PLANS by the Scottish Government to freeze council tax could lead to deeper cuts to local services, the leader of Inverclyde Council has warned.

First Minister Humza Yousaf announced at his party’s conference that council tax rates are to be held at current levels when local authorities set their budgets for 2024/25 - in a move he claimed was proof of the SNP 'delivering for people when they need it most'.

But local authority chief Stephen McCabe has today claimed the move will leave the Municipal Buildings with a ‘major headache’ about balancing the budget.

Scottish councils have the power to set their own council tax rates, with Inverclyde choosing to impose a 5.3 per cent increase in 2023/24.

Mr McCabe has suggested SNP plan could lead to services being slashed if councils were not given enough money to make up for the council tax income they would lose out on.  

While the First Minister confirmed that the freeze would be fully funded, it is understood that the decision on how much money will be provided to cover the cash that would have been generated through council tax will not be taken until December’s budget.

Councillor McCabe said: “Our planning assumption, which the local SNP group bought into, was that we would be raising £5m from council tax over the next two years and this announcement has blown that right out the water.

“It leaves us with a major headache about how we’re going to balance our budget.

“Councils have three clubs in our bag when it comes to balancing your budget, if you want to use a golfing analogy.

“After you get your settlement from the Scottish Government you can either increase council tax to bridge the gaps, you can put up charges to help address the gap that remains, or you can cut services.

“He’s taken away or is planning to take away one of our three clubs, we’ll either be able to put up charges – which will raise very little – or cut services.

“The announcement yesterday might be on the face of it electorally popular but just wait and see what services are going to be cut across Scotland as a result of freezing your council tax.

“[Cuts will occur] Unless they’re prepared to come up with an amount of grant which would compensate for the real increase in financial pressures that councils are facing, but the reality is they haven’t got that money.

“Any money that they put into a council tax freeze is money that they’ll take out of money for pay settlements for our staff for example.

“This just doesn’t make financial sense.”

Councillor McCabe also claimed the announcement violated the Scottish Government’s Verity House agreement, which was signed in June and promised ‘no surprises’ for council budgets.

He added: “The announcement flies completely in the face of that agreement.

“He absolutely should not have announced anything like that at an SNP conference, if the government genuinely wanted to have discussions with councils around freezing the council tax that should have been done as part of a process in a constructive dialogue with councils through Cosla (Convention of Scottish Local Authorities).

“He has torn up the Verity House agreement and he has infuriated local government in Scotland.”

The council’s SNP group leader Elizabeth Robertson conceded that it would have been ‘preferable’ if the issue had been discussed with local authorities beforehand.

She added: “It wasn’t something I was aware was going to be announced, it’s clear that there’s going to have to be a lot of further discussion at many tables with regards to this.

“I can’t comment on the detail as it was just an announcement that’s been made.

“The Verity House agreement absolutely says that there’s a new way of working between local government and Scottish Government, in particular that things should be local by default and national by exception.

“I think part of the discussions are going to be around ensuring that remains the case.

“If you think about the 32 different local authorities across Scotland there’s going to be 32 different budget contexts and 32 different strategies that are already underway in terms of how administrations and oppositions are looking at budgets.

“Everybody getting three percent, for example, isn’t necessarily going to be the thing that helps with these kinds of contexts so that’s why I think these further, more detailed discussions are going to be important.”