Residents in Fife could face a 5% council tax and rent rise next year.
The council’s minority Labour administration – led by Councillor David Ross – is putting forward the proposals in an effort to plug a financial black hole of £11.5 million.
It would mean those living in band D properties would pay £1,385 in 2023/24, an increase of £65.96 on this year’s rates, with other bands rising in proportion to this.
Efforts to raise £9m for council coffers
The plans need the support of some councillors from other parties but if approved, it is estimated the new council tax rates would bring an additional £9m into the council’s coffers.
Labour says this would allow it to avoid service cuts – with the remaining cash made up from uncommitted funds and £2m in teacher funding provided by the Scottish Government.
But the opposition SNP group instead wants council tax bills to go up by 3%.
Meanwhile, a proposed rent rise put forward by Labour would see average weekly costs go up by £3.92 to £82.41.
Council tenants had been consulted on proposed rent rises of between 0 and 3%, with the majority who responded backing a 0% increase.
But council chiefs say that since this consultation, funding pressures have increased by nearly £4m.
The SNP wants to limit the rise to 3%.
Why is a council tax rise needed?
The Labour group says the council tax and rent increases are being forced on the council due to “underfunding” by the Scottish Government.
Its proposal says: “Fife Council is once again faced with making cuts to vital local services and raising council tax over the next three years as a result of underfunding by the Scottish Government.
“This follows more than a decade of cuts to council budgets by the Scottish
Government along with restrictions on council tax and ringfencing of spending.”
Opposition SNP group leader David Alexander says he cannot see the justification for a 5% council tax rise.
He said: “There’s no requirement at all for 5% when right now there is a cost-of-living crisis.
“We have balanced the books with 3%. There’s no justification for the 5%. Next year, if the books aren’t balancing, there may be a case for it.”
The SNP’s 3% rise would bring in £5.4m while the party would also draw on the entire reserve budget to make up the shortfall.
Will the proposals be voted through?
The political make-up of Fife Council requires parties to join forces to vote proposals through.
- For the Labour proposals (5% council tax and rent rise) to go through, it needs to win the support of 18 other councillors from across the Conservative and Lib Dem groups.
- For the SNP plans (3% council tax and rent rise) to go ahead, it needs the support of just four councillors from either the Lib Dems or Conservatives.
The Lib Dem and Conservative groups have not confirmed their voting plans yet, but have indicated they will not support the SNP.
Lib Dem group leader Jonny Tepp has called the SNP plans “surprisingly regressive”.
Scottish Govt says council budgets protected
The Scottish Government insists its funding settlement has protected council budgets.
A spokeswoman says it provided more than £13.2 billion in funding across the country for 2023/24.
She said: “This represents a cash increase of over £550m, or 4.5%, which is a real-terms increase of £160.6m, or 1.3%.”
Tayside’s three councils will set their budgets in the coming days – with a similar rent rise of 4.1% proposed in Angus.
Fife councillors will vote on the budget at a meeting on February 23.
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