Scottish Council Taxpayers Hit By £189m Increase Due To Local Government Cuts

29 November 2018, 06:37

money

Scottish council taxpayers were charged an additional £189 million last year to reduce the impact of cuts to local government, the latest figures show.

Funding for local government services was revealed to be £220 million (2.3%) lower in real terms in 2017/18 than the previous year, with most of the shortfall being made up for by increased council tax and charges.

Figures gathered by public spending watchdog Audit Scotland show that, in 2017/18, 13% of council funding, £2.3 billion, came from council tax, which was £189 million more than in 2016/17.

Every single Scottish council raised council tax - the majority by the maximum-allowed increase of 3% - raising an estimated £49 million.

Increased rates for council tax bands E to H and removal of second-home discounts raised £140 million, but benefited councils with a relatively higher proportion of higher-banded properties.

Councils should expect to have to make further cuts in the coming weeks, according to the report, which states: "The forecast trend is for further reductions in funding from the Scottish Government in the medium term.

"Pressure therefore remains on councils to make further savings and find ways to meet service demand more efficiently and effectively."

In a warning about the aftermath of Brexit, the report adds: "The impact of EU withdrawal is not yet clear, but councils need to identify the risks and develop contingency plans to manage these risks."

Eighteen councils ended 2017/18 with lower levels of usable reserves than they had at the start of the year an overall fall of £18 million.

Responding to the release of the financial figures, Scottish Labour's Finance spokesman James Kelly MSP said it showed "the shocking extent of SNP cuts to lifeline services."

He added: "As Audit Scotland point out, local government saw its budget cut by more than 2 per cent in real terms last year.

"The fact services did not suffer more is only a result of dipping into much-needed savings and reserves.

"That is unacceptable - and councils are already warning this situation is likely to get much worse this year.

"Rather than cutting lifeline services like the Tories, the SNP government should use its budget to stop the cuts and invest in local communities."

Scottish Conservative Local Government spokesman Alexander Stewart said: "This report shows in very clear terms that following SNP government funding cuts, council tax payers have been forced to step in and pick up the slack.

"No tangible improvements to services have been made since these hikes, just more of the same under a nationalist government with its priorities elsewhere.

"In some parts of the country, these council tax hikes have made it impossible for normal working families to move to homes they need.

"Yet all of this could have been avoided if SNP ministers, at the very least, had maintained levels of funding for local government.

"This has been a lose-lose scenario for those paying council tax, who are now worse off and still experiencing a below-par level of service."