Fife is one of several Scottish councils contemplating an increase in council tax – but the SNP’s finance spokesman insists that would be the wrong move.
The draft budget includes the suggestion of a council tax rise of 7.5 per cent, although this would have consequences in terms of funding from the Scottish Government.
The government wants local authorities to freeze the council tax for a ninth year. If Fife agrees, it will receive around £4.6m to compensate. If it doesn’t agree, it receives no additional funding.
A number of other councils are considering council tax rises – Highland. Falkirk, East Lothian, South Ayrshire and Moray, with the latter apparently considering a massive 18 per cent hike.
But Councillor David Alexander believes there are strong reasons to oppose an increase.
He said: “This is the wrong time to consider increasing the council tax by 7.5 per cent when inflation is less than one per cent.”
Citing a report by the Scottish Insititute of Revenue, Ratings and Valuations, which stated “households in the bottom deciles see the greatest benefit” from the freeze, Cllr Alexander added: “A rise will hurt those on lower incomes proportionately more than anyone else.”
He also insisted it would be “financially incoherent” as Fife would gain around £7m in additional income from a 7.5 per cent rise, but the council would have to charge the people of Fife £12m to achieve it as it would result in the government holding back £4.6m.
Cllr Alexander went on: “What Labour is asking the people to do is to pay more for less. The leader of the administration is suggesting this extra money will ‘maintain standards’, but this is not the case. The cuts facing Fife Council exceed £90m over the next three years. The additional money will reduce some of the cuts – at a major cost to Fifers – but the cuts continue. So the question needs to be asked – for how many years are Fifers going to be faced with increases of this magnitude?
“A one year increase of 7.5 per cent barely scratches the surface of the problem.”