Council tax costs in Scotland will hit record levels next month after local authorities agreed to raise rates by up to 15%, with some planning new levies on tourists and cruise ships.
All of Scotland’s 32 local authorities have announced council tax increases from April of at least 6%, with the majority raising them by about 10%, after years of successive cuts to their grant funding.
Bills for people living in Falkirk will rise by 15.6% at the start of next month, taking their band D rate to £1,576.77, while islanders on Orkney face a 15% increase. Water bills in Scotland will rise too from April, by 9.9%, although 50% of households receive discounts.
The Accounts Commission, a spending watchdog, warned earlier this year that Scottish local authorities faced “severe financial pressures” because of government funding shortfalls that forced them to borrow more and eat into their reserves.
The Scottish government has offered councils £1bn extra this year, but councils argue that remains insufficient.
The councillor Laura Murtagh, who pushed through Falkirk’s increase to bridge a £33m budget gap, said she felt “physically ill to the pit of my stomach where we are having to make these impossible decisions”.
Councils also cite the rising costs of Scotland’s above-inflation public sector pay awards, the £100m cost of the Treasury’s decision to increase employer national insurance contributions and the increasing costs of inflation and energy.
Figures compiled by the BBC show rates will rise by 7.5% in Glasgow; by 8% in councils such as Edinburgh, East Ayrshire and Dundee; by 10% in Aberdeenshire, East Lothian, Scottish Borders and Shetland; and by 11% to 13% in Angus and Clackmannanshire.
Advice Direct Scotland, which runs the moneyadvice.scot debt advisory service, said these increases will push more households into “heartbreaking” financial distress.
It has been supporting approximately 2,000 people a month with council tax debts, generally of about £2,000 to £3,000. In one extreme case, a client had clocked up a debt of £15,000.
John Baird, the head of debt services with Advice Direct Scotland, said: “The looming council tax increases will heap even more pressure on individuals and families who are already struggling with rising energy bills and the cost-of-living crisis.”
Several coastal councils, including Orkney and Edinburgh, are also keen to introduce a new £5 per capita levy on cruise ship passengers, after a Scottish government consultation opened earlier this month.
Aberdeen council recently became the latest to join Edinburgh in pressing ahead with plans for a visitor levy on accommodation, to raise extra revenue.
Council taxes in Scotland have been kept artificially low by the Scottish government’s previous decisions to impose a nationwide council tax freeze or to cap annual increases, which ministers have partly funded by raising central government grants.
Humza Yousaf, the former first minister, imposed a council tax freeze in October 2023 in an ill-fated attempt to attract voters after the Scottish National party’s heavy defeat to Labour in the Rutherglen and Hamilton West byelection.
That led to a confrontation with Inverclyde council, which voted to raise its council tax by 8.2% last year. Ministers threatened to cut its grant; it backed down after the government gave it an extra £2.9m.
Yousaf’s gambit failed to prevent a rout in the 2024 general election, when the SNP lost 35 seats to Labour.
