COUNCIL tax is likely to surge next year as the UK Government’s squeeze on finances continues to put Scottish Government spending under severe pressure, a senior MSP has speculated.
Finance Secretary Shona Robison confirmed a freeze in public sector recruitment in all but “essential frontline” posts last week as ministers struggle to fund pay demands.
Robison criticised the UK Government for failing to ensure rises for those such as NHS workers and council staff are fully funded.
Chancellor Rachel Reeves has required “about a third” of the cash needed to cover such rises to be “funded through departmental cuts”, Robison said.
Robison has imposed emergency spending controls across Scottish Government departments, with further spending in 2024-25 said to be only permitted if it is “truly essential or unavoidable”.
Fresh income streams are being sought and it is understood First Minister John Swinney and Deputy First Minister Kate Forbes are sceptical about introducing further income tax rises.
A senior MSP told The Times they believe revenue will be generated by allowing local authorities to raise council tax, which will provide a saving for the SNP Government that allocates council budgets.
Almost £210 million extra was handed to town halls to “fully fund” this year’s council tax freeze – a last minute announcement by former first minister Humza Yousaf in his speech to SNP conference last year.
The move by Yousaf was heavily criticised by the SNP’s former partners in government, the Scottish Greens, who claimed they were not consulted about implementing a freeze.
“Watch for the reverse of last year,” a senior SNP MSP told The Times.
“There is no appetite for income tax increases, but councils will be able to let council tax rip.”
It comes after the Scottish Government confirmed last Wednesday that it had “no choice” but to end universal fuel payments to pensioners due to UK plans to cut the Winter Fuel Payment and make it means-tested.
The Scottish Government’s Pension Age Winter Heating Payment is due to replace the current UK payment from winter 2024-25, but Robison appeared to indicate a delay.
She said: “We are asking that essentially it is delivered by the UK Government this winter and we will manage a very similar benefit for the following winter.”
Robison added the decision to means-test the new payment had been done “with a very heavy heart”, adding that “we know fuel poverty levels are higher in Scotland and the north of Scotland, in particular, have very cold winters, so it is absolutely the last thing we wanted to do”.
