local authority chiefs have warned.
Officials said it would take increases of 50 per cent to annual bills to fill the gap.
They have called for a series of legislative changes to address growing deficits – which could also lead to a huge reduction in services.
Council umbrella body Cosla has published a report setting out the crippling costs caused by the Covid-19 pandemic. It estimates that there have been £739million of ‘additional costs’
‘Find a solution to this crisis’
SNP ANSWER TO ECONOMIC MELTDOWN? MORE TAXES
Friday’s Daily Mail
during lockdown – despite extra support from the Scottish Government.
A breakdown states that this includes £423million ‘loss of income’, £62million of ‘unique costs’ and another £162million in ‘local government mobilisation’. Further financial impacts have come from failure of councils to achieve savings targets.
According to Cosla, current laws mean council tax rises would have to be used to tackle any deficit.
The report states: ‘Given the initial forecasts from local authorities, it would require a council tax increase in 2021/22 in excess of 50 per cent. Clearly this is not feasible.
‘Council tax legislation should be amended to allow a financial deficit, attributed to Covid-19, to be repaid over a period of time significantly in excess of one year.’
It has been suggested that this should be extended to as many as 20 years.
Scottish Conservative housing spokesman Graham Simpson said: ‘The SNP needs to sit down with Cosla in the next few days and find a solution to this crisis.
‘The UK Government has given the SNP over £10billion to deal with the financial impact of the Covid crisis.
‘As local authorities say, eye-watering council tax rises are not sustainable so Kate Forbes needs to tell us how she plans to avoid them.’
If councils were to increase council tax by up to 50 per cent, this could see the bill for Band D homes in Edinburgh rise nearly £700 to £1,338. In Glasgow, a home in the same band would rise to £2,079.
Labour MSP Sarah Boyack said: ‘It is time for the Scottish Government to dig deep for our councils to prevent deep cuts to essential services.’
A Scottish Government spokesman said: ‘We have taken exceptional measures in every area of government as we deal with the challenges of Covid-19, and that is particularly clear in our support for local services.
‘We will continue to work with Cosla and local authorities, as well as pressing the UK Government for urgent additional funding and flexibility for our partners in local government.’
The Cosla report comes after the Auditor General for Scotland, Caroline Gardner, warned Scots face the threat of tax rises or cuts to services due to the severe impact on the country’s economy.