How will 7% rise in Highland Council Tax hit your pocket? We look at the figures as top councillors recognise ‘people are under severe financial pressure’

Local authorities across Scotland are all going for inflation-busting rises in Council Tax as the government-imposed freeze comes to an end in April.

Highland Council set out its plan to raise Council Tax by seven per cent this year as we reported back in December and that is one of the lowest rates in Scotland.

Residents of Orkney could face a 15 per cent hike, Moray backed a 10 per cent rise as did Shetland, North Lanarkshire, and the Scottish Borders, the list goes on.

• Highland Council set for 7% council tax hike in £818m draft budget and £21.5m investment in teachers, social care, public transport and renewables

In fact these plans have been long foreshadowed as the council umbrella organisation Cosla and the Scottish Government recognised caps and freezes no longer worked.

And so will the rises – Highland Council doesn’t just want to raise it by seven per cent this year but also by the same number next year and the year after that too.

The rise is a 5+2 measure: five per cent to sustain council services and break even and two per cent to borrow to fund new schools, housing and infrastructure.

But due to the sudden nature of the rise, one parallel is the cost of living crisis when inflation peaked at 11.2 per cent – but even that didn’t rise so quickly.

And that parallel hits a little too close for comfort – also in April the Ofgem will increase the energy price cap by 6.4 per cent and inflation is on the rise.

That means a household using a typical amount of gas and electricity will see their annual bill rise by £111 a year to £1849.

A Band D Council Tax property is often used to illustrate costs as it sits right in the middle of the other bands, it will see its bill rise by £99.90 to £1527.

If you accept that as an example of an “average” household using an “typical” amount of energy from April then the cost £3376 a year before you step outside.

By 2027/28 the Disability Band Relief will rise to £971.32 while at the top end Band H will hit £4,283.51 – and Band D in the middle will potentially be charged £1,748.37.

The two top-ranked administration councillors – leader Raymond Bremner and convener Bill Lobban – are well aware of the pressures on households but how do they account for such a steep hike?

Convener Bill Lobban was very clear in saying people will get their money’s worth in terms of infrastructure.

“I think there is no doubt about it that wherever you look all across the country some people are under severe financial pressure when it comes to the stage where you have to invest in your own people,” he said.

“So we made a five percent Council Tax increase, basically to cover our entire range of services and then we've taken a further two percent to invest in stuff that people have really been telling us, for a long time, they went to see investment, they want to see investment in their schools, and their roads, and school building.

“So there comes a time where you just have to stick your head above the parapet and you have to make those decisions. If you look at what's coming forward from some other parts of the country, some of the rises, we see that our increases are based on financial prudence.

“It means that we can take these steps that will actually improve the lives of people in the Highlands rather than just treading water and seeing the bills going up and up and up.

He added: “What they're actually seeing is they're getting something back for their money and it is their money.”

Cllr Bremner argued, with real justification, that under-pressure councils have been given a mountain to climb due to Labour’s unsupported hike in National Insurance contributions.

“One of the issues I know we’ve been facing, like all the local authorities, is the UK government's National Insurance Contributions. The Scottish Government has funded that to about 60 percent.

“But we've had to fill the gap in light of the UK government not coming forward with any further mitigation, we've avoided passing that onto the communities in the Highlands”.

He also said the past was catching up on the council’s finances: “Of the past 18 years, in nine of those years there was a council tax freeze, albeit funded to an extent from government, in five of those years, it was capped at three per cent.

“It's only in two of those years – last year and this year up five, plus the two but of all the previous years with the exception of that two, there were other avenues of funding that were available to councils from government to be able to support investment in a capital investment.

“So here we are 18 years of council tax freezes or being capped”.

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