Scotland politics

Moray Council proposes 18% council tax rise

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Media captionMoray Council looks set to abandon the Scottish government's freeze on council tax in order to avoid cutting services

Council tax bills in Moray could rise by almost a fifth under proposals which would see the local authority become the first to break a Scotland-wide freeze.

Moray Council has confirmed that bills could rise by as much as 18% this year - which would see the bill for a Band D property increase by £204 a year.

It said the move was necessary to protect frontline services.

The proposals will be voted on by councillors next month.

Moray Council needs to cut spending by £11.9m in 2016/17.

But raising council tax rates would result in the Scottish government withholding £1.1m which would have been allocated to the council to offset the freeze, which has been in place across Scotland since 2007.

The country's 32 councils have until now complied with the policy and retained the freeze.

'More confidence'

Moray, which has an independent/Conservative administration, had been facing a financial shortfall of £6.8m for the year ahead.

But it said that figure rose to £11.9m following last month's funding allocation announcement by the Scottish government.

The council said an 18% rise would see the council tax for an average Band D property increase from £1,135 - where it has been pegged since 2007 - to £1,339.

A Band A property would go up from £756 to £892 and a Band H from £2,270 to £2,678.

The level of increase which has been proposed would raise £5m next year, with the administration group proposing to take a further £5m from reserves.

Image copyright PA
Image caption The council tax freeze was introduced by the SNP-administration in 2007

With savings of £1.9m already identified, the council said it would be able to balance its budget for 2016-17.

Council leader Stewart Cree said that there was "no way" of achieving the level of savings required by efficiencies alone.

He added: "Equally, we do not believe that the people of Moray should have to see the services and facilities that they cherish so much continue to deteriorate and that is why we have decided to consider increasing council tax to a level that would protect services both now and in the future.

"In so doing, we are aware that we will have penalties imposed on us by the Scottish government and we will forfeit the £1.1m that we are currently allocated to offset the council tax freeze.

"However in light of the scale of the deficit we are facing, this £1.1m pales into insignificance when the only alternative would be further cuts to services - or even the loss of some services altogether."

'Understand our dilemma'

Mr Cree said he had written to Scottish Finance Secretary John Swinney to outline the council's concerns.

And said he believed the people of Moray "will understand our dilemma and that they will be prepared to pay a reasonable increase in council tax in order to see their services and facilities maintained".

But the leader of the council's SNP group, Gary Coull, said the administration was "once again getting Moray in the national headlines for all the wrong reasons".

He added: "This is a massive hike being proposed by the independents and Tiories and will really hit the pockets of Moray people who are already facing high living costs combined with frozen wages".

Highland Council's independent-led administration - which needs to save about £50m next year - is also examining whether it should rebel against the council tax freeze by raising bills by 5%.

The council's budget chairman, Councillor Bill Fernie, told the Press and Journal newspaper: "We're still firming up what we're going to do and we've got to speak to opposition groups as well.

"We would certainly take more confidence if a few more councils around us - for example Moray or Argyll and Bute - were likeminded."

Fully funded

Fife Council members are also studying budget proposals, including the possibility of ending the freeze, ahead of a meeting next month.

A Scottish government spokesman said it had fully funded the council tax freeze.

He added: "Indeed recent independent research found that, compared to inflation, we have over-funded the council tax freeze by £164.9m since 2008.

"We have included a further £70m in the coming year's settlement to enable councils to fully meet the costs of a council tax freeze so there is no need for an increase in council tax."

But Cosla, which represents most Scottish councils, said the package of measures for local government within Mr Swinney's budget, including the council tax freeze, had been "totally unacceptable".

A spokesman added: "We are still in active negotiations with the Scottish government around the 2016/17 settlement."

A cross-party commission has recently been established to examine alternatives to council tax and is due to report in autumn 2015, after the Holyrood election in May.

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