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Argyll and Bute defies Scottish Government to increase council tax bills by 10%

Argyll and Bute Council has voted to increase council tax by 10 per cent (PA)
Argyll and Bute Council has voted to increase council tax by 10 per cent (PA)

Councillors in Argyll and Bute have voted to increased council tax, in defiance of the Scottish Government’s attempt to enforce a nationwide freeze.

While First Minister Humza Yousaf had promised council tax would be frozen across Scotland this year, residents in Argyll and Bute are now facing a 10% increase in their bills.

Council leaders said the hike – which will see charges for an average Band D property rise to £1,627.12 – is necessary to help save local services.

The decision came hours after Deputy First Minister Shona Robison promised more than £60 million additional cash to councils as a “significant offer of compromise” in the row with local authority leaders over their funding.

Speaking in Holyrood on Thursday, Ms Robison said she hopes the council will “reconsider” the move, claiming it will leave the authority £400,000 worse off than if it had taken the funding offered by the Government.

The row with local government was sparked when Mr Yousaf told the SNP conference in October that council tax bills would be frozen across Scotland in 2024-25 – a move announced without first consulting council leaders.

At the time, the First Minister vowed to “the people of Scotland that next year, your council tax will be frozen”.

Ms Robison had already pledged to give councils £147 million in 2024-25 to compensate them for freezing council tax – making clear any authorities which increase the levy will not receive their share of this cash.

On Wednesday evening, she announced councils will get an additional £62.7 million – with this made up of £45 million due to the Scottish Government as a result of spending in adult social care in England, with a further £17.7 million increase in the general revenue grant.

In a letter to local government leaders, Ms Robison, who is also the Finance Secretary, said: “We will be allocating an additional £62.7 million to councils in Scotland for them to use as they see fit.

Shona Robison has made clear that councils which opt to put up charges will not receive a share of money being provided to fund a council tax freeze (Andrew Milligan/PA)

“In the context of the wide range of demands on the Scottish Budget and challenges across the public sector, I consider that this is a significant offer of compromise.”

Argyll and Bute Council leader Robin Currie said increasing council tax is still required to fund local services.

In what he said had been the “most difficult budget to set”, he told how the authority faces a “multimillion-pound budget gap” that threatens “council services people use every day”.

The Liberal Democrat, whose party is in a ruling coalition with Tories and independent councillors, said: “Our focus has to remain firmly on supporting people now, and on building the sustainable future we all want for Argyll and Bute.

“That focus cannot slip away in the face of severe and ongoing budget gaps.

“This service-saving budget is only possible with an increase in council tax. Council tax funds council services. Increasing council tax saves services.”

Speaking about the 10% increase, he added: “It was a difficult decision to take but it is the responsible one.

“Council tax reduction benefits are there to help those in greatest need. Communities across the area can continue to rely on the council services and support they need.”

Councillor Gary Mulvaney, the policy lead for financial services at Argyll and Bute, added: “The Scottish Government funding settlement available to the council on the basis of a council tax freeze would have meant cuts to services.

“Decisions made today keep services going for our communities. Decisions made today keep investment going in Argyll and Bute’s future.”

Ms Robison said Argyll and Bute Council’s decision was “disappointing”, adding that it was for councillors to “explain why they have chosen to ignore the additional funding that I set out yesterday for local authorities, and explain why they are increasing the tax by 10% in the middle of a cost-of-living crisis”.

She added: “The funding we offered for the council tax freeze as well as the increased funding offered yesterday is higher than the amount that would have been raised by the level of council tax that the council’s own officials suggested was needed for a balanced budget.

“To date, almost 50% of the population will see their council tax frozen, with 10 councils confirming that they will take forward the freeze, and one more publicly stating its intention to do so.

“This will benefit council tax-payers at a time when the cost-of-living crisis is putting significant strain on household finances.”

Scottish Conservative finance spokeswoman Liz Smith said: “This rise is a blow for those in Argyll and Bute, but it illustrates the impossible position councils have found themselves in after years of SNP underfunding and mismanagement.

“It also shows that Humza Yousaf’s unilateral decision on a council tax freeze was no more than a hollow boast and gimmick to please his own party members at their conference.

“There was no consultation, and Shona Robison’s combined threats and bribes did nothing to fix the black hole in council budgets.”