Cosla: Council Budget Restoration to Exceed One Year

Local authority leaders offered a cautious reception to the Scottish Budget unveiled on Wednesday. After a gathering of the representative organization Cosla, municipal leaders expressed satisfaction with a funding boost, yet indicated that financial recovery would require over a year. The Scottish government states its provision of an additional £1bn to local authorities, expressing a desire to avoid substantial council tax increases. Separate authorities are anticipated to determine local council tax increases in February, with these changes becoming effective in April. In a declaration, Cosla stated: “We must work together constructively to empower councils locally to invest in local priorities.” “We welcome the commitment that there will be no cap or freeze on council tax, accepting the principle that decisions on council tax are for individual local authorities.” “We also welcome the fact that the first minister and cabinet have delivered on their commitment, in line with the Verity House Agreement, that there would be substantive engagement with Cosla prior to the setting of the Budget.” However, Cosla simultaneously requested further resources. These demands encompass greater discretion regarding the expenditure of certain Scottish government funds and the prompt allocation of £145m for teacher staffing. Cosla additionally declared that it would be unacceptable for councils to bear the cost of modifications to National Insurance contributions. The Scottish government contends that its proposed funding package renders significant council tax increases superfluous. Numerous councils have recently been deliberating increases considerably exceeding inflation; for instance, Perth and Kinross has a proposition for a 10% increment. Each council will meticulously examine the implications of the Scottish government’s funding proposal for their operations in the upcoming days. Their evaluation will extend beyond the overall sum of money provided. They will also consider the degree of flexibility granted for its expenditure. A portion of the funds will be earmarked by the government, necessitating its allocation to specific services or initiatives. In the preceding year, numerous councils expressed dissatisfaction with an unannounced national freeze on council tax. The freeze itself, alongside its announcement by then-first minister Humza Yousaf without any prior notification or consultations, caused frustration among some local authority leaders, who perceived the action as disrespectful towards local governance. Given no effort to cap increases next year, each council will be responsible for determining its course of action once local budgets are finalized. The majority of councils operate as either coalitions or minority administrations, depending on other parties or independent councillors for backing. As councillors make determinations regarding increases, many are expected to consider the potential reaction of local constituents to any substantial rises. While councils will possess the authority to raise council tax by any proportion in 2025, their choices will probably be swayed by how local voters might respond to a considerable hike. During 2023, amidst elevated inflation, the majority of councils chose increases of approximately 5%, despite having the option to raise the tax further. In the year prior, merely two councils implemented tax increases exceeding 3%.