A plan to raise council tax by 4.5 per cent and use some of the extra cash to borrow more was rejected by councillors last week.
The SNP administration supported a suggestion that council tax should rise by 4.5 per cent next year – but 1.5 per cent of it should be ring-fenced to allow the council to borrow more.
Chief finance officer Bryan Smail told councillors that the extra 1.5 per cent increase would generate around £1 million revenue, which could make it possible for them to borrow around £20m.
Over five years that could mean an additional £100m which would be used for capital investment.
Mr Smail said: “This represents a tremendous opportunity for game-changing investment.”
He said the benefits it would bring included job creation and would allow projects to go ahead that would “otherwise not be affordable”.
Mr Smail told councillors that the cash would support the council’s capital programme, which is “experiencing immense pressure”.
Although he didn’t go into details, he said members would see for themselves when the capital programme is presented at council. Mr Smail explained that the cash would be paid back over 20 years using ringfenced cash from the 1.5 per increase.
Council leader Cecil Meiklejohn told councillors that they were not looking for any firm decision but they did want the chance to look at the proposal and see what projects could be funded through it.
This year, the councillors not only have the headache of setting a budget with a £20 million shortfall in funding – they won’t have much time to make decisions as the general election will delay the UK and Scottish budgets.
There is little doubt, however, that whatever settlement the council gets will have a significant shortfall and will mean another squeeze on services.
Cllr Meiklejohn said: “We are advised to listen very carefully to Mr Smail. While we know the council is in a state of flux with the budget we also have to be mindful of the fact that at the other side there will be a short time scale as we have to set our council tax by March.”
She argued that setting a rise of three per cent would help with planning but she added: “I think we should explore further the supplementary rate of 4.5 per cent and what that would deliver for Falkirk.”
However, Labour leader Robert Bissett said that his group felt they did not have enough information to approve the potential rise.
He said: “We have not got the budget settlement from Holyrood and Westminster yet, so it’s premature.”
Conservative group leader Lynn Munro also accepted that council tax should rise by three per cent but her group was reluctant to support the recommendation for a 4.5 per cent increase.
Cllr Nigel Harris (Con) said: “Once again, we are being asked to take significant financial decisions when most members have not got the full facts. What would the people of Falkirk say if they knew we were raising council tax and not using it to repair pot holes or preserve services? I’m not sure they would sit too easily with that.”
He said he was not rejecting the idea completely but they were looking for more information.
What we know -
Council tax in Falkirk will almost certainly rise by at least three per cent in 2020
Even with that extra three per cent, there will still be a budget gap of £20m.
It looks likely that councils will be allowed to raise the council tax by up to 4.79 per cent, although this has not been confirmed
Health and social care services are being asked to find savings of £3 million as a contribution to the budget cuts
An increase of three per cent would see a Band D property’s council tax rise by £35 for the year; a 4.5 per cent increase would mean a rise of £53 for the year.
Falkirk currently has the fourth lowest band D council tax in Scotland at £1169.