Councils reject ScotGov ultimatum to agree tax freeze or lose funds

The Herald can reveal that of the 32 councils, just two have indicated some kind of compliance.

The SNP-controlled Glasgow City Council, which is due to get £13.6m as its share of the pot has given a heavily conditional indication of compliance.

And Perth and Kinross, which is currently led by a minority SNP administration, said its leader Grant Laing intends to tell the Scottish Government that it is his intention to present a a budget to that includes a council tax freeze, but that it is subject to final local authority decision due on February 28. It is due to get £4.7m from its share of the funding.

Seventeen councils have definitively told the Herald they have not given ministers notification of any intention to have a council tax freeze.

READ MORE: Revealed: Scotland's £1.3bn council tax debt mountain 

As of Wednesday, none have so far formally agreed on any council tax freeze as they are still to discuss proposals at budget meetings.

Two councils - Glasgow and North Lanarkshire - are expected to hold budget meetings today (Thursday).

Some councils are not expected to have the meetings till March. They are Aberdeen (March 6), West Dunbartonshire (March 6) and Inverclyde (end of March), while Clackmannanshire have still to confirm their schedule.

The Convention of Scottish Local Authorities (COSLA) has told Ms Robison in a letter that compliance with the council tax freeze in the timescale "will not be possible" as only a few councils were expected to have agreed their budgets prior to that date "and leaders cannot pre-empt the outcome of any consultations currently underway with their electorate, nor the decision of full councils on proposed budgets".

The Scottish Government has been accused of breaching the terms of the Verity House Agreement signed off in June 2023 over how local and Scottish Government would work together and states that there should be a "positive working relationship" based on mutual trust and respect, recognising the need for effective and responsible joint leadership as we work on our shared priorities".

It comes as it emerged council leaders have called for an urgent meeting with the First Minister, saying they are in "fundamental dispute" over local authority funding.

The Verity House Agreement states that the powers held by local authorities "shall normally be full and exclusive" and adds: "They may not be undermined or limited by another, central or regional, authority except as provided for by the law."

And it states: "Where we disagree, we will seek to deal with these matters constructively in the spirit of cooperation..."

The ultimatum comes in a letter to councils from the deputy first minister and finance secretary Shona Robison and dated February 2.

While setting out how the £144m will be distributed she warns: "Any council not agreeing to freeze their council tax will not receive their share of this funding."

READ MORE: 'Appalling': ScotGov rent curbs fail to prevent new record bill rises

And she adds: "I will require confirmation from each council by no later than February 16 from each council of their intention to freeze their council tax to inform our approach to stage 2 of the Scottish budget process on February 20. I recognise that your final processes towards this are subject to the decision-making process within the council.

Labour councillor Stephen McCabe, the leader of Inverclyde Council said: "The implied threat of withdrawing funding unless she receives a response is of course a breach of the spirit of the Verity House Agreement.

"She was trying to bully councils into signing up for the freeze so that she could tell Parliament on February 20 she has agreement from all 32 Councils to a freeze. Individual councils and COSLA have rightly rejected her request.

"Council leaders have no authority to commit their councils to a council tax freeze in advance of a decision by the full council."

He said that the Verity House agreement was "dead in the water" and that the council tax freeze was not fully funded by the Scottish government. 

A local authority union official said the Scottish Government's "unbelievable demand" was "indicative of the fractured relationship that exists" between ministers and councils.

The official said: "That agreement is not worth the paper it is written on as far as I am concerned and everyone needs to get round the table and set down the clear parameters of what is and is not acceptable."

The councils who have definitively stated that they have not complied with Ms Robison's ultimatum are Scottish Borders, Fife, Falkirk, Aberdeen, Moray, East Dunbartonshire, South Ayrshire, South Lanarkshire, West Lothian, Inverclyde, North Lanarkshire, City of Edinburgh, Midlothian, Comhairle nan Eilean Siar, Argyll and Bute,, Aberdeenshire and North Ayrshire.

Five councils refused to discuss whether there would be any compliance, others failed to respond.

COSLA has raised concerns around the "extremely disappointing tone and content of the letters" from members of the cabinet.

Last week, COSLA agreed the council tax freeze should be on a “voluntary basis” and that the £147 million earmarked by the Scottish Government for this purpose should be distributed to all councils with flexibility to raise council tax by up to 5%.

Ms Robison's letter earlier stated: "I have noted the position agreed [with] COSLA leaders in respect of the council tax freeze. As we have discussed, the Scottish Government have allocated £144 million to deliver that freeze, and we acknowledge it will be for each council to decide whether or not it will accept the funding and freeze their council tax providing much needed support to households in their communities."

First Minister Humza Yousaf announced a council tax freeze at the SNP party conference last October without consulting council leaders – a move COSLA described as having caused “real anger” among members at the time.

Last week, council leaders said they have been unable to set budgets for the year ahead because of uncertainty from the Scottish Government over additional funding from the UK Government.

Leaders across Scotland’s 32 local authorities met on Friday to call for a meeting with deputy first minister Shona Robison about the budget settlement for local government, highlighting the “dire consequences” of the Government’s current spending plans on communities.

COSLA leaders said a meeting with Ms Robison was an “urgent priority”.

A Glasgow City Council source said: "The leadership of the council may well have indicated to their colleagues in Government that a freeze is the intention of the SNP group; but it is a minority administration so they can’t formally do that on behalf of the council.

"As things stand, another group could propose a rise – and, if that gets the majority of votes, that’s what will happen. I don’t think that is likely to happen – but, formally, we can’t assume a decision until we know it has the votes."

Ms Robison said: “We have provided £147 million to councils to fund a council tax freeze equivalent to 5%, to help households when the cost-of-living crisis is still there, bills are high, and it is an area people can have certainty over that the bills are not going to rise.

“We’ve also provided £145 million to maintain teacher numbers and, of course, we know to close the poverty related attainment gap and to improve education, teachers are an important part of that.

“So, we believe these elements of funding are important.

“But, ultimately, it is for councils to decide but they can’t then have the money for those purposes if they decide to do otherwise.”

A Scottish Government spokesman said: “The Deputy First Minister wrote to councils to ask for confirmation of their intentions on the council tax freeze by February 16 to inform Stage 2 of the Scottish Budget.

“Ministers recognise that by that date, councils may still be finalising their council tax intentions and those will be subject to confirmation at council budget meetings in February and March.”