Councillors could vote to freeze council tax in Aberdeen for the coming year at next week’s budget meeting.
The ruling administration has brought forward a move to freeze the council tax at current levels for the 2021/22 financial year.
It follows a decision by the Scottish Government to provide millions of pounds’ worth of funding to local authorities – the equivalent of a 3% rise – in exchange for freezing tax.
Aberdeen City Council would receive £4.2 million under the scheme, which was announced by finance minister Kate Forbes earlier this year.
However, although they have proposed the freeze, the local authority’s leaders fear it could leave them with a shortfall in future years as there is no guarantee the payment from Holyrood will be built into grant funding in future years.
‘Shaping our budget to meet the needs of the people of Aberdeen’
Co-leader Jenny Laing said: “We understand the Covid situation has had a huge impact nationally and internationally. The effect it is having on families and households in Aberdeen is significant, and that is why we will be mindful of that.
“We don’t want to put added pressure on people when they are worried about whether they will have a job or whether they will be able to heat their homes.
“It’s in our interests to make sure we are shaping our budget to meet the needs of the people of Aberdeen.”
However, Ms Laing added: “The local flexibility to shape budgets to suit the needs of local people are diluted because the Scottish Government are dictating how we spend money and how we raise it too.”
Fellow co-leader Douglas Lumsden said: “It’s disappointing the Scottish Government have tied our hands on it, but because the money is there it is only right we use that to freeze the council tax at last year’s level.
“We will be seeking assurances that the extra money to compensate for the council tax freeze will be built into the base budget so we are not penalised in future years for freezing the council tax.
“I am sure residents will be pleased to hear there is not going to be an additional burden of council tax rises next year.
“It’s been a difficult year for so many people and it’s the right thing for us to do to maintain council tax at 2020/21 levels while we go through the pandemic.”
SNP group deputy leader Jackie Dunbar welcomed the leaders’ announcement.
The opposition parties are also set to put forward proposed budgets at next week’s meeting.
‘Accepting the Scottish Government’s £4.2 million to fund a council tax freeze’
Ms Dunbar said: “I am pleased that the Tory-led administration have finally provided families in Aberdeen with the certainty that they deserve, confirming they will be accepting the Scottish Government’s £4.2 million to fund a council tax freeze.
“The Scottish Government has stepped up to the plate to provide the funding to protect households at a time when family budgets will be stretched and for that they should be commended.”
A Scottish Government spokesman said: “In order to protect people’s incomes, local authorities are being offered £90 million of funding – the equivalent of a 3% increase – included in the 2021-22 local government settlement to compensate councils who choose to freeze their council tax. This was announced as part of the 2021-22 Scottish Budget.
“We urge councils to accept this significant support which will help protect household budgets while at the same time protecting vital local services. However, it remains a decision for councils themselves to make.
“In 2021-22, Aberdeen City Council will receive a total funding package of £395.5 million to support local services, which includes an extra £11 million to support vital day to day services, equivalent to an increase of 3.1% compared to 2020-21.
“The day to day service funding includes £4.2 million to compensate the council should it decide to freeze council tax levels.
“Decisions on local government budget allocations for future years are subject to the outcome of the on-going negotiations with COSLA but it is worth noting that the annual local government finance settlement includes £630 million following the council tax freeze between 2008-17.”