Council tax could rise by more than 3% in Falkirk
Falkirk Council could raise council tax by more than 3% to plug a £29 Million funding gap
Last updated 9th Feb 2022
Falkirk Council could raise council tax by more than 3 per cent to help fill a £29 Million budget gap.
Chief finance officer Bryan Smail made the admission yesterday (Tuesday February 8th).
He said the district has lost out on millions in recent years due to having one of the lowest levels of council tax in mainland Scotland.
The Scottish Government have had a long standing freeze on council tax, which have proven a headache for Falkirk Council, as the policy came in at a time where they were already keeping the tax low.
That has left it with an income that is £4 million lower than the Scottish average every year – nearly £3 million less than neighbouring West Lothian and nearly £7 million less than Stirling Council.
This year councils will be allowed to set their own rate, but an extra £120 million has been allocated to local authorities with the expectation it'll help keep "inflation-busting" rises down.
However, with inflation currently sitting at 5 per cent – and set to rise further – that still gives the council some leeway should it choose to use it.
Initially, the budget figures had assumed there would be a 3 per cent council tax rise.
But a disappointing budget settlement this year left all councils, including Falkirk, struggling to make ends meet as the grant from the Scottish Government will not cover the cost of recent pay rises for staff as well as general inflation.
In addition, the council has not been given the £2 million it needs to fund a rise in National Insurance payments or the estimated £2 million it will need for rising energy costs.
Mr Smail’s clear message to councillors was that there are three options open to them – and it is highly probable that a mixture of all three will be needed when they make their final decision.
The most difficult options will be reducing expenditure – which would almost certainly mean job losses – or increasing income, which would mean raising council tax by more than 3 per cent.
The third option, using reserves, would buy them some time but would leave them facing the same headache next year.
Mr Smail also made clear that the picture does not look any better for the years ahead – indeed, this year should have been the most positive as the UK government’s three-year block grant gave more cash this year than it will in the following two.
Councillors will not make their final decision until the budget-setting meeting on March 2.