HOUSEHOLDERS are facing sharp increases in council tax after the SNP gave local authorities the freedom to raise bills by whatever they want.

For the first time since it came to power in 2007, the party ended its unbroken runs of council tax freezes and tight caps on rises.

Instead, councils have been given “complete flexibility” over the setting of domestic bills, meeting a long-standing demand by local authorities for greater autonomy.

As next spring sees local elections across Scotland, councillors will strive to keep rises to a minimum in 2022/23 for fear of stoking a voter backlash.

But intense budget pressures mean that will be increasingly difficult in later years.

The average bill for a Band D home is currently £1,300 and £3,184 for a Band H.

The Tories said the Government had left councils with “a horrid choice between failing to deliver essential services or making up the shortfall through eye-watering tax rises".

The surprise move emerged after SNP Finance Secretary Kate Forbes as she set out the draft Scottish budget at Holyrood, the first as part of an SNP-Green Government.

She said it would help tackle child poverty, support economic recovery and take important steps towards a greener economy as part of the fight against climate change.

The budget also saw a de facto tax hike for middle class earners, with the threshold for the higher rate of income tax frozen for the fourth year since Holyrood took control of it.

It means those earning over £43,662 north of the border next year will pay 41p in the pound up to £150,000, a real terms increase given the impact of inflation.

Someone earning £50,000 in Scotland will pay £1,489 more in income tax than their counterparts in England and Wales.

Last year, Ms Forbes froze council tax as a cost of £90m to help families struggling through the depths of the Covid pandemic.

However in this year’s speech she failed to mention it at all. 

Instead there was a cryptic reference to increasing "the fiscal autonomy and power of local government, and put more say over how local budgets are raised in local hands”.

It was only within the 148-page budget document that the policy was made explicit.

It said: “For 2022/23, councils will have complete flexibility to set the Council Tax rate that is appropriate for their local authority area.

“In setting Council Tax rates, we expect councils to take full account of local needs and of the impacts on household budgets of the decisions they make.”

Earlier, at FMQs, Nicola Sturgeon had told MSPs: "The Scottish Government will endeavour to operate on the basis of openness, candour and transparency in all that we do."

In the budget debate, Ms Forbes was accused of laying the ground for council tax hikes by Tory MSP Murdo Fraser who pointed out the funding for local authorities will be at a virtual standstill next year, rising just £40m to £11.1billion.

He said: “That represents a substantial real terms cut. Doesn’t this make it inevitable that we will see a substantial council tax increases for hard-pressed households as a result of this Finance Secretary’s choices.”

Ms Forbes said there was “real terms growth” in the settlement for local government and protected the core budget “in cash terms”.

The SNP came to power in 2007 promising to replace council tax with a local income tax, partly in response to years of above inflation rises by local authorities.

Unable to make local income tax work, the Government froze council tax in 2008/09 as a stop gap measure that lasted until 2016/17.

From 2018/19, the Government capped rises at 3%, rising to 4.8% in 2020/21, before freezing it again in 2021/22.

Scottish Conservative Finance and Economy spokeswoman Liz Smith said: "The SNP have quietly opened the door to massive council tax rises next year.

"Kate Forbes didn't even mention it in her statement but the government have completely removed the cap on tax hikes at an incredibly difficult time, when many Scots are already struggling to get by.

"Instead of giving our communities a fair deal, the SNP have cut funding in real terms and passed the buck onto local councils.

"The SNP are leaving local councils with a horrid choice between failing to deliver essential services or making up the shortfall through eye-watering tax rises."