Council tax freeze still on despite shortfall warnings

Published on 29/11/2008 10:01

FINANCE chiefs have insisted Edinburgh is still on course for another council tax freeze, despite other local authorities threatening to rebel against Scottish Government policy.

A number of councils around Scotland have warned they cannot deliver on a second year of the SNP's flagship policy of council tax freezes without extra government funding.

Inflation, bigger pay settlements and greater demands due to the recession are all cited as reasons for the need of a bigger council tax settlement.

City finance convener Gordon Mackenzie warned that without the 7 million being offered by the Scottish Government to pay for the freeze then city residents would be facing at least a three per cent rise in council tax costs.

However, city leaders are still pressing the Scottish Government for extra money to cover the expected 8m rise in energy prices, as well as other initiatives including free school meals and reducing class sizes.

Opposition leaders today expressed concern that the freeze is not being properly funded, which they warn is having a direct impact on frontline services.

Councillor Mackenzie said: "We are working on the assumption that there will be a freeze again this year and, although the situation is very fluid, I think we are odds-on for the freeze.

"The difficulty is that if we don't go for the freeze then you will be giving up the best part of 7m, which means you would then need at least a three per cent rise just to stand still.

"I would be very surprised if any of the other local authorities don't go with the freeze, but we are coming to the crunch time now so it will be interesting to see what happens."

The Scottish Government's offer is that councils must freeze their tax levels to receive a share of the 70m provided nationally for the purpose – enough, it says, to make up for councils foregoing a 3.2 per cent tax rise.

Edinburgh Labour group leader Andrew Burns said: "Any council tax freeze will obviously be welcomed by the public but it has to be properly funded.

"The evidence from the last 12 months shows us that the city did not get adequate compensation and it did have an effect on frontline services.

"The budget process has started and is meant to be settled within weeks, but we still don't know all of the details of the offer from the Scottish Government."

The Scottish Government yesterday claimed that the council tax freeze last year had in fact cost local authorities a total of 58m, 12m less than the original 70m allocated for the initiative.