THE Deputy First Minister has rejected a council tax ‘compromise’ offered by council leader Stephen McCabe in the wake of the local authority’s decision raise rates by 8.2 per cent this year.

Shona Robison has instead urged Councillor McCabe to ‘revisit’ the controversial decision taken last Thursday, which saw his administration defy Scottish Government demands for a council tax freeze.

However the Labour leader has today hit back and claimed that Scottish local authorities are ‘heading for bankruptcy’ under Ms Robison’s watch.

READ MORE: Stuart McMillan MSP slams Inverclyde council tax hike

The government had offered Inverclyde ‘around £2.9m’ to fund the freeze. On Friday Councillor McCabe offered a ‘compromise’ which would see Inverclyde receive the promised sum in exchange for offering local taxpayers a rebate to cancel out the rise.

Greenock Telegraph:

However this idea was shot down last night by Ms Robison, who suggested the council should bring forward a fresh proposal to implement a freeze.

In a letter to Mr McCabe she said: 'This would be a solution that will involve far less administrative burden for the council than having to manage the distribution of a rebate and a far simpler solution for residents than having to wait to be handed back money they had paid.

'The advantage of implementing a freeze, rather than applying “a one-off rebate on their Council Tax charge for 2024/25”, would also be that residents in Inverclyde would not then be faced with an effective 14.2 per cent increase in their council tax in 2025/26.

'In addition, it would not then be fair to other councils who have accepted the funding on the basis of a freeze, if one council were to receive the funding on a recurring basis in exchange for a one-off rebate while nevertheless setting increases in the underlying council tax rates across the next two years.'

But in his reply Mr McCabe claimed it would be ‘wholly unjust’ if the Scottish Government did not allocate Inverclyde its share of the £147.3m set aside for councils who agreed to freeze rates.

Greenock Telegraph: Councillor Stephen McCabe and Councillor Natasha Murphy. Invercyde Council..

He wrote: 'For the avoidance of doubt, I will not be asking the council to revisit the decisions we made on 29 February.

'I would take issue with your analysis of the impact of proposed one-off council tax discount.

'The vast majority of council taxpayers pay in instalments, so they would not be significantly impacted by a short delay in processing a discount.'

The council leader also told the DFM that her claim that Inverclyde residents would face an effective 14.2 per cent increase in council tax by 2025/26 was 'misleading'.

He wrote: The proposed six per cent increase in 2025/26 is a planning assumption and is based on the prudent assumption that you will continue to cut our Scottish Government grant each year by not providing us with inflationary uplifts and our grant will reduce in cash terms due to our falling population.'

He concluded: 'If you were to refuse my offer again the only reasonable conclusion that could be drawn is that a nationwide freeze in council tax is not the national priority the First Minister said it was and that punishing councils that dared to exercise their democratic rights is more important.'

When contacted by the Telegraph for comment on Mr McCabe's latest letter, Ms Robison said: “I can see no rational financial or economic reason for the administration to increase the council tax by 8.2 per cent in the middle of a cost of living crisis.

“I would welcome the opportunity to talk further with Inverclyde Council, which is aware that if it freezes council tax, it would be provided with the same amount of money it hopes to raise from its 8.2 per cent hike.

"Instead, it will sadly be the people of Inverclyde who will have to literally pay the price of the council administration’s imprudent decision.

“For the sake of Inverclyde’s residents I hope the administration will think again as they have time to revisit their decision this week.

"And as I have confirmed to them in writing, I am happy to have further discussions with them, including on methods to deliver the Council Tax Freeze by recrediting households for next year and resetting their Council Tax Bands accordingly in future years to reverse the 8.2 percent increase.

“To date 28 councils have confirmed that they will take forward the fully funded council tax freeze, benefitting their residents at a time when the cost of living crisis is putting significant strain on household finances.”