A shock 10 per cent council tax rise for Perth and Kinross residents has been put forward to fund crucial health, social care, and education services.
SNP council leader Grant Laing said the proposal highlights the serious funding challenges facing the local authority as it tries to manage rising demands and increasing costs.
But PKC Labour councillor Alasdair Bailey insisted talk of double digit council tax rises will not be necessary if the Scottish Government makes use of UK Government funding announced in the recent Westminster budget. The Holyrood government is to set out its spending plans for 2025/26 next week.
In February this year PKC councillors voted through a 2024/25 Council Tax freeze – described by PKC Liberal Democrat councillor Peter Barrett this week as “insane” – combined with planned 4.9 per cent increases in 2025/26 and 2026/27.
PKC councillors are now to be asked to agree that planning for February’s budget meeting should be based on an assumed Council Tax rise of 10 per cent for 2025/26, and indicative rises of 10 per cent for 2026/27 and six per cent for 2027/28.
PKC pointed out that it recognises increasing demands on public services, and in particular the growing number of adults who need more complex care packages, and increases in primary school pupils with additional support needs – and by planning over three years will provide stability and predictability in budget planning, allowing more effective allocation of resources.
Councillor Laing, said: “It’s important to emphasise that next week’s decision provides a direction of travel as council officers and elected members prepare for next year’s budget.
“The final decision on Council Tax levels won’t be made until the budget is set in February.
“What this proposal does do is clearly recognise the challenges facing the council.
“The increasing demands and rising costs of providing vital services for those most in need requires a bold solution.
“At just £11.70 a month for people in a Band D property, we could raise over £10m to protect health and social care, support for children with additional support needs and invest in tackling poverty.”
PKC Labour councillor Alasdair Bailey said: “I’m hopeful that the bumper Barnett consequentials flowing from the UK Government to Holyrood as a result of the budget will be passed along by the Scottish Government to councils to support these vital services.
“If the Scottish Government takes that political choice then the burden on local council taxpayers will be much reduced and we’ll no longer need to talk about double digit percentage council tax rises.
“I’ll be watching the choices that the Scottish Government make in their budget closely ahead of PKC’s own budget and tax-setting meeting in the new year.”
And PKC Liberal Democrat leader councillor Peter Barrett added: “The council faces huge financial challenges. Chronic underfunding and real terms cuts from the SNP Scottish government and their insane council tax freeze this year have hamstrung the council and caused long term damage.
“We’ve been forced to make damaging and visible cuts to essential local services. The Liberal Democrats have been calling for a realistic council tax strategy for years.
“The Liberal Democrats are committed to protecting vital services including health and social care to support the rapidly growing needs of local people recognising that residents are still struggling to cope with the cost of living crisis.”
In February PKC councillors voted through the 2024/25 council tax freeze and subsequent 4.9 per cent increases by 22 votes to 14 with the Liberal Democrats – the only group to oppose the tax freeze – abstaining. The SNP budget was supported by the Independent, Labour and SNP groups.
PKC chief executive, Thomas Glen, said this week: “We are recommending this council tax strategy to council because it allows us to focus budget planning on protecting the services most needed by our residents and what we need to deliver these over the longer-term.”
The proposal includes increasing the percentage of income from council tax used to support the capital budget from 1% to 1.25%.
Councillor Laing added: “We introduced this initiative last year as a way of ensuring the sustainability of our capital investment strategy. “We’ve already had a lot of interest in this approach from other councils who are also wondering how to balance the increasing costs of capital projects with the need for investment in the future of their communities.
“Diverting an extra 0.25 per cent from future council tax income gives us even more confidence in the sustainability of our investment in buildings and infrastructure.”