A COUNCIL tax rise seems extremely likely in Dumfries and Galloway as the local authority tries desperately to plug a £13m projected funding gap.
Householders already struggling due to fuel poverty and the cost of living crisis could face a tighter squeeze if council chiefs go ahead with tax increases.
The local authority is due to set its budget for the 2023/24 financial year in the coming weeks, with some very difficult decisions required to balance the books.
Following confirmation of the financial settlement from the Scottish Government, finance chiefs have estimated that there will be a cash shortfall of £12.989m next year – and £39.7m over the next three years.
That huge funding gap – along with cost-savings options – are due to be discussed at the council’s finance, procurement and transformation committee next Tuesday.
A report produced for the committee states: “At present, the band D council tax in Dumfries and Galloway of £1259 is seven per cent below the national average, which equates to an annual income forgone of £5.6m per annum.
“Each one per cent increase in the council tax level will generate additional funding of around £805,000.
“Given the extent of the funding gap, consideration of appropriate council tax increases needs to take into account both the requirements of council services and the pressures on householder budgets.
“Previous public consultations have consistently indicated an appetite to increase council tax if it supports/protects necessary services. Members may therefore wish to review the level of council tax increase to be considered in conjunction with savings options and investment proposals.”
A ‘change and savings’ programme is currently being developed, which aims to bring forward specific savings options for 2023/24, and clear programmes for achieving change and savings over the next four to five years.
Meanwhile, the Scottish Government is enabling local authorities to consider an accounting flexibility where they can pay off debts, such as PPP schools contracts bills, over a longer period. Dumfries and Galloway currently services several PPP debts in its schools estate.
Gillian, Ross, the council’s finance and accounting manager, said: “The funding settlement for 2023/24 and the outlook for the subsequent period indicates that Scottish local government will face an extremely difficult challenge over the upcoming period.
“Dumfries and Galloway Council’s relatively strong financial position, and the prudent approach consistently taken by members when setting budgets, has played a significant role in supporting council services to date.
“It will be important that the budget setting approach and principles that have supported the maintenance of the council’s financial resilience to date continue to support members’ ongoing budget setting considerations.”
