Council tax could rise in Falkirk to meet funding shortfall

Finance Secretary John Swinney and First Minister Nicola Sturgeon as he prepares to reveal his draft budget last month which Labour says leaves them with a bigger deficit, a claim disputed by the SNP
Finance Secretary John Swinney and First Minister Nicola Sturgeon as he prepares to reveal his draft budget last month which Labour says leaves them with a bigger deficit, a claim disputed by the SNP

Council tax bills could rise for the first time in nearly a decade as town hall bosses struggle to fill a £7 million gap in funding.

Falkirk has the lowest charge in mainland Scotland – but after an eight year freeze that might be about to change.

Moray Council has already announced plans to vote next month on an 18 per cent hike in April and locally council leader Craig Martin has refused to rule out his administration might follow their lead.

Any move against government policy would result in its funding being cut straightaway by 3.6 per cent or £1.8 million.

On that basis it is understood a ten per cent rise is being considered which would mean home owners and tenants in a Band D home having to find £2 a week more.

The council has already refused to accept the Scottish Government’s settlement package for 2016-17 in protest at Finance Secretary John Swinney’s decision to slash grant support across the country by £774 million.

Although the 7.2 per cent cut in real terms falls to 3.5 per cent when extra money diverted from the health budget is taken into account, it has still forced Falkirk to find budget savings of around £25 million this year – not £18 million as originally thought.

And it all comes just weeks before the local 
authority meets to finalise 
its budget for the coming year.

Councillor Martin told The Falkirk Herald: “The settlement announced on December 16 by Mr Swinney was well short of what we had been expecting and the latest miscalculation by civil servants over the waste strategy fund has reduced that figure by £880,000 more.

“Coupled with the lack of clarification surrounding how the £250 million in the budget for integrated health and social care will be allocated to councils means absolutely nothing – including the level of council tax – is off the table when it comes to discussing how this funding gap can be managed and at the same time front line services and jobs can be protected.

“The question of raising council tax has been discussed to avoid closing things down.

“We and other councils have written to the finance secretary seeking clarification. He has said it’s an all or nothing package, so I think we are heading for a ‘Mexican stand-off’.”

At last week’s executive meeting chief finance officer Bryan Smail said: “It is still not known what access the council will have to this major resource. Clarification on this fundamental issue is urgently required.”

Moray became the first local authority to rebel against the policy to plug a gap of nearly £12 million in its budget.

The authority said council tax bills could rise by as much as 18 per cent this year, which would see the annual bill for a Band D property increase by £204.

Other local authorities, including Highland and Fife, are understood to be reassessing the council-tax freeze as they prepare their budget proposals.

None of Scotland’s 32 local authorities have increased the tax since the Scottish Government introduced the freeze in 2007, soon after the SNP came to power.

However, the Scottish Government, which has previously threatened to cut the funding of authorities that do not sign up to the policy, said Moray’s decision was “unnecessary and premature”.

‘Huge relief for those on low incomes’

The SNP opposition group on Falkirk Council has rejected the administration’s argument.

Members claim many people, particularly those on low incomes, have benefitted from local authorities agreeing to the deal.

Councillor Cecil Meiklejohn, SNP group leader, said: “For each of the nine years the council tax freeze will have been in place, Falkirk Council has received an additional £1.8 million – a total of over £16 million or the equivalent of a 3.8 per cent increase in the council tax for each year.

“This means the council tax freeze has benefited the average family by over £2000 during this time. If the Scottish Government hadn’t financed the freeze then this year’s Band D council tax would have been at least £426 higher.

“At a time when families are being hard-pushed and wages being frozen, then we believe that the council tax freeze has been a huge relief for those on low incomes.

“Indeed, even the current council leaders have admitted that the fastest growing group requiring the assistance of food banks are low paid workers, the very group who benefit most from the council tax freeze.”

Mrs Meiklejohn called on the administration to “put their money where their mouth is” and decide whether they wanted to forfeit the £1.8 million offered and increase the council tax by four per cent or more.

Referring to the £25 million ‘shortfall’, she added: “What the Labour and Tory Parties need to do now is tell us how much they would increase the council tax by to make any significant impact on their so-called black hole.”