Council tax increases should be limited to a “minimum” next year, Finance Secretary Shona Robison has said.

His government is plans to end the freeze on local authority levies from April.

Robison said a proposed £1 billion increase in council funding should prevent them from introducing “significant” tax rises.

Ahead of budget, the council body, Cosla, warned that increases may be needed to protect “vital services.”

He is yet to release a full response to the government’s spending plans, with council leaders due to meet on Friday.

“Reasonable results”

Council tax is set, administered and spent by local authorities. The government has already offered them a financial incentive to comply with a cap or freeze.

Robison said Hello Scotland from BBC Radio programme: “The deal we are giving to local governments, I think, will mean that they will not have to increase council tax sharply. »

She added: “I don’t think there is any administration, whatever its political colour, that will want to look citizens in the eye, given this regulation, and increase council tax beyond this which is required.

“And I am confident that these discussions will lead to a reasonable outcome.”

Funding for local authorities will exceed £15 billion for the first time under the government’s budget plan.

Robison said this would include £289m of discretionary funding not ring-fenced in the general revenue grant.

This record settlement would still fall short of the £15.4 billion claimed by Cosla before the budget.

A recent survey by the Local Government Information Unit revealed that around a fifth of councils were considering tax rises of at least 10 per cent next year.

Perth and Kinross councilors have already voted in favor of proposals to increase taxes by 10% in 2025 and 2026 and 6% in 2027.

The plan will be submitted for approval when the local authority approves its budget in February.

Since 2007, council tax has generally either been frozen or increases have been capped by Holyrood.

According to 2021-22 figuresmunicipal tax revenues represented around a fifth of local authority funding.

THE the levy was frozen in 2024-25with the government paying councils more than £200 million to cover the cost.

A freeze was good news for landlords, but it angered desperately cash-strapped councils.

The move was also criticized as an ineffective way of helping the poor, with rates based on property values ​​from 1991.

After the budget, Cosla said she would “spend the next few days analyzing the implications for local authorities”.

Scotland’s 32 local councils will crunch the numbers in the coming days to work out exactly what the budget means for them.

Part of this money will be reserved or linked to particular objectives or projects.

Councils have a legal duty to establish balanced budgets.

The housing tax represents a relatively small part of the overall budget of each municipality, but it is extremely important because it is paid by each household.

But would significant increases be acceptable to local voters? Would they be unhappy with the rising bills? Or would they be happy to pay more if they felt local services were protected?

In 2023, when inflation was high, municipalities had the freedom to increase council tax as much as they saw fit. Many opted for 5% increases, but a few opted for more.

Individual councils will decide on council tax increases in around two months.

The Scottish Conservatives said the government should have used the budget to reverse “damaging tax rises”.

Instead, Robison proposed changes to lower income tax thresholds, which she said would provide “certainty and stability” for taxpayers.

The move would allow people on incomes below £30,300 to save up to £28.27 a year compared to if they lived elsewhere in the UK, according to the Chartered Institute of Taxation.

Robison said the tax measures set out in this budget would bring an extra £1.7 billion to the Scottish Government, compared to if the UK system was in place.

Another key announcement is an extra £2 billion in cash for the health and social care budget, compared to 2024-25.

However, David Phillips, associate director of the IFS, said figures published on the sidelines of Robison’s speech suggest the actual increase will be closer to £1bn.

A proposal to effectively remove the two-child cap on benefits in Scotland was the “rabbit out of the hat” in the SNP budget.

UK government policy prevents parents from claiming Universal Credit or Child Tax Credit for a third child, with some exemptions.

Robison said she would aim to provide funding to the families of the 15,000 affected children in Scotland by April 2026 – but did not explain how the Government would achieve this.

The government estimates this would cost between £110 million and £150 million in 2026-27. Independent economists say that the costs could reach £300 million in coming years.

SNP ministers say Scottish Social Security would receive £3 million over the next two financial years to build the system needed to ease the cap, but they need the UK government to provide data on those who are not receiving benefits due to this policy.

“I would be surprised if the UK Labor Government did not ensure that the Department for Work and Pensions approached this issue in a sensible and productive way,” Robison said.

Social Justice Secretary Shirley-Anne Somerville has formally written to the UK Government to request access to eligibility data and co-operate to ensure additional benefits are not clawed back.

A UK Government spokesperson said it would engage constructively with the Scottish Government “if necessary”.

The two-child cap was introduced by the UK Conservative government in 2017, but was maintained by Sir Keir Starmer’s Labor administration.

During Prime Minister’s Questions, John Swinney said his government wanted to end the “abhorrent” two-child limit “because the UK Labor government has failed to do so so far”.

Following a speech outlining his six prioritiesSir Keir said he did not accept that removing the cap was a “silver bullet” to tackle child poverty.

“If you really want to tackle child poverty, you have to look at health, you have to look at education and you have to look at many aspects of a child’s life,” he said.

The Labor leader said he was determined to reduce child poverty and had set up a working group to do it.

In each of the last three years, the Scottish Government has been forced to use emergency powers to balance its budget. Announcement £500m cuts Earlier this year he cited higher-than-expected public sector pay deals after exceeding the 3% forecast.

For 2025-26, the government has again planned a 3% increase, although this is part of a 9% increase over three years.

Robison insisted the government would not have to resort to emergency measures next year.

She also said she wouldn’t settle for one announced compensation of £300 million from the British government to offset the increase in employers’ national insurance contributions.

Holyrood ministers say the UK-wide tax change could increase public sector staff costs by more than £500m.

A “disastrous” budget

The UK government spokesperson said the Chancellor’s autumn budget had allocated more money than ever before to Scottish public services.

During Prime Minister’s Questions, Scottish Conservative leader Russell Findlay described the SNP’s budget as “disastrous”.

He added: “Instead of cutting taxes, the SNP has pushed more Scots to pay higher income tax.”

Scottish Labor leader Anas Sarwar has accused SNP ministers of “wasting the opportunity” of record levels of UK government funding.

He said they had “no plan, no leadership and no vision for Scotland”.