Government accused of 'dictating to us' over council tax freeze that will cost Edinburgh £5.2 million

The Scottish government ‘should not be dictating to us’ over a council tax freeze that will cost the city millions, a senior Edinburgh councillor has warned.

Funding call: Depute Leader councillor Cammy Day

Cammy Day, Depute Leader of Edinburgh City Council, spoke out after budget papers show Holyrood’s council tax freeze will cost the capital £5.2m.

The council had been planning to raise council tax by 4.79 per cent, but Holyrood’s local government settlement package, which halts council tax increases across Scotland, is funded at just 3.1 per cent.

The 4.79 per cent council tax rise would have netted the local authority £14.2m, which has now been reduced to £9m by the council tax freeze.

Funding gap - Green councillor Gavin Corbett

A briefing report, sent to councillors after the local government settlement was announced in the Scottish Parliament on Thursday, reads: “Expressed on a like-for-like basis, the Scotland-wide revenue budget settlement shows an overall increase of 0.9 per cent on the level of grant funding provided in 2020/21.

“Edinburgh’s increase is around 1.6 per cent, due primarily to a number of population-based distribution gains and the continuing operation of the second funding floor, whereby all authorities are guaranteed to receive funding equal to at least 85 per cent of the per capita average for Scotland.

“When compared to the level of funding assumed within the budget framework, this results in the receipt of additional income of £17.4m.”

However, the briefing note further warns that the inability of the Edinburgh Integrated Joint Board, a health partnership between NHS Lothian and Edinburgh City Council, to hit its planned savings will knock £4.7m from the increase.

Mr Day, the Forth ward Labour councillor, said: “For me, yes, it would be great to freeze council tax in the current climate where people are losing their jobs, and furlough, and anything we can do to help people I’d absolutely be behind that.

“What we shouldn’t have though is the Scottish government dictating to us what they want us to do.

“In Edinburgh, given it’s the capital city and has all sorts of other pressures on it, we set it at 4.79 per cent - so funding a 3 per cent pay freeze still means £5m to be found from other sources for the council.

“If the Scottish government wants to instruct us to freeze council tax, they should fully fund it, and it should be baseline, which is a big issue - if this is a one off, it means the impact for us cumulatively over the next few years just gets worse and worse.

“If they want to fund this freeze at 3 per cent, it should be baked into our budget for next year, but it’s a one year settlement so who knows that’s coming next year.

“I’m absolutely supportive of helping people during rough times, but that needs to come from the Scottish Government digging deep in their pockets and funding us.

“We can see yet again the Scottish government has ring fenced money for council tax - if they’ve got £90m to give to local councils, give us the money and let local councils make the decision.”

The Scottish government settlement was discussed at a meeting of the council’s finance committee on Thursday.

Scottish Greens councillor Gavin Corbett, who represents Fountainbridge and Craiglockhart, said: “Given that a 4.79 per cent increase, which is what was in the budget papers today, would have generated £14.8m, as opposed to the £9.6m from a 3.1 per cent assumed rise, isn’t it the case that irrespective what’s going to come at us with the budget, that next year we’ll start with that £5.2m less and there’s a £5.2m bigger gap than is in the papers today?”

The council’s head of finance, Hugh Dunn, said: “I think that all comes back to whether the settlement will be baselined with our share of the £90m that has been divided for the council tax freeze.”

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