The first big decision of the council budget will be made next week when councillors meet to decide the levels of council tax for 2018/19.

After nine years of demanding that councils freeze the council tax the Scottish Government is now encouraging us to increase it by three per cent each year of this Scottish Parliament term to offset some of the cuts they are making to our grant funding. 

If we were to increase council tax by more than three per cent the cabinet secretary for finance Derek Mackay has indicated that he would cut the council’s grant, meaning that we would not be any better off.

You will recall that last year councillors in Inverclyde decided not to implement a three per cent increase as many families were already facing increases of between 7.5 per cent and 22.5 per cent following the decision of the Scottish Government to makes changes to the upper bands E to H.

Instead we used reserves to balance our budget.

Like the SNP government in Scotland, the UK Tory government also imposes a cap on council tax increases in England.  For 2018/19 the cap has been set at 5.99 per cent for councils with similar responsibilities to Scottish councils. 

If a council in England wanted to increase council tax by more than 5.99 per cent they would need to hold a local referendum and secure a majority vote from its electorate to do so. 

Given the Scottish Government’s liking for referenda they might want to think about introducing a similar system in Scotland?

The long-term impact of the council tax freeze is that council tax now funds a relatively small proportion of council expenditure and increases in tax generate a modest amount of additional income. Those of you who used the council’s budget simulator will know that a three per cent increase in council tax raises £860,000.

Although in the context of an £8-9 million budget gap this isn’t much, it would mean that £860,000 of cuts to services would be avoided. For example, this figure is roughly equivalent to the combined saving that would be made by the proposed cuts to our library and museum services, removal of the under-19 sports subsidy, cuts to the school music service and the closure of our breakfast clubs.

A three per cent increase in council tax would cost council tax payers between 38p and £1.69 a week more depending on the band their property is in, although many households would not pay anything more due to the council tax reduction scheme.

A three per cent increase would be broadly in line with the current UK rate of inflation.

No-one wants to pay more in tax. The stark fact however is that unless we do greater cuts will have to be made to our local services.

Before councillors make a decision on the level of council tax next Thursday we will know what people have said to us through the budget consultation. I suspect that the majority of respondents will be of the view that the time has come for an increase to protect services and jobs.