Council tax could rise by up to 16 per cent in Inverclyde

A grim report by Municipal Buildings chiefs outlines four options which the council can take to address a multi-million-pound budget shortfall.

The district's community warden service could go completely, free swimming lessons for primary four pupils may be stopped and library opening hours drastically cut.

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As many as 70 full-time posts may have to go in order to realise savings of more than £2.8 million.

Inverclyde Council leader Stephen McCabe says that the local authority is facing a ‘stark choice’ between cutting services and freezing council tax.

Publication of the report follows the Scottish Government’s announcement of its draft settlement for all councils and outlines the implications of the draft budget for the council’s budget planning process.

The document states: “The draft settlement is lower than had been assumed and included a like for like £2 million reduction in funding within revenue and £300,000 reduction in capital.

“In addition, there are several conditions around how large elements of the funding are to be used, plus the estimated £1.76 million Council Tax Freeze Grant is conditional on the Council agreeing to freeze Council Tax in 2024/25.

“The members budget working group (MBWG) have been reviewing savings options and have identified a reduced list of options totalling £2.875 million.

“This is barely sufficient to balance the estimated funding gap over 2024/26 even after the use of a significant amount from reserves.

“The sustainability of the current two-year Budget Strategy is therefore in question.”

The report outlines the council's potential next steps, which include an option to reject the Scottish Government’s council tax freeze grant and raising the local levy.

Municipal buildings bosses are recommending that the council launches a consultation to find out the public’s views on the four options and the potential cuts which could be made to plug its funding gap.

Under all four options, council tax would be raised by seven per cent in 2025/26.

The first would see the council set a one-year budget and implement the Scottish Government’s plan to freeze council tax in 2024/25.

This would require the local authority to make £700k of savings in 2024/25 and would leave a funding gap of £1.3 million after the rates rise in 2025/26 is implemented.

The second route the council could go down would involve setting a one-year budget and increasing council tax by nine percent in 2024/25, meaning that it would need to make £50k of cutbacks in 2024/25.

It would also leave the local authority with a funding gap of £390k in 2025/26.

A third proposal would see a two-year budget set and the council tax freeze put in place in 2024/25 but would require the local authority to make £2m of savings over the course of 2024/25 and 2025/26.

The final option would see the local authority set a two-year budget and increase council tax by nine percent in 2024/25, which would leave it needing to make £440k of savings across the two-year period.

The proposed consultation also lists 16 measures which could be taken if savings are required and asks the public to rank them based on preference.

These include the aforementioned cuts to libraries, the community warden service and free swimming, as well as proposals to shrink the council’s employability services, end free transport to Bluebird Family Centre and Glenbrae Children’s Centre and reduce the amount of musical instrument instruction available to school pupiles.

When approached by the Telegraph for comment on the council’s budget options, council leader Stephen McCabe said he understood the concerns of residents who were worried about the possibility of a council tax rise or significant service cuts.

He said: “As a council we have to set a legally balanced budget.

“Unless we get a better settlement from the Scottish Government, we are faced with a stark choice between freezing council tax and cutting services.

“A nine percent council tax increase would result in the following weekly increases: Band A £1.65; Band B £1,92; Band C £2.20; Band D £2.47; Band E £3.25; Band F £4.02; Band G £4.85; Band H £6.06.

“Over 80% of households in Inverclyde are in Band D or lower with 62% in Bands A and B.

“Over a quarter of households in Inverclyde wouldn’t pay any more if council tax is increased as they are either exempt or in receipt of Council Tax Reduction.”

Mr McCabe added: “From a forward planning perspective and to give more certainty for our workforce a two-year budget would be preferable to a one-year budget.

“My group’s wish is to keep any service cuts to a minimum so as it stands options two and four are the better options for that.

“However, COSLA is continuing to press the Scottish Government for an improved funding settlement, so things may change over the coming weeks and before we set the final budget at the end of February.

“We will obviously also reflect on the feedback we get from the consultation.”

Councillors will decide whether to back the proposed consultation at the next full council meeting on February 1.