Tens of thousands of Highland householders face hikes of up to £500 on their council tax as local authority chiefs try to claw extra cash into their coffers.
Residents of properties in bands E to H – more than a quarter of all Highland homes – will have to find the funds to pay anywhere between 10% and 25% more on their current annual charge.
Although bands A to D may remain unchanged or rise by no more than 3%, and the highest increase will only affect top-end homes, many hardworking families who have managed to secure homes in good catchment areas will be hit.
Highland Council chiefs warned last night that next year’s expected 4% government funding cut, on top of the current financial strains, is likely to reduce services by 25% over three years and cost jobs “from one end of the Highlands to the other”.
And raising council tax for 30,000 of the region’s 116,0000 homes is at the top of the agenda, the Press and Journal can reveal.
The end of the SNP’s nine-year freeze on council tax next April is welcomed by Highland councillors who have long called for the financial freedom to preserve local services.
A report from Highland finance director Derek Yule to next week’s full council meeting in Inverness will recommend holding tax bands A to D at their current level while increasing bands E to H by up to 10.2% and 25.5% respectively.
It equates to an extra £120 per year for Band E householders and £523 for Band H homes.
The report highlights “unprecedented uncertainty” over the level of council funding when the Scottish Government has indicated priorities to give the NHS an above-inflation boost, maintain police numbers, increase funding to devolved social security powers and to maintain the basic rate of tax allowance.
Council leader Margaret Davidson admitted that a likely 1% staff pay rise and new apprenticeship levy – a new UK tax – would swallow up 1% of the authority’s revenue budget next year, taking the overall budget loss to at least 5% and “possibly more.”
The council reckons it will need to find savings of £26million in 2017-18 and a whopping £72million of savings by 2020-21. Without increasing council tax, Mr Yule says those figures would rise to between £69million and £93million.
Mrs Davidson said it was inevitable that many more jobs would go, but hopefully without a need for compulsory redundancies.
“The public sector shrinking 25% – that’s jobs from one end of the Highlands to the other,” she said. “It’s quite an impact on the local economy.”
Highland finance chiefs calculate that the region will lose out by at least £2million when the Government effectively ringfences the rise form the unfreezing of council tax to put it into schools.
Councils will find out before the end of the year exactly how much cash they will receive from government.
A spokeswoman for the Scottish Government said: “It is the Scottish Government which is seeking to protect Scottish households from Westminster austerity.
“Every council area will have more funding as a result of our council tax reform. Local authorities will keep every penny of the council tax that is raised in their areas and there will be no change for three out of four Scottish households in terms of how much council tax they pay.”
Opposition SNP group leader Maxine Smith said: “The council yet again faces a massive challenge in terms of funding gaps. It’s becoming all too common but due to the grant cuts to Scotland from Westminster.
“We’ll keep a close eye on where the administration decide to go for these savings as we must insist that they protect the vulnerable, the poor and the elderly.
“Regarding the extra income from higher bandings of properties, I understood from ministers that money raised in Highland will stay in Highland.”
