Exclusive:Double-digit council tax rises of up to 25% still being considered after Scottish Government lifts freeze

Finance Secretary Shona Robison has said council tax increases should be kept to a “minimum” in 2025/26, arguing that a proposed £1 billion uplift in funding for local authorities should prevent them from ratifying any “large” rises.

But with the freeze lifted and no cap imposed, some councils are soliciting views on potential increases that would add more than £370 to the annual bill of a Band D property. An analysis by The Scotsman of the positions adopted by local authorities shows at least 11 are considering options that would result in double-digit rises.

With a breakdown of the proposed local government settlement expected to be distributed to councils next week, elected representatives and local authority officials will spend time scrutinising the deal before ratifying their own budgets - and council tax changes - next February and March.

Already, however, it is clear the possible increases would stretch Ms Robison’s definition of “minimum” to breaking point.

A consultation exercise by Stirling Council that concluded last month asked taxpayers what they considered to be a “reasonable” increase, ranging from “less than 10 per cent” to “more than 25 per cent”. The latter band would generate an additional £15 million a year for the council, and add around £30.86 a month to the bill of a Band D property.

In Edinburgh, the council has said it believes it will need to increase council tax by more than 5 per cent, although the Budget implications are still being digested.

However, an ongoing public consultation regarding the city budget indicates the rise could be even steeper, with a sliding scale of increases going all the way up to 15 per cent. Cammy Day, the council leader, described the Budget as a “missed opportunity” to address years of local government underfunding, and said council tax was its “only true income raising power”.

A similar consultative exercise by Aberdeenshire Council has asked members of the public for their views on increases as high as 20 per cent. Its leader, Gillian Owen, said it was too soon to fully grasp what the Budget meant “in really clear terms” for the council. But with an estimated funding gap of more than £50m for the next financial year, she stressed it would “take time to carefully consider the options now open to us”.

At neighbouring Aberdeen City Council, the chief finance officer has previously recommended an increase of 7 per cent for 2025/26, which would raise almost £10m. However, its consultation exercise floated a series of indicative charges, ranging from 3 per cent through to as much as 15 per cent.

In Mr Swinney’s heartland of Perth & Kinross, the council is working towards an assumed council tax rise of 10 per cent for 2025/26, and indicative rises of 10 per cent for 2026/27 and 6 per cent in 2027/28. Other councils who have floated increases of 10 per cent or more via consultative exercises and budget strategies include Angus, East Lothian, Scottish Borders, Shetland Islands Council, South Lanarkshire and West Dunbartonshire.

Like other councils, Scotland’s biggest local authority in Glasgow will not arrive at a final decision until its annual budget is decided early next year, although a three-year budget set in February proposed rises of around 5 per cent in 2025/26 and 2026/27. Whether those levies change remains to be seen.

“It is early days,” explained the council’s treasurer, Ricky Bell, who said he did not foresee double-digit rises in the city.

“On the face of it, it’s a very positive Budget, but councils don’t yet know what their individual allocations will be. I’m very aware that Glaswegians are living through a cost-of-living crisis, so I’d want to keep any rise in council tax reasonable, while still protecting vital services.”

With other councils looking at single-figure increases, there looks to be little prospect of any local authority continuing to freeze rates in 2025/26. In the wake of the Budget, The Scotsman asked every council if they could categorically rule out any increases in council tax for 2025/26. Out of the 24 authorities who responded, not one replied in the affirmative.

According to veteran figures of Scottish local government, the extent to which taxes go up depends on various factors.

Donald Anderson, the former leader of Edinburgh City Council, said that while the extra resources announced by Scottish ministers would help, things would “still be tough”. He said: “That pain has been eased by the decision not to impose a council tax freeze, and I would expect councils to use some of the flexibility that will give them.

“I doubt they'll hike council tax significantly, but we shall see. Next year looks better, but that depends on the growth in funding under the Barnett formula being passed on in due course. Councils are keeping lots of plates spinning and there's a pressing need to look at public sector reform and greater joint working.”

The latter argument is one that will no doubt be revisited at Holyrood. One overlooked element of Ms Robison’s Budget was a proposal to “explore the creation of more revenue-generating powers for local authorities”.

Asked if that meant new Scottish local taxes were on the horizon, a Scottish Government spokesman said: “The tax strategy recognises the importance of having a tax system informed by robust evidence, including on local taxation. With this in mind, a formal public consultation on a potential cruise ship levy will be launched in January.”

The analysis of council plans comes as Cosla, the umbrella body for Scotland’s local authorities, gave a guarded welcome to the Budget.

Cosla representatives met on Friday to discuss Budget details. And while council leaders welcomed the £1bn increase in funding, they said it would take more than a year to restore their finances.

A statement from Cosla said: “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 has asked for extra resources, including the immediate release of £145m to fund teacher numbers, and greater flexibility over how some money linked to the Scottish Government can be spent.