Council tax increase possible, warns leader
A DECISION will be made on whether to raise council tax in Dumfries and Galloway by three per cent when the council meets later this month.
The Scottish government has already ruled that council tax in Bands E to H will pay more from April 1. The government introduced legislation to change the tax so there is no local discretion to change these multipliers. The change will raise £2.4m which can be offset against the council's £16m funding gap.
The government set increases of 1.6 per cent in domestic water and wastewater charges for 2017/18 and, again, councils have no say. The income goes to Scottish Water not the council.
Councils have discretion to apply up to a maximum three per cent increase on the council tax base after a freeze in council tax since 2008.
The council approves its 2017/18 budget on February 28. The region has had the lowest council tax rate in mainland Scotland since 2008 and it is 10 per cent lower than the average.
Councillor Ronnie Nicholson said: “The change in law made by the government will mean a rise for people living in Band E to H houses. Although it is a council tax rise, the council has no say on it.
"What will annoy some people is the fact that, despite this rise, cuts will still have to be made to balance the books because of a massive reduction in government funding.
"This change will raise £2.4m but the funding gap we need to fill is £16m. It is ironic that the government won’t use its own new tax-raising powers to increase income tax but is imposing a tax rise through councils, presumably because it wants us rather than itself to be blamed.”
Councillor Nicholson also warned that a business rates review by the government could mean rates will rise for some companies in the area, particularly those in tourism.
A rates revaluation is being undertaken by the Scottish Assessors Association which will reassess how much organisations pay in non-domestic rates from April 1. It is likely to lead to an increase in rates.
Councillor Nicholson said: “In some parts of Scotland some businesses, particularly hotels, restaurants and B&Bs, face steep increases and that is a worry.
"We'll be watching the outcome carefully and if we can assist either through lobbying the government or looking at our rates relief scheme, we will definitely do that.”
The council faces making cuts of £16m for 2017/18.
Councillor Nicholson said: “This will have to be found through cuts to services and possibly higher council tax. With 58 per cent of the budget spent on paying for staff, it is inevitable that the workforce will be reduced.
"It has already fallen by 1,100 since 2007 and it will be impossible to prevent it from falling next year.
“Parliament won't agree the government’s budget until about a week before we set our budget but we need to assume that these cuts will go ahead and complete the preparation of proposals to fill the £16m funding gap.”
South Scotland MSP Colin Smyth criticised the proposed cuts which he voted against in parliament two weeks ago. He took part in the budget debate and argued that the government should increase income tax, including raising the top rate of tax to 50p in the pound for those earning above £150,000.
He said: “The parliament now has control of tax-raising powers. It is shocking that the SNP government won’t use them and stop the cuts to services like education and care of the elderly.”