10% council tax increase ratified as resolution on 21% funding disparity sought

Orkney Islands Council's decision to increase Council tax in the county by 10% has been ratified at today's meeting of the Full Council - and comes with a vow to push the Scottish Government for a resolution to the long running disparity between the funding received by the Council and other island authorities

Orkney residents will receive funding of  £360 (10.7%) per head of population less than Shetland and £707 (21.1%) less than Western Isles for 2023/24.

If Orkney was to be funded on the same basis as the Western Isles, the Council would have received an additional £15.9 million for the delivery of their services.

The Council's budget for this year has been set at £101.7m but with a significant shortfall between that figure and the Council’s allocation from the Scottish Government,  the Council needs to generate £11.3m in Council tax and take over £17.4m from its reserves - more than ever before - in order to protect vital Council services.

Whilst the increase in Orkney will be the biggest percentage increase in Scotland, OIC is one of the few local authorities not to make service cuts this year as part of their budget setting for 2023/24 - but there is a warning service reductions could come if the funding situation cannot be resolved.

Even with the increase, council tax rates will remain in the lower half of rates in Scotland with Band D properties now set at £1,369.21 a year – an increase of £124.48, or just over £10 a month, from last year.

As well as increasing demand for services, the Council has also seen its costs rising, particularly for energy costs which has gone up by 15%.

Council Leader James Stockan has vowed to continue to push the Scottish Government for a fairer settlement.  He said “The news that Council tax is increasing by 10% will be of a concern to many in our community, who are already struggling with rising costs. This has not been an easy decision but we’re doing it to help to protect those important Council services that you, your family, your friends and your neighbours, need and rely on – the more we collectively raise in council tax, the more we’re working together to preserve and protect those services for the good of everyone in Orkney.

"The issues that we are facing are caused by the poor settlement we get from the Scottish Government compared to our island neighbours. If we got similar amounts to them we simply wouldn't have to be challenging our community in this way - and we will continue to bring that point to the attention of the decision makers in Holyrood

During the next year officers will be bringing reports forward that look at income can be generated for the Council, how they can change the way they run services to do it more efficiently or as a last resort where they might need to make cuts.

One such report will see Councillors make a decision on whether to go ahead with Orkney’s Community Wind Farm Project, which the Scottish Government gave  planning permission for last year. It could generate an additional £6m a year in income for , as well as providing a community benefit scheme for communities to carry out projects of their own.

The full committee report from the earlier Policy and Resources Committee and a recording of the meeting are available at https://www.orkney.gov.uk/council-meetings.htm?postid=7001&postdiaryentryid=15352