Exclusive:Edinburgh Council leader Cammy Day warns council tax freeze could cost city £20m if it is not fully funded

Leader Cammy hits out at surprise SNP decision as “ill thought through”

Councillor Cammy Day has slammed the decision to freeze council tax as “regressive” and “ill thought through”.

Edinburgh’s council leader says the council tax freeze will cost them £20 million if it is not fully funded.

At the SNP’s conference in October, First Minister Humza Yousaf made the surprise announcement that he is planning to freeze council tax.

Councillor Cammy Day, leader of Edinburgh Council. Image: Ian Georgeson.

It came after the Scottish Government previously proposed raising council tax rates by as much as 22.5 per cent for homes in the highest bands.

Mr Yousaf said the move would help more people who are struggling during the cost-of-living crisis. But it was heavily criticised by Cosla, the umbrella organisation for Scotland’s 32 local authorities, as the body was not consulted before the First Minister made the announcement.

Now Cammy Day, the Labour leader of Edinburgh City Council, says the council tax freeze is the equivalent of £20m in lost cash for the city, and could end up costing the government hundreds of millions of pounds.

Speaking exclusively to The Scotsman, Councillor Day said: “For every one per cent of council tax we are not allowed to increase, it is around £3.5m to £4m.

Humza Yousaf's council tax freeze could cost Edinburgh £20 million if it is not fully funded. Image: Jane Barlow/Press Association.

“We were intending to see a five per cent increase, so we are talking in the region of £20m for Edinburgh.”

He added the policy is “regressive” and “ill thought through”, as it “benefits wealthy people more”.

Councillor Day added: “My principled position is I don’t think freezing council tax or decreasing council tax should be taken away from councils.

“It is the only tax-raising power we have as a city.

“I accept that in the current climate it is difficult for people to pay more into the public bodies, but they are paying for the maintenance or improvement of services.

“If they want to freeze council tax I can’t stop them, but it needs to be fully funded.

“Every local authority will need to be compensated properly for the loss, and I’m guessing it will cost the government a few hundred million for this policy.”

Mr Yousaf has previously promised the tax freeze will be fully funded and paid for by the government.

On the back of Councillor Day’s comments, a government spokesman told The Scotsman the council tax freeze will benefit every taxpayer in Scotland at a time when rising prices are putting “significant” strain on household finances.

They added: “The total funding will be discussed and agreed in partnership with local government, and will form part of broader funding decisions made in the 2024/25 Scottish budget.”

Councillor Day also spoke about holiday lets licensing in the capital.

As of October 1, all landlords running a short-term holiday let had to apply to their local council for an official licence to do so. Edinburgh City Council has so far received around 3,800 applications.

The policy has been controversial from the start, with the Scottish Conservatives repeatedly calling for the policy to be postponed.

Critics warn the scheme could have a detrimental impact on the tourism industry.

However, others argue the new legislation not only helps to regulate the industry, but could lead to more homes being freed up for families to live in long-term.

This could be particularly important in the capital, as Edinburgh Council have just declared a housing emergency in the city.

There are around 5,000 people living in temporary accommodation every single night in Edinburgh, and around 1,200 people bid for each council house that becomes available.

The council says it needs more cash from the government, as some social landlords are no longer building new affordable homes for social rent in the capital because it is too expensive.

They also want the government to support them in trying to speed up the process for applying and bidding for council houses.

Councillor Day says he hopes the short-term lets licensing scheme will mean more housing is freed up for families to live in Edinburgh - but adds he doesn’t want to paint all landlords who run short-term lets with the same negative brush.

He said: “The increase in the number of short-term lets needs to be re-balanced.

“We need to allow people to actually live in properties in places like the Royal Mile, which is awash with short-term lets.

“We would hope the outcome is we see some properties returning to the market for families, but we are keen for no unintended consequences on reasonably priced accommodation during the festivals.

“There is a huge amount of fantastic people who run short-term lets, and in no way is the council trying to damage responsible landlords.”