Edinburgh council tax to rise by 4% as Lib Dems and Conservatives strike deal

Edinburgh will see a 4% council tax rise after Labour struck a deal with the Liberal Democrats and Conservatives at Thursday’s budget meeting.

A projected 5% council tax increase was cut down by 1% point as a result of the deal. The Conservatives won a freeze on pay-and-display rates in the arrangement.

The higher council tax rates will hit Edinburgh taxpayers from April 1.

Labour currently runs the council, but lacks a majority, and relies on support from the Conservatives and Liberal Democrats to govern.

Finance director Richard Lloyd-Bithell, when compelled by SNP group leader Councillor Simita Kumar to share his opinion, warned councillors about the low rate.

Any councillor can require the finance director to share their opinion on matters of council finance.

He said setting the rate below 5% could require ‘savings’, council tax increases, or efforts to find other sources of income in future years.

Mr Lloyd-Bithell added that his advice aligned with that of the Accounts Commission, a body that audits Scottish local authorities.

The decrease from 5% to 4% was achieved using ‘one-off’ funding, drawn from money the council underspent over the last year.

Labour councillor and finance convener Mandy Watt said: “This is likely to be the lowest [council tax] increase by any local authority in Scotland.

“We must do what we can for our citizens, our private renters paying council tax on top of their rent. There are no cuts to services in this budget.”

A 4% council tax increase means a Band D property will pay £1,626.05 per year – £62.54 more than last year’s rate of £1,563.51.

Meanwhile, a Band B property, the most common in Edinburgh, will go up £48.64 more per year, from £1,216.06 to £1,264.70.

The most expensive band, Band H, will increase by £153.22 per year, from £3,830.60 to £3,983.82.

The increase stands in contrast with the one Edinburgh taxpayers faced last year, which stood at a striking 8%.

Cllr Kumar called the agreement between Labour and the Tories ‘grubby’, and said it snuck in ‘last minute cuts’.

She added: “The SNP put forward positive proposals aimed at tackling homelessness and alleviating poverty.

“But the usual combination of Labour, Tories and the Lib Dems once again voted through the regressive proposals.”

The council underspent its budget in several areas last year, including in housing and homelessness services.

Notably, the council failed to spend £60m in that area, leading to Glasgow’s housing convener saying he would ‘happily’ take up the cash for his city.

But at Thursday’s meeting, council leader Jane Meagher celebrated a £1.6bn investment from capital spending in housing in the budget, which is expected to deliver about 2,500 new homes over the next five years.

Alongside winning no increase in pay-and-display charges, the Conservatives also won a commitment that talks would commence with Lothian Buses about its returning a dividend.

Before the pandemic, the publicly-owned bus company returned excess profit to the council, but it has not done so since.

Conservative councillor and group leader Iain Whyte said: “We did not get everything we wanted today.

“But Edinburgh residents can be reassured that the Conservative Group fought hard to keep their bills as low as possible.

“And that we will continue to hold this administration to account on delivering value for money from every pound of taxpayers’ money.”

His group had sought a 2.5% increase in council tax, the lowest of all the groups, and described the 4% agreed as a ‘compromise’.

Labour, the Liberal Democrats and the SNP all initially agreed with a 5% increase in council tax, as recommended by officers, while the Green group supported a 6% increase.

Green councillor and co-leader Kayleigh Kinross-O’Neill said she was ‘disgusted’ by Labour striking a deal with the Conservatives to get a budget across the line.

She continued: “Greens had clear, costed proposals to limit the rent increases for council tenants, saving individuals between £100 and £200 a year.

“These proposals were rejected by the administration, along with plans to increase the council’s ability to crackdown on rogue landlords and protect renters.”