Perth and Kinross councillors have voted to support a financial strategy which would see council tax increase by 10 per cent in 2025/26 and 2026/27 and six per cent in 2027/28.
As councillors approved the controversial decision on Wednesday, SNP council leader Grant Laing said it would “end the annual cycle of death by a thousand cuts”.
Later that same day, Finance secretary Shona Robison said “there is no reason for big increases in council tax next year” as she announced record funding to Scotland’s councils as part of the Scottish Government budget.
Perth and Kinross Council’s radical council tax strategy was voted through by 22 votes to 15 as councillors met on Wednesday, December 4 to set the local authority’s medium-term financial plan.
Councillors were asked to endorse a three-year indicative council tax strategy which would see council tax increase by 10 per cent in 2025/26, 10 per cent in 2026/27 and six per cent in 2027/28.
The change would see residents living in a Band D property, pay an extra £11.70 a month from April 2025.
The plan would also earmark a further 0.25 per cent of council tax income each and every year to support the council’s capital budget.
The latter was supported by all councillors. However the Conservative group tabled an amendment rejecting the three-year strategy.
Conservative leader John Duff deemed the three-year indicative council tax strategy “premature and comes on the day of the Scottish Budget which is being delivered as we speak”.
Councillors were being asked to make a decision before knowing the outcome of the Scottish Budget which was being delivered on the same day.
Cllr Duff said: “Until such times as we know the outcome of the Scottish Government budget and the contents of the local government finance circular, this council should refrain from making this change to its council tax strategy.”
His amendment to reject the strategy was seconded by fellow Conservative Bailie Chris Ahern.
Independent councillor Dave Cuthbert questioned why councillors were being asked to agree a medium-term financial plan without knowing the “full position” of the Scottish Government’s budget.
PKC’s chief finance officer Scott Walker said: “This is the council date for which the council’s medium-term financial plan was scheduled to come through. Our medium-term financial plan is already late. This was the only opportunity to bring this before council.”
The 10 per cent council tax increase strategy was voted through by 22 votes to 15. It was supported by Perth and Kinross Council’s SNP group, three Lib Dems and two Independents.
It was rejected by the Conservative group, two Lib Dems and two Independents.
Moving the strategy for approval SNP council leader Grant Laing said: “This council has already taken hard decisions which, back in February, meant we had a balanced three-year revenue budget.
“However, members of the Finance and Resources Committee are fully aware of the factors that mean that we are no longer balanced.
“There are huge challenges facing the Health and Social Care Partnership in terms of the cost of care, increasing demand and the complexity of the care being provided. We are also aware of the challenges in supporting young people with additional support needs and to our number one priority of tackling poverty.
“All of which mean that we are looking – despite the decisions we took which were horrendous decisions on the whole last February – for many more millions of pounds of budget cuts to balance our budget this year.
“The agreement of this council tax strategy can end the annual cycle of death by a thousand cuts.”
Cllr Laing added: “I fully appreciate that the council tax increases set out are indicative and that we will all get a chance to confirm or change them in February.”
He said supporting the strategy would “maintain front-line services that our citizens and communities want and need, protect our capital budget so it won’t be up to our children and grandchildren to pick up the costs of undecisions we’ve made and put the council on a more sustainable financial footing”.
Seconding it for approval deputy leader Eric Drysdale said: “We need to grasp the mettle here and try to avoid further cuts to core services in order to achieve a balanced budget.”
SNP councillor Stewart Donaldson hit out at the UK Labour government’s decision to increase employers’ National Insurance contributions.
He said: “The Labour UK Government has really effectively introduced a very severe payroll tax that impacts the lower paid.”
Liberal Democrat councillor Willie Robertson said there was “no way” he would vote “to make people poorer”.
The Kinross-shire councillor said: “There is no way that I will vote for a 10 per cent increase.”
He added: “I’d be happy to vote for a 10 per cent increase in council tax if everyone was getting a 10 per cent increase in their wages but that’s not the case – and that’s this year and next year. I’m not going to vote to make people poorer.”
However the Lib Dem group’s leader pointed a finger of blame at years of “damaging” council tax freezes “at the same time as wages and inflation were going up”.
Cllr Peter Barrett – who voted to support the council tax strategy – said: “We have suffered for too long from misplaced party loyalty in support for a decade of council tax freezes from the SNP in this chamber combined with Conservative short-termist expedient low council tax approach and the double whammy of austerity programmes from both the previous UK Government and the current Scottish Government all of which has starved this council of the revenue it needs to deliver the services and facilities communities need and expect.”
Councillors will meet in February 2025 to agree the final three-year revenue and capital budgets for Perth and Kinross Council. The recommendations put before councillors at next February’s meeting will be based on the strategy voted through by councillors today.
Following the meeting details of the Scottish Government budget emerged. There will be no council tax freeze. Finance secretary Shona Robison said “it will be for councils to make their own decisions with record funding, there is no reason for big increases in council tax next year”.