By Steve Bargeton, political editor

FIRST MINISTER Jack McConnell challenged council chiefs who yesterday set above inflation local tax rises to explain themselves to voters.

And in what some saw as a thinly veiled threat, he said the “time was fast approaching” for a wholesale shake-up of local government.

With local authorities across Scotland yesterday setting council tax rates—the majority above inflation—the subject dominated First Minister’s Question Time.

Bills in Scotland will go up by an average of 3.3% from April—above the 2.5% target set by the Executive.

The rise in Perth and Kinross is 4.4%, with the Band D council tax going up to £1136, an increase of £48 a year.

Challenged by SNP deputy leader Nicola Sturgeon to “apologise to the people of Scotland” for what she claimed was a broken promise by Mr McConnell that this year’s increases would not exceed 2.5%, the First Minister said it was for council chiefs to do some explaining.

“The reality is that some local authorities have indeed managed to ensure their council tax increase is below 2.5%,” he told MSPs.

“Others are far above that. For that, they have to answer.

“And the question the people of Scotland will be asking is—if some can do it, why can’t you?

“And I think they deserve an answer.”

Ms Sturgeon pointed out that most councils would increase their tax by well over the rate of inflation.

“Whatever the First Minister might say, most people today are facing cuts and council tax rises. For Labour today, it is a case of nine in a row—nine inflation-busting council tax hikes since Labour took office.”

Scottish Tory leader Annabel Goldie told the First Minister that while the Executive and local authorities engaged in a “public squabble” over funding services, council tax payers struggled to pay their bills.

She said, “It is precisely this sterile blame game which the public finds so infuriating. While the squabble rages, the public pays. After nearly seven years of devolution the time is overdue for a reappraisal of the role, the function and the accountability of local government.”

It was then that Mr McConnell dropped a heavy hint that council reform was in the pipeline.

“I think that time may be fast approaching but I also think that it is important to take a stand on the issues of today,” he said.

John Pentland, finance spokesman for the Convention of Scottish Local Authorities (CoSLA), said the low increases were an example of good management on the part of local authorities.

“Local government has done all that it can to dampen down council tax rises, but due to general underfunding from the Executive, Scotland’s council tax payers today face a lose-lose situation,” he said.