Crisis-hit Scottish council considers 'significant' new tax hike to fill 32% budget gap

The local authority says it needs to raise council tax by 32 per cent to meet the budget gap

A crisis-hit council is to ask residents to consider a ‘significant’ council tax rise next year unless other funding options are agreed as it revealed a 32 per cent increase may be needed to fill its budget gap.

A report going before East Lothian councillors next week warns the local authority has exhausted its options as it faces a funding gap of £27 million in 2024/25. And it says urgent measures are needed now to tackled a projected shortfall of £14.6m this financial year.

Among immediate measures councillors will be asked to approve next week are a recruitment freeze, the shelving of capital projects and closure of buildings.

East Lothian Council headquarters

They will also be told that from September 1 only extreme cases will be considered for support from the council’s Scottish Welfare Fund, which is at risk of running out of money.

Overall finance bosses say the council will need to find £71m in additional funds over the next five years as it compares the shortfall to losing nearly 25 per cent of its services budget.

The report says: “The council is now facing the most extreme financial challenge it has ever faced, with significant financial challenges this year and an estimated recurring funding gap which will require the council to deliver financial savings equivalent to just under a quarter of its annual running cost over the next five years.”

The document adds: “Assuming the delivery of planned savings, to close this gap by council tax charges alone would require an increase by at least 32 per cent in 2024/25 in order for a balanced budget to be set. Among capital projects set to be shelved immediately, if approved by councillors next week, are work on East Saltoun Community Hall, Aberlady Primary School, East Linton Primary School and Haddington Sheriff Court building, which was due to be turned into a joint council/police hub.