16 December 2005
Council tax bills in Scotland could rise by 6.6% because of a potential funding gap of £84.9m, an influential committee of MSPs has warned.
In a report published this week, the Scottish Parliament's finance committee also questioned the Executive's 'inequitable treatment' of local government over efficiency savings.
The report, on the Executive's draft budget for 2006/07, warns: 'The options for local government faced with this funding gap are either to raise council tax, cut services or raise further efficiencies.'
It adds: 'If the gap were to be met entirely from council tax, it would imply increases of the order of 6.6%. The Executive's target is 2.5% and the committee thinks that the reality will be somewhere between the two figures.'
The committee says it is concerned that a significant factor is the different treatment for councils in the efficient government initiative.
It claims that, in terms of cash releasing savings, local government appears to be contributing anything from twice to ten times as much as other departments.
Committee convener Des McNulty said: 'We are asking the Executive to look again at the efficiency savings it has set for its own departments and at its approach of imposing budget cuts in areas which affect frontline services such as local government and health.'
The MSPs point to a 'critical difference' between the Scottish and UK approach to efficiency savings. Whitehall has not top-sliced local authority budgets and UK departments and councils had been able to retain their own efficiency savings.
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