IN the coming days councils across Scotland are expected to vote for hefty rises in council tax.
Some of the larger authorities, like Glasgow and Edinburgh, have announced bumper double figure hikes already with others due to follow suit.
But why are Scots being hammered with the increases and what does it mean for services?
Today Professor Mairi Spowage, from Strathclyde University’s Fraser of Allander Institute, explains why councils are still struggling despite the planned hike – and why the tax must be reformed.
- Check our map to see how your council tax could rise
IN the news in recent days have been announcements by councils all over Scotland of council tax rises for the coming financial year.
Some councils, including East Lothian and the Scottish Borders, have confirmed double digit 10 per cent rises, with more expected to follow suit in the coming days.
Far from being additional investment that the councils can use to bolster or improve existing services, many councils are putting these increases in place to ensure that existing services can survive.
Indeed, in many areas it may well be that citizens see their services scaled back as bills go up, due to the increased costs of delivering services and the extra demand on statutory services like social care.
The Scottish Government, for its part, has said that local government has been given a record amount of funding for 2025-26 in the most recent budget. Specifically, the Finance Secretary said that, in the light of this, there should be no need for local government to implement large increases in council tax.
Let’s leave aside the reaction from the Scottish Government if the UK Government was to say something similar about the taxes within the control of the Scottish Parliament – council tax is a local tax and the level is for councils to set out.
The Scottish Government has put in place council tax freezes for 11 of the last 15 years by making a pot of money available to councils conditional on them agreeing to freeze the tax.
The Scottish Government claims that this covers the cost of the freeze, but it is not only the annual increase that councils have missed out on, it is also the compounded effect of the freeze over time.
Some key figures tell the story of what has happened to council tax and local government funding in recent years.
Several years of Council Tax freezes have eroded the value of the council tax collected by local authorities. The average amount of council tax per household was £980 in 2007-08; if this had simply increased by the rate of inflation since then, it would have been £1,494 per year by 2024-25, compared to the actual figure of £1,310, some 14 per cent lower. So the purchasing power of this tax has fallen over the years.
Given that council tax has been roughly 20 per cent of local government budgets for the last decade, this underlines the reduction of purchasing power in the local government budget overall.
The priority of local government in the Scottish Budget has also changed, although we should recognise that this has happened at the same time that the powers of the Scottish Government has changed.
In 2015-16, local government made up 29 per cent of the Scottish budget, compared to 24 per cent by 2023-24.
Given the additional responsibilities being given to local government (including ring-fencing of funding for e.g. early years provision), and increasing demand for their services in the face of this reduced purchasing power, it seems inevitable – despite (as described by COSLA) a “better” funding settlement from the Scottish Government this year – that councils would be seeking to increase the revenue they are raising from council tax.
Check if you can claim a council tax refund
Over three million households are owed a combined total of £544million in council tax refunds, according to a Sun investigation last month.
The average refund due is around £178, but some could be owed as much as £3,659.
Sun Money submitted a Freedom of Information Request to all 349 local authorities in England, Scotland and Wales to find out just how much taxpayer money our councils are sitting on.
You can check to see how much cash your local authority might be sitting on by searching for your council in our tool.
It’s surprisingly easy to overpay your council tax, and millions of us do.
One of the main reasons is moving house.
Council tax is usually billed annually, from April to April, but paid in instalments.
This means you’re always paying some of it in advance.
Therefore, if you move out before the year’s end, you’ll likely be due a refund for the remaining months.
Another reason for over payments is a change in your property’s council tax band.
If the band is lowered, you’re due a refund for the over payments made at the higher rate.
Finally, forgetting to cancel your direct debit after moving out can lead to continued payments and further over payments.
Finding out if you’re owed a council tax refund is easier than you think.
Many councils have online claim forms available on their website
To find your local council’s site, visit gov.uk/find-local-council.
While some forms can be lengthy, claiming online is often the quickest way to get your money back.
If you’ve recently moved, you’ll likely need your old council tax reference number, which you can find on a previous bill.
If your council doesn’t have an online form, or if the form seems too daunting, you can contact them directly by phone, email, or live chat.
The Accounts Commission recently set out the dire state of local authority finances, with many breaking even in the most recent year by dipping into reserves. This situation was unlikely to be sustainable.
The focus today and for the next few weeks will be on the rises imposed by individual councils and everyone waiting for the new council tax bills to hit their doormat.
But, as we discuss council tax, let’s not forget about the outdated nature of the tax calculations and how it must be reformed to make it more fair.
Whichever rates and bands are used for such a tax, it is completely unacceptable that more than half of households are in the wrong band due to the outdated valuations that are used (from 1991).
We would and should not accept that we were paying the wrong amount of income tax because the government had our wages wrong.
Perhaps the tax increasing in amount will also spur politicians into action to actually revalue the taxbase and ensure people are paying the correct amounts.
Sure – there will be winners and losers – but let’s remember as many people will be paying too much tax as too little.
