LOCAL authorities in Scotland are to be given “complete flexibility” to raise council tax rates as much as they wish by the SNP-Green Budget.
While the Scottish Budget, announced by Kate Forbes on Thursday afternoon, did not raise income tax rates, it will allow councils to raise their local tax rates as high as they deem necessary.
Forbes did not mention council taxes in the Holyrood chamber, but the policy was revealed in a 138-page Budget document released by the Government.
The jump in council tax rates is likely to be steep, as councils agreed to freeze rates from 2021-2022 due to “the impact of the pandemic on households”.
Instead of a rise hitting taxpayers, councils were handed the equivalent of a 3% increase by the central Scottish Government.
However, that support will no longer be made available. Instead, the Budget document states: “For 2022-23, councils will have complete flexibility to set the Council Tax rate that is appropriate for their local authority area.”
It adds: “In setting Council Tax rates, we expect councils to take full account of local needs and of the impacts on household budgets of the decisions they make.”
A freeze on council tax rises was brought in under the first SNP government's first Budget, in 2008-9. That remained in place through successive Budgets up to 2016-17.
In the financial years 2017-18 and 2018-19, council tax rises were capped at 3% after an agreement between local authorities and the SNP government.
In 2020-2021 the increases were capped at "4.84 per cent in cash terms (3 per cent in real terms)", according to an official statistics publication from last year.
Speaking in Holyrood to announce the Budget, the Finance Secretary said that the amount of cash available had been hit by Brexit.
READ MORE: Scotland's block grant to remain 'flat in real terms' for years, economists warn
Forbes told MSPs: “While all other parts of the UK have seen a negative impact as a result of Brexit, the scale of that is three times higher in Scotland than in London.
“Be under no illusion, the Budget I’m presenting today is smaller than it would be if it wasn’t for the impact of Brexit on our economy, a Brexit that has been imposed on Scotland against the express wish of the people that live here.”
Forbes announced that, of the £35 billion available in the block grant, more than half (£18bn) would be spent in Scotland's health and social care sectors.
She said the spending would help “address immediate pressures across the NHS”.
Forbes also pledged nearly £2 billion to go towards decarbonising Scotland’s homes, buildings, transport, and industry, saying fighting climate change must be the “defining mission of our generation".
Commenting on the council tax policy announced in the Budget document, the Scottish Tories' finance spokesperson, Liz Smith (above), said the Government had "quietly opened the door to massive council tax rises next year".
She went on: "Kate Forbes didn't even mention it in her statement but the government have completely removed the cap on tax hikes at an incredibly difficult time, when many Scots are already struggling to get by.
"The SNP are leaving local councils with a horrid choice between failing to deliver essential services or making up the shortfall through eye-watering tax rises."
Cosla has been approached for comment.
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