Council tax payers could see rises of 15% in 2007/08, Cosla said

On Thursday, Scotland's 32 local authorities are expected to announce council tax rises averaging about 4.5%.

Cosla has claimed that the executive has been imposing increasing policy demands upon councils, which face a funding shortfall of �400m in 2006/07.

However, ministers said councils have had "unprecedented" budget rises.

The hard facts are that Scottish local government is under-funded Cosla open letter

The expected rise in the average council tax bill will come despite First Minister Jack McConnell insisting that increases should be kept to 2.5%, roughly in line with inflation.

Local authority body Cosla said that, without more funding from the executive, households could face hikes of up to 15% in their bills the following year.

These combined rises would increase the current average Band D bill by �221 to �1,315 in April 2007.

The executive, which provides 80% of local authority budgets with the rest coming from council tax, will provide �8.3bn core funding for 2006-7 and has proposed �8.5bn for 2007-8.

Cosla said the funding shortfall meant tough decisions had to be made over whether to keep bill rises down or cut local services.

Capping powers

Councils also face a �560m bill to meet historic equal pay obligations to staff and millions more to avoid future legal action.

Finance Minister Tom McCabe has questioned the financial performance of some highly-paid council officials in allowing equal pay liabilities to accumulate.

Mr McCabe has hinted that he may consider using the executive's capping powers to block very large rises in bills.

The finance minister questioned the performance of council officials

However, in an open letter issued on Monday night and signed by Cosla President Pat Watters, the local authorities accused ministers of trying to deflect attention from the "primary" issue of under-funding.

It stated: "The executive calls for a mature debate and then goes on to contradict itself by speaking about six-figure salaries, outrageous financial incompetence, threats to re-organise, attacks on our staff and selects some authorities as being beacons of good practice.

"The executive should also be ashamed of themselves for consistently using the threat of re-organisation to bully us into silence.

"The hard facts are that Scottish local government is under-funded, and the executive is resorting to bully boy scare tactics because it is losing the reasoned and evidenced argument."

However the executive said councils had "enjoyed unprecedented increases in funding since devolution", amounting to 55% between 1999 and 2007-08.

A spokesman said: "When the finance committee took evidence from Cosla on 24 January, chief executive Rory Mair said councils hold �1bn of reserves, of which 25% was unallocated.