Fraser Of Allender Focus On A Council Tax Stooshie

3rd March 2024

When the Scottish Government announced its package aimed at convincing councils to freeze council tax rates next year, the noises from councils weren't particularly happy ones. The offer had apparently been upped from the £144 million in the Budget documents to £147 million, which is now quoted as the figure already allocated by the Deputy First Minister.

This week, another £62.7 million has been added, courtesy mainly of additional anticipated Barnett consequentials (£45 million) from English spending on social care, which the Scottish Government expects will be confirmed on Wednesday.

This seems to have got it over the line with a large majority of councils, which have now voted to freeze rates - although Orkney's decision is conditional on the UK Budget, and will be revisited on 11 March. There are still two councils yet to vote (Aberdeen City and West Dunbartonshire, both due on the 6th) but there are two holdouts already: Argyll and Bute (10% increase) and Inverclyde (8.2% increase), with neither set to receive their allocated share of the £209.7 million compensation pot as a consequence.

An important point that the papers for Aberdeen City Council's meeting make (pages 103-4, for those keen) is that freezing council tax in 2024-25 has an impact on how much money any rise in future years will generate, as it reduces the base from which future increases will be calculated. To compensate for this, East Lothian Council have pre-announced an indicative 10% increase for 2025-26. It will be interesting to see if any other authorities do this - there might well be an incentive to do so in advance given the difficulties in establishing an agreement over what rises might have happened in 2024-25 but for the Scottish Government’s intervention.

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