Council taxes will increase because of the SNP budget settlement, warns local government body

Finance Secretary Shona Robison unveiled the SNP’s budget for 2026/27 last week and said there would be a “record” £15.7 billion given to local authorities.

However Cosla, the umbrella body for Scotland’s 32 local authorities, says the budget provides a “very poor settlement” which “fails to address the dire financial situation” councils are facing.

Cosla said the budget does not provide the £750 million they need to address the growing demand pressures in social care, and it does not resolve workforce and recruitment challenges, reverse cuts in non-statutory services such as culture and leisure, or stop the overreliance on temporary accommodation for those declared homeless.

In a report published on the back of last week’s budget, Cosla said: “As an alternative, councils face difficult decisions to increase charges and raise council tax rates to meet the budget gaps not addressed in the budget.”

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This comes after the majority of councils increased council tax last year, some by up to 15 per cent.

The report added: “The 2026/27 budget provided a small amount of additional, uncommitted revenue funding of £235m and an uplift to the affordable housing supply programme.

“However, there has been no increase in capital funding and a failure to fully fund the Scottish Government’s policy to pay the real living wage to workers in adult social care, children’s social care and early learning and childcare.”

The Accounts Commission has projected there will be a £538m funding gap across all councils in 2026/27.

Almost all council workers are due to receive a 3.5 per cent pay increase as well, however Cosla says this will cost more than the entire uncommitted funding in the budget.

It adds only 30 per cent of what local government needs for social care has been provided, as there is a £497.5m gap in health and social care partnerships in 2025/26.

Finally the report said the “minor” increase in the affordable housing supply programme does not reinstate the real-terms spending power local government needs, and this will result in reduced council borrowing and increases in council rent.

The report said the projections “pose an unsustainable reality for councils” and will result in “damaging cuts and impactful service reductions”.

It added: “The 2026/27 budget represents a very poor settlement for local government which fails to address the financial situation being faced by all councils across Scotland.

“The spending review does not address the acute financial projections for local government and reflects a deprioritisation of the sector and real-terms cuts.

“The impact will be felt by our most vulnerable citizens.”

Craig Hoy MSP, the Scottish Conservatives’ finance spokesman, said: “This scathing assessment from Cosla shows how damaging Shona Robison’s budget is for councils, which now face a half-billion-pound pressure on budgets and cuts in real terms.

“The SNP have tried to sell this as increased funding, but the money will be wiped out by pay rises alone, and households face the near certainty of whopping rises in council tax to try to plug the gap.

“Rather than misrepresenting the settlement as good news, Shona Robison should admit that her smoke and mirrors budget will lead to higher taxes and cuts to essential services.”

Mark Griffin MSP, Scottish Labour’s local government spokesman, said: “This report cuts through the SNP’s spin and confirms what we already know - this budget is more of the same from John Swinney.

“Scots are facing declining services and rising tax bills because of the SNP’s cuts to local government, and even the SNP’s own council leaders are calling it out.

“The SNP’s 19th budget won’t fix the mess they have made, but electing a Scottish Labour government in May will.”

Finance Secretary Shona Robison said: “The 2026/27 budget delivers record funding of almost £15.7bn for local authorities, a rise of £650m compared to 2025/26 which amounts to a real-terms increase of 2 per cent.

“Delivering sustainable public services that meet the needs of communities is at the heart of our priorities.

“We recognise the financial challenges that local authorities face, which is why we have provided a budget which builds on the Verity House Agreement and fiscal framework agreement.”