Scottish council plans 10% tax hike as SNP ministers announce reform push

The SNP has consistently pledged in manifestos to overhaul the often criticised local levy system, but progress in finding a replacement has stagnated in recent years.

But Finance Secretary Shona Robison announced the beginning of a process to reform the tax - together with local authority body Cosla – which will begin with the commissioning of expert advice followed by seeking the views of the public in a consultation and a series of "town hall" style events to be held this autumn.

The announcement came as Scottish Borders councillors prepare to meet later this month to confirm a proposed 10 per cent council tax increase, which the authority has estimated will generate an extra £7 million.

The Scottish Government has confirmed the council will receive an extra £19m for 2025/26.

But Scottish Borders Council has said the majority of the additional funding would be used to pay for measures including free school meals and Real Living Wage payments.

Council leader Euan Jardine said of the rise: "It's an extremely difficult decision, but we didn't get into politics to sit back and make easy decisions.

"Unfortunately, where we are at the moment fiscally, tough decisions have to be made. It is not about playing politics with communities. It is about doing the right thing so we can sustain services in communities."

The decision comes despite First Minister John Swinney telling The Scotsman last month that proposed council tax hikes of 10 per cent were too high, as he urged local authorities to keep rises to a minimum.

Edinburgh has said its council tax could rise by as much as 8 per cent, after officials warned budget pressures were straining the city’s finances.

Any alterations to council tax in Scotland would likely require a legislative change that would push reform beyond next year's election.

Ms Robison said: "Partnering with Cosla, we want to examine ways to make council tax fairer, which will help to continue to deliver better public services across Scotland.

"By working closely with local authorities and listening to the public, we will be seeking a consensus on a local taxation system that is fairer, financially sustainable and fits a modern Scotland."

Cosla resources spokeswoman Katie Hagmann said: "Local authorities wish to see a fair and proportionate council tax, which benefits people and communities.

"Cosla is looking forward to working with the Scottish Government on a programme of engagement with the public, with the shared goal of achieving a better, fairer system of local taxation."

But the move to consult on council tax reform has been criticised by the Scottish Conservatives as "another talking shop to kick the can down the road".

Scottish Tory local government spokesman Craig Hoy said: "The SNP promised to abolish council tax back in 2007.

"It tells you everything about this Government's incompetence that they've delivered nothing after 18 years in power.

"Now, after almost two decades, the Nats' big idea is yet another talking shop to kick the can down the road.

"Our councils and public services are at breaking point thanks to the SNP's financial mismanagement and failure to tackle wasteful spending.

"On past form, if they ever do come up with a replacement, it is bound to mean taxpayers shelling out even more."

Lewis Ryder-Jones, an advocacy adviser at Oxfam Scotland, which is a member of the campaign group Tax Justice Scotland, said: "Council tax is enormously unfair and absurdly outdated – people's homes were last valued over 30 years ago, before the Scottish Parliament even existed.

"That's why Tax Justice Scotland, a campaign backed by over 50 organisations, is calling for modern, nationwide property and land valuations as a first step towards replacing the council tax with a fairer alternative.

"We've already had nearly two decades of dilly-dallying. Instead of more discussions and delays, it's time for ministers to start delivering by laying out a roadmap to real reform."

Scottish Lib Dem MSP Willie Rennie said "no-one believes the SNP will actually reform council tax".

"Until the SNP – the party currently in power – are willing to say what alternative system would be acceptable to them, the current unfair and badly designed system is here to stay," he said.

The most recent hint that a change in council tax could be imminent came from Scottish Green co-leader Patrick Harvie, who said in January last year a timescale for "fundamental" would be unveiled within weeks.

No such timeline materialised and the Bute House Agreement between the SNP and the Scottish Greens collapsed just months later, ending the tenure of Mr Harvie and his fellow co-leader, Lorna Slater, in government.

Scottish Green local government spokeswoman, Ariane Burgess, urged the Government to scrap and replace the council tax, rather than reform it.

"Tweaking and reforming it is not enough," she said.

"It is time to replace it with a fairer and more progressive system that would see most households paying less while the wealthiest would pay more."

Questioned on the extent of the planned Scottish Borders council tax rise, Ms Robison said: “Local authorities provide some of the most important services to our communities – from schools to social care. That is why we’re increasing their funding by more than £1 billion compared with last year’s Budget and providing them with record funding of over £15bn.

“I also announced an additional £144m towards the cost of the employer National Insurance contributions, which is the equivalent of a 5 per cent council tax rise. We continue to urge the UK government to fully fund its employer National Insurance increase.”