The Scottish Government has rejected a council call to put forward millions in business rates relief for Aberdeen firms, ending weeks of speculation.
The council’s finance committee backed a plan where the local authority would put forward £3million to cushion the blow of steep rises – if Holyrood matched the contribution on March 9.
But now Finance Secretary Derek Mackay has written to council chiefs saying he is “not minded” to offer any additional rates relief.
The response came after he crumbled to pressure on the rates rises and put forward an 11th hour mitigation package in his budget in February.
Companies in the north-east have been facing crippling rises of up to 250% as the rateable value (RV) has been set at 2015 values before the full effects of the oil downturn were felt.
Finance convener Willie Young said the authority would now “consider options” ahead of the council’s next meeting of the finance committee – adding that other services may have to lose out to fund a rates package.
He said: “This is extremely disappointing because Derek Mackay clearly doesn’t understand the economy of Aberdeen. If he did he would have given the city extra money in the budget to mitigate these rises.
“The SNP government has taken more money from this city than any other before it and I’m confident that business people will see that Derek Mackay has once again let the city down.
“We will now consider options ahead of the next finance committee meeting in June.”
But SNP group leader Stephen Flynn accused the Labour-led administration of “crocodile tears” after a £4million package put forward by the group, totally funded by the council, had been previously rejected.
He said the party would bring forward the £4million if they won the upcoming council election on May 4.
He said: “I think that given the council is running a budget surplus of £3million, the fact that the administration is now putting forward no relief says everything about the Labour party and Willie Young’s commitment to businesses in the north-east.
“They were happy to use business rates as a tool to hammer the Scottish Government but are doing nothing to help mitigate the rises.”
Liberal Democrat leader Ian Yuill backed pushing for match funding but said that a commitment in the party’s upcoming local manifesto would commit them to £3million of relief.
Conservative group leader Tom Mason added: “Aberdeen City Council receives less money from the SNP than any other local authority in Scotland – yet when we ask for help to tackle local problems, the SNP simply abandon us.”
A Scottish Government spokesperson said: “The Scottish Government has already targeted additional rates relief in Aberdeen, as part of its funding a total of around £660 million of relief this year. Local councils can also reduce rates, and Aberdeen City Council should consider doing so if it feels there are local issues that still need addressed.”
