Nicola Sturgeon expects local authorities like Dundee to make “balanced decisions” in their budgets despite warnings from the city’s SNP council chief about tax rises and service cuts.
Council leader John Alexander earlier said his administration is braced for a “perfect storm” with high inflation, increasing wage demands and soaring energy prices.
He said there will be “no quick fixes” to Dundee’s economic woes and told residents their council tax will have to go up so an £18 million blackhole can be plugged.
Mr Alexander also told locals council-run buildings will be forced to shut in order to bring down overheads and stave off further tax hikes.
On Monday, the first minister admitted local government chief’s face “difficult” choices due to high inflation, but insisted they would be helped by extra cash.
Ms Sturgeon told The Courier: “Council budgets, the overall local government settlement, will go up by £570 million next year.
“Now we live in a time of high inflation, that means these decisions are difficult for local authorities, but I would expect all local authorities to take decisions that are in the interest of the local community.
“John Alexander is a first-class leader of Dundee City Council, and I know that council will take its budget decisions carefully and in the interests of the people they represent.”
It was warned Scotland’s local authorities face a real-term cut to funding even if council tax is increased by as much as 5% due to current economic pressures.
Councils have been put under even more pressure by workers across various sectors who are going on strike due to demands for better wages in the wake of the cost-of-living crisis.
Deputy First Minister John Swinney has repeatedly insisted his party will not be able to give local governments more money without cuts being implemented in other areas.
Dundee-based Labour MSP Michael Marra claimed councils were “staring down the barrel at savage cuts” and said local authority budgets were in “chaos”.
Setting out his warning to locals on Sunday, Mr Alexander said it was “not his job to sugarcoat reality” as he laid bare the tough situation facing Dundee.
He said ring-fenced funding to protect health, education and social care equates to around two-thirds of the council’s budget, giving little room for manoeuvre.
‘Huge challenges’
Mr Alexander wrote: “The council, like every public sector body, is facing huge challenges including the effects of inflation, wage increases, escalating energy costs and economic headwinds.
“The council has a legal obligation to balance its budget and we cannot borrow more money to fund a hole in the budget.
“In order to minimise council tax increase, it means we need to reduce costs elsewhere.
“My job is to do the best for the city I love. It is not to ignore reality or sugarcoat the challenges.
“That sometimes means making unpopular decisions that are, ultimately, in the long-term interests of the city.”
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