19 December 2003
Council tax bills in Scotland are set to rise by an average of about 4.5%, after the local government funding settlement announced this week by Finance and Public Services Minister Andy Kerr.
He told the Scottish Parliament on December 17 that councils would receive almost £7.7bn in 2004/05, an increase of £467.4m or 6.5%.
The new Aggregate External Finance (AEF) figure, which is the amount councils receive in grant and business rates, takes account of a decision to transfer the funding of housing and council tax benefits from the Department of Work and Pensions.
Kerr, who claimed Scottish local government was getting the funding it needed to ensure the delivery of improved services, said local authorities had already announced provisional council tax figures for the next two years, and added: 'Nothing I have announced today should have an adverse effect on these provisional figures.'
These show that council taxes should rise by around 4.5%.
The minister said his priority was to create stability for local government. The Executive had provided councils with three-year budgeting, it had removed council tax-capping and was introducing a new prudential system for capital expenditure.
He added: 'The settlement guarantees an above-inflation increase in revenue grant for every local authority in both 2004/05 and 2005/06.'
Kerr also announced a 1p in the pound increase in business rate for 2004/05. He said the below-inflation increase follows a business rate freeze in the current year. 'I believe this serves as evidence that we are listening to the concerns of the Scottish business community.'
However, Pat Watters, president of the Convention of Scottish Local Authorities, warned that councils would have difficulty in maintaining their core services.
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