City's anger at tax freeze 'blackmail'

Published on Tuesday 30 November 2010 16:55

SCOTTISH Government chiefs were today accused of "blackmail" after it emerged that failing to sign up to a new budget agreement would cost the Capital £34 million.

&#149 Jenny Dawe

City council chiefs need to inform the Scottish Government in the next three weeks whether they will accept an offer of a 2.6 per cent reduction in funding for next year in return for protecting teacher and police officer numbers, freezing council tax and continuing to deliver free personal care.

If they refuse, the city will face a massive 6.4 per cent funding cut, which council officials say would mean an additional 34m loss. City leaders today admitted they faced little choice but to accept the deal but hit out at the Scottish Government for imposing such tough terms on them.

Council leader Jenny Dawe said: "The thing we object to most is that it is ringfencing by the back door in terms of saying 'here is the money and this is what you need to do with it'."

The council's director of finance Donald McGougan is working on an assessment of the cost of accepting the offer and delivering the commitments demanded by the Scottish Government. There are growing concerns about whether the council will be able to deliver the pledges while coping with a 2.6 percent cut.

Councillor Andrew Burns, leader of the Labour group on the council, said: "It is a form of blackmail. I think we should make that objection clear in our letter of acceptance."

He added: "Finance leader Phil Wheeler has been quoted saying there is no choice and for once I agree with him.

"As a local councillor representing local people I take great offence that I have no choice but to agree. It is completely against everything an SNP Government should stand for in terms of independence."

The council tax rise in Edinburgh that would be needed to cover the 34m difference is around 15 per cent in one year.

One budget proposal by council officials is to reduce police funding for next year by 12 per cent, or 300,000, which could result in the loss of ten police officers.

Council officials are now assessing whether that cut can still be proposed even if the council accepts the Government's funding deal.

A decision to accept the deal is expected at the next full council meeting, on December 16.

A Scottish Government spokesman said: "This agreement is a very good deal for councils and local communities under challenging circumstances."