West Lothian households will likely face a 3.5 per cent increase in council tax next year - and for the rest of this council’s administration
Anything less would have a huge impact on local authority spending, the council’s director of finance told a meeting of the corporate policy and resources policy development and scrutiny panel (PDSP) today.
The likely increase for next year’s budget comes after Westminster stepped in with a national rebate for council tax for this year.
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Director of finance, Donald Forrest, told the PDSP the budget model for the next financial year takes account of 900 new homes being built to add to the council income. “It should be noted that any option to increase council tax by less than 3.5% would have an adverse impact on the already hugely challenging recurring budget position,” said Mr Forrest in his report to the PDSP.
The Scottish average band D council tax is £1,347 compared with the West Lothian 2022 to 2023 band D rate of £1,314.71. West Lothian Council has the 10th lowest council tax band D rate in Scotland.
From 2017 to 2018 to 2022 to 2023 the average band D council tax rate for Scotland has increased from £1,173 to £1,347, an increase of £174 (14.8 per cent) or 67p per week for five years. West Lothian’s band D rate has increased by £186.71 (16.6 per cent) or 72p per week over the same period.
In England the Band D council tax is in excess of £1,900.
The report added: “The annual survey of hours and earnings for 2022 will be published later in the year. The average full-time weekly wage in Scotland increased by 5.1% between 2020 and 2021, resulting in individuals having an average weekly increase of £30.20, increasing from £592.20 per week to £622.40 per week.”
Mr Forrest outlined a series of mitigations in place to help those facing financial difficulties.
Across West Lothian 75 per cent of properties are in bands A to D. Of those 48 per cent are in receipt of a form of discount or exemption.
The Council Tax Reduction Scheme is in place to help those on a low income pay all or part of their council tax- covers 16 per cent of Band A to D properties.
Single person households with net income of up to £16,750, and all other households with net income of up to £25,000, with less than £16,000 in savings are eligible to apply for assistance through the scheme.
A disabled person reduction is also available, which sees council tax charged at the band immediately below the band the property is in. For band A properties this equates to a 1/9th reduction.
In terms of the projected future budget model, it was based on a 3.5 per cent increase in each of the coming five years.
A report on the budget model was considered by council executive in October 2021 and council in February 2022. It was updated and reported to council executive on June 21, 2022.
This includes key aspects of expenditure and income, including staffing, demographics, revenue consequences of capital, service pressures and developments, inflation and indexation, council tax income and grant funding.
The council tax assumptions in this budget model are an increase of 3.5 per cent per annum from 2023 to 2024 to 2027 to 2028, which over the five-year period would see council tax generating an income of £22.224 million.
Due to various volatility around energy and pay pressures the estimated budget gap has increased since the report in June and now stands at £47.1 million over the five years.
Mr Forrest added: “In this massively challenging financial situation council tax can play an important part in helping to balance the budget.”
SNP group leader Councillor Janet Campbell asked if freezes, as implemented in previous years, would put more money in the pockets of council taxpayers. She said: “Could we agree this would be welcome in these troubled times?”
Mr Forrest replied: “As with all decisions, there are various trade-offs to be made. Clearly freezing council tax does provide help for those who pay council tax but it does also potentially reduce the level of income coming into the public sector.”
He added: “The freeze does mean there was less income into the public sector as a whole, which does therefore exacerbate the financial challenges faced by the public sector. So it’s matter for politicians how they want to achieve that balance between levels of taxation and levels of public service.”
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