18 November 2005
Town halls in Scotland are preparing to impose council tax increases well in excess of inflation, despite First Minister Jack McConnell's insistence on an average of no more than 2.5%.
McConnell told the Holyrood Parliament that councils were adequately funded and would need to set a higher figure only if they chose to increase spending.
He said: 'There is no need for councils to increase their council tax by more than 2.5% next year.'
But Pat Watters, president of the Convention of Scottish Local Authorities, said the first minister had 'painted us into a corner' by giving them an extremely tight grant settlement, demanding efficiency savings and imposing extra duties on them.
'If you were being unkind, you could say Jack is speaking in a vacuum because even his ministers have gone on the record as saying the next two years will be horrendously tight,' he said.
Council officials say they do not believe they can keep council tax increases within a limit of 2.5%.
Parliament's finance committee budget adviser, Professor Arthur Midwinter, told Public Finance that councils were facing a shortfall of £108m. If this were translated into council tax increases it would mean a rise of 7.5%. However, he believed that, with economies and cuts in services, the average increase would be limited to 4%–5%.
He added: 'I think they have been set impossible targets. The arithmetic just doesn't add up.'
PFnov2005
