10 per cent Council Tax hike will yield £7m for front-line services

In her budget planning report for 2024/25, to be presented to full council on Thursday, October 24, Suzy Douglas, SBC’s director of finance, warns that the authority faces a £50 million funding gap over the next ten years, according to the latest forecasts.

The director points out that the Borders currently has a Band D charge for Council Tax of £1,356 per annum. This represents the seventh lowest Council Tax charge in Scotland and the fifth lowest on the mainland.

She states: “This relatively low level of Council Tax reduces the council’s spending power compared to other Scottish local authorities with higher Council Tax rates.

“For comparative purposes, a neighbouring authority’s current Council Tax charge is 12 per cent higher than that in Scottish Borders.

“If our Council Tax had been set at this rate during 2024/25 it would have equated to additional income of £8.4 million to spend on local services.

“The indicative budget approved in February 2024 assumed that from 2025/26 the council will increase Council Tax by 10 per cent.

“This increase will allow the council to protect important front-line services which otherwise may be impacted by service reductions in order to balance the budget.

“Each one per cent increase in Council Tax provides circa £700,000 to the council to support delivery of council services.”

The report states that the forthcoming budget round will be very challenging for the council given significant cost pressures including pay, inflation and ongoing service demand.

A 10 per cent uplift in Council Tax would be equivalent to 5.8 times the current rate of inflation which stands at 1.7 per cent.

The report adds: “Continuing the robust corporate approach to the budget focussed on transforming council services, investment in new technology to reduce costs, greater operational efficiency, new ways of working and the prioritisation of core council services will be essential.

“All opportunities for increased income must also be progressed including Council Tax increases.”