COUNCIL tax will go up by three per cent in April if proposals by the joint SNP / Labour administration are passed as expected on Thursday.

Elected members will set the local authority’s budgets for 2022/23 and councillors will almost certainly take the opportunity afforded to them by the Scottish Government to go for the increase.

A three per cent rise would take the average Band D bill to £1,319, with the anticipated council tax hike likely to bring in just over £5.2 million.

Council house rents and charges are also likely to be raised by 2.5 per cent. 

The devil will be in the detail, as ever, although a report to councillors by executive director Eileen Rowand suggests there should be little need for any cuts as there is actually a non-recurring budget surplus of £3.7m in 2022/23.

However, the picture for future years is of concern, with Fife Council likely to have to find £16.9m to plug an expected budget gap by 2023/24 – rising to £29.3m the following year.

“In setting the budget for 2022/23 it is important that members have regard to the implications of any decisions on future years’ budgets,” she stated. 

“Whilst the council currently holds a high level of balances, the council also faces an unprecedented degree of financial uncertainty and risk. 

“Balances are held to cover one-off shocks or risks and are not a sustainable means of closing the future budget gap. 

“A combination of high and rising inflation combined with potential reductions in core funding going forward provides a significant challenge to the future financial sustainability of the council. 

“The council’s ability to take decisions to respond to these challenges is limited with the protection of a large part of council resources as a result of policy decisions made by the Scottish Government. 

“In recognition of this risk, an updated budget gap for future years will be presented to members later in the financial year, following publication and analysis of Scottish Government’s Medium Term Financial Strategy.”

With that in mind, the SNP / Labour administration is being asked to approve a commitment from balances of £10m to support necessary transformational change, and £18m to support increased demographic, pay and pension costs.

The latter is important because while the local government’s pay settlement will be agreed in separate negotiations between COSLA and trade unions, the current policy would lead to an increase of around 2.2 per cent of the overall pay budget.

However, there is little room for manoeuvre, and even a one per cent higher-than-expected pay settlement would increase the council’s estimated budget gap by around £5.5m per year. 

The same is true for the core Scottish Government grant which, if reduced by more than the one per cent currently assumed, would further increase the gap by around £7.5m a year.

“The overall impact of both a one per cent increase in pay beyond that provided for, and a one per cent reduction in government grant would increase the budget gap from £29.3m to around £42m in 2024-25,” Ms Rowand confirmed.

“However, there are likely to be some corporate solutions that will assist in mitigating some of this heightened risk.”

All of the key decisions will be taken today, when all of the council’s political groups will be able to table their own budget propositions.