Plan to raise city's council tax by £70 to stave off cuts

Published on Friday 1 October 2010 17:12

COUNCIL tax payers in Edinburgh could see a rise of up to £70 in their bills next year.

Talks are continuing between Finance Secretary John Swinney and local authority leaders about whether to continue the Scotland-wide freeze on council tax levels for a fourth year, but pressure has been growing for councils to be given the flexibility to raise extra cash in the tough economic climate.

Today, Edinburgh's finance convener, Phil Wheeler, said a three per cent rise would help reduce the need for spending cuts.

His comment came in the wake of evidence from the council's local budget "summits" and a series of surveys showing up to 70 per cent of Capital residents are willing to pay more in council tax to prevent savage cuts in services.

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Councillor Wheeler said the council had received around 7 million a year from the Scottish Government over the past three years as compensation for not raising council tax.

He said: "We would want that consolidated in our basic funding before we looked at anything else. But if we were then given the flexibility to raise the council tax within a ceiling, that's one way to help the council balance its books and a route that might be acceptable to our citizens.

"They would prefer to see us maintaining services rather than cutting them."

He stressed Edinburgh could not "go it alone" and the position on council tax would depend on the outcome of talks between Mr Swinney and the Convention of Scottish Local Authorities. But he said one possibility would be a three per cent "cap" on tax rises. He said: "This isn't party policy, it's just my own take on the subject.

"In Edinburgh, a one per cent rise brings in an extra 2.2m. If we could do it by three per cent, that would bring us in 6.5m or so and over three years that would be 19m, which we don't have at present and which starts to make a difference to our spending."

The council has said it expects it will have to reduce spending by 90m over the next three years. A cuts package approved last month will save 16m.

Cllr Wheeler said the mood of the consultations so far was that the public was prepared for limited tax increases. A three per cent rise would increase the average Band D council tax in Edinburgh by 35.07 to 1204.07 and the top Band H by 70.14 to 2408.14.

Scottish Government figures showed that without the three-year freeze, Band D taxpayers in the Capital would pay an extra 110.91 this year and Band H taxpayers an extra 221.83. The SNP said the freeze saved council tax payers an average of 247 each over the last three years.