Scottish council tax freeze falters as local authority announces 10 per cent increase

A Scottish local authority has announced local charges will rise in a blow to Humza Yousaf's council tax freeze.

The Scottish Government has been locked in talks with local government since the first minister announced that policy at the SNP conference in October.

Councils body Cosla said it had not been given prior notice, despite the landmark Verity House Agreement between the government and local authorities including a 'no surprises' clauses, and leaders raised fears about affordability.

On Wednesday, Deputy First Minister Shona Robison announced an additional £62.7m of cash for councils to pay for the "fully-funded" freeze, which is aimed at easing the impact of the cost-of-living crisis on households.

The Scottish Government said the shift would take the total funding for local government to its "highest level on record".

But today Argyll and Bute Council has announced a 10 per cent tax increase for locals, claiming failure to do so would mean service cuts.

The charge for Band D properties will now be set at £1,627.

The budget passed by just two votes and leader Robin Currie said "every option" had been considered.

Currie stated: "This service-saving budget is only possible with an increase in council tax.

"Council tax funds council services. Increasing council tax saves services.

"It was a difficult decision to take but it is the responsible one."

The council was offered the equivalent of a five per cent council tax increase if it froze charges.

The local authority, which has its headquarters in Lochgilphead, said it had a revenue budget gap of more than £10m and a capital budget shortfall of almost £30m.

And it said that while ministers had confirmed their intention to provide additional funding, this was subject to the UK Government's spring Budget and so the £1.1m earmarked for the area "cannot be guaranteed or relied upon" at this point.

Lib Dem councillor Currie said: "We identified nearly £4m more in savings without affecting services or jobs. We took steps to raise income such as doubling council tax on second homes. But Argyll and Bute still faced a multi-million-pound budget gap that threatened council services people use every day."

Councillor Gary Mulvaney, policy lead for financial services, added: "The Scottish Government funding settlement available to the council on the basis of a council tax freeze would have meant cuts to services. Decisions made today keep services going for our communities. Decisions made today keep investment going in Argyll and Bute’s future."

Meanwhile, Fife Council has announced a five per cent rent increase for council houses from April in response to a "housing emergency". Average weekly rent will now be £86.53.

Councillor Judy Hamilton said: "We are on the brink of a housing emergency here in Fife and the rent increase we are introducing is lower than most other councils are implementing.

"However, that means there will still be a gap in the budget and this year we will be dipping into reserves to avoid that bigger increase for tenants.

"Tenants assessed the affordability of any increase and provided feedback on rent increases and on their priorities. To be able to deliver the tenants’ priorities, to continue to make home improvements, reduce fuel poverty and build new council houses, we need to increase rental income."