Scotland holds down taxes

9 Mar 00
A second year of modest council tax rises in Scotland was expected to be announced on March 9, with average figures within the 5% ceiling set by the Scottish Executive.

10 March 2000

As Public Finance went to press, many of Scotland's 32 unitary councils would not prejudge the final council meetings, at which budgets and council taxes were due to be finalised. A number of local authorities were still choosing between various combinations of tax increases and spending cuts.

And while a handful of councils were expected to set target-busting tax rises, it was widely expected that the average figure would not cause ministers any concern.

Glasgow was poised to continue to set Scotland's highest council tax, with an expected 1.9% increase taking its band D tax to £1,094. Edinburgh City Council's proposed 3% tax rise will mean that tax levels have only risen by a total of 12% since reorganisation in 1996.

The publication of spending guidelines by the Scottish Executive, along with its council tax benefit clawback scheme, which kicks in at 5%, provide a large degree of central control over council budgets.

The guidelines, fundamentally opposed by the Convention of Scottish Local Authorities, aim to bring councils' spending in line with government-aided expenditure over 15 years.

Speaking in the Scottish Parliament last week, Scottish Finance Minister Jack McConnell insisted the guidelines were not caps. But he also said that he 'expected councils to budget within the guideline' and that he would 'be quite firm in taking action if councils budget excessively'.

Last year, three councils – Aberdeenshire, Perth & Kinross and East Dunbartonshire – exceeded their guideline budgets by more than 1% but, despite a warning, McConnell has shown some flexibility in allowing the authorities more time to come into line.

Aberdeenshire was meeting to choose from four options involving council tax rises from 1.5% to 9.9%. The recommended option of an 8% rise would still see the council exceed its guideline by 1.4% despite making cuts of more than £12m.

Orkney was considering a 12.2% tax rise which, if approved, would take its band D tax to £700 and leave Shetland Islands Council with the lowest tax at £684, despite an expected increase of 10.1%.


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