Council tax could be hiked by 6% after freeze this year, Cosla warns

Scots could face council tax hikes of 6% in 2022 after Finance Secretary Kate Forbes offered authorities £90 million to freeze the charge in the coming financial year, MSPs have been warned.

Gail Macgregor, resources spokeswoman for local government body Cosla, also said staffing cuts may have to be made if councils do not get more cash to fund a pay increase for workers.

In her draft Scottish Budget last week, Ms Forbes promised councils would receive an overall funding package of £11.6 billion for 2021-22.

She said freezing council tax this year will help provide “financial reassurance to families who are struggling”.

Ms Macgregor told Holyrood’s Finance Committee authorities are clear that council tax should be determined locally – adding leaders would most likely have

“applied fair prudence” in determining any rises.

But she said it will now be “very difficult” for them not to take the cash from the Scottish Government to freeze the charge.

She stressed: “This is very much a local tax, it should have been left to leaders to make that decision. Leaders understand their communities and the pressures on households and would probably have applied fair prudence anyway.”

She questioned whether £90m will be enough to fully fund the council tax freeze, and added: “If it is not sufficient we will need to go back to government and ask for more.

“Is it baselined into the Budget? Because obviously if we don’t put council tax up this year it artificially keeps the base low, which means we need to double it to 6% next year.”

She also warned the committee that without a further increase in council funding, cuts could be needed to either pay or services, as she said the money being provided to authorities will not be enough to allow them to match the Scottish Government’s public sector pay policy.

That allows for a 3% rise for those earning up to £25,000 a year, while higher earnings will get a 1% increase, with this capped at £800

She told MSPs the Budget allocation only provides an additional £95m for councils, saying it “clearly falls very short of Cosla’s asks”.

Ms Macgregor said: “The £95m will only go less than halfway towards paying for an uplift in pay, the pay policy that was announced last week, if we were to just match, that would cost £205m.

“The £95m wouldn’t cover even the most modest of pay increases.”