Council tax increases by 3% across Scotland

A report has revealed that all 32 councils in Scotland increased council tax by the maximum allowable 3% in 2018/19 for the first time since the council tax freeze was lifted

In the 2017/18 budget, the Scottish government announced the end of the nine-year council tax freeze, but capped the amount councils could increase it by to 3%.

In 2017/18, 24 councils out of 32 increased their council tax, including 21 that increased rates by the maximum allowed but in 2018/19 all councils increased council tax by 3%.

As revenue funding has fallen in real terms, council tax represents an increasingly large proportion of the total funding available to councils, from 16% in 2013/14 to 18% in 2018/19.

In 2017/18, an estimated additional £110m was raised through council tax reforms, these included a change to higher rate council tax bands and an end to council tax relief on second homes.

Councils in Scotland are increasingly looking for other ways to raise income as Scottish government revenue funding to councils has reduced while demands for services are rising. Between 2013/14 and 2019/20, total revenue funding has fallen 6%.

On 28 March 2018, the Scottish government paid £34.5m of additional funding to councils. Although this was funded from government underspends and paid in 2017/18, it was shown as 2018/19 funding in the local government settlement. By recognising the £34.5m as 2018/19 funding the Scottish government showed an increase in funding to local government of 1.7% in cash terms and 0.2% in real terms compared to 2017/18.

In response to this some councils are raising income by increases charges, for example to commercial waste, while others are creating new charges, for example for garden waste or public toilets.

Auditors have previously revealed that councils had increased 11 types of charges by more than inflation between 2016/17 and 2018/19. The highest increases were in relation to burials. The cost of a burial plot increased by an average of 20 % (22 councils responded) and the cost for burial services increased by 12% (23 councils responded).

City of Edinburgh council is the first to propose a transient visitor levy or ‘tourist tax’ to raise funds to manage and promote tourism in the local area. In February 2019, the council approved plans for a £2 or 2% per room per night charge which it expects will raise up to £14.6m. It now requires legislation from the Scottish government to implement the tax.

Local government in Scotland: Challenges and performance 2019 is here.

Central government auditor's report

Guidance has also been published on 2018/19 independent auditor's reports for central government. 

The model independent auditor's reports for 2018/19 have been changed to:

  • reflect the additional wording that ISA (UK) 700 requires for public interest entities;
  • highlight that risks of material misstatement and conclusions on wider scope responsibilities are reported in the annual audit report; 
  • clarify that the Code of audit practice requires compliance with international standards on auditing; and 
  • move the 'Bannerman' paragraph to the end of the report. 

2018/19 independent auditor's reports (central government) - Technical guidance note 2019/4(CG) is here.

Report by Amy Austin

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