A last-minute bid to defy the Scottish Government’s council tax freeze has been launched in Aberdeenshire.
Ministers have offered Aberdeenshire Council £4.7 million should the authority choose to freeze council tax as part of its budget, a policy the SNP says will help residents financially impacted by the pandemic.
But the move has been called a “cynical ploy just before an election” that could be a “recipe for additional cuts to council services, year after year into the future”.
Finance Secretary Kate Forbes last month announced a £90m fund to compensate local authorities who opt to keep their council tax the same for 2021/22.
She said it would “provide much-needed financial reassurance to those who are struggling”.
But ahead of a vote today, a group of four opposition members of Aberdeenshire Council have urged their colleagues across all parties to decline the offer – unless the council gets “cast iron” assurance of additional cash to make up for future losses.
If the additional money will not be available again in years to come, councillors on the Democratic Alliance group – composed of the Democratic Independent and Green Group (DIGG) and the Social Democratic Group – argue the move could result in longer-term financial problems.
Leigh Wilson, of the Social Democratic Group and formerly an SNP member, said: “The Scottish Government’s offer of extra funding in return for freezing the council tax looks like a cynical ploy just before an election.
“The crucial question is whether the additional funding is recurring or non-recurring.
“If it is a one-off, accepting the funding this year and freezing the council tax stores up serious problems for the future.
“The lower council tax base will result in reduced income to the council in 2022/23 and thereafter — unless additional government grant is provided annually to compensate for the lower council tax.”
He added: “Accepting a deal with non-recurring compensatory funding would be a recipe for additional cuts to council services, year after year on into the future.”
DIGG councillor Paul Johnston said: “Even if the loss of income is fully compensated by additional government grant, the council’s very limited financial autonomy is further reduced, which is wrong in principle.
“However, if we get cast iron assurances the compensatory funding is recurring, then we would agree to the freeze and funding package this year.”
The council group has argued that unless assurance is provided that the £4.7m will be recurring or even increased in the future, the authority should agree to increase its council tax by 4.8%.
Fellow DIGG councillor Martin Ford said: “We recognise, of course, that there are households across Aberdeenshire which are struggling with their own financial consequences of Covid.
“But residents, perhaps more than ever, need the services the council tax helps pay for.”
Conservative leader of the council, Andy Kille, last night refused to be drawn on whether he would support the move.
During yesterday’s finance and constitution committee in the Scottish Parliament, Murdo Fraser MSP asked the finance secretary if the funding offered to freeze local council taxes will be “baselined” for future years.
She said: “It’s very difficult as you’ll understand for me to be setting next year’s budget in advance of setting this year’s budget.
“I’m not in a position to determine what the envelope is for next year’s budget.”
Councillor Gwyneth Petrie, leader of the SNP group on Aberdeenshire Council, said: “There are negotiations to happen at parliament throughout the next month which may or may not clarify things, but it’s only fair for our residents that we set a council tax with enough time to allow them to prepare for what they will be paying.”
A government spokeswoman said: “In order to protect people’s incomes, local authorities are being offered £90m of funding – the equivalent of a 3% increase – included in the 2021-22 local government settlement to compensate councils who choose to freeze their council tax. This was announced as part of the 2021-22 Scottish Budget.
“We urge councils to accept this significant support which will help protect household budgets while at the same time protecting vital local services.
“In 2021-22, Aberdeenshire Council will receive a total funding package of £503.3m to support local services, which includes an extra £19m to support vital day to day services, equivalent to an increase of 4.1% compared to 2020-21.
“The day to day service funding includes £4.7m to compensate the council should it decide to freeze council tax levels.
“Decisions on local government budget allocations for future years are subject to the outcome of the on-going negotiations with Cosla however it is worth noting that the annual local government finance settlement includes £630m following the council tax freeze between 2008-17.”
