Councillor Thomas Heald is a Scottish Conservative councillor for Dunblane and Bridge of Allan, Scottish Conservative and Unionist candidate for Dunfermline and political advisor in the Scottish Parliament.
When the SNP unveiled its Budget on 13th January, ministers tried to dress it up as a plan for fairness and stability. But the truth is now clear: this was a £1.8 billion stealth tax raid on working Scotland, designed to paper over years of economic failure and the bill will ultimately be paid by our councils and local services.
The decision to freeze the higher-rate income tax threshold at just £43,663 will drag another 53,000 middle-income Scots into the punitive 42p rate next year. Nurses, teachers, engineers and police officers are people who were never meant to be classed as “high earners” and are now being taxed as if they were.
Business groups have already warned that this widening tax gap with the rest of the UK is making it harder to recruit and retain the skilled workers Scotland needs to grow. And the SNP’s own fiscal watchdog has confirmed the damage: of the £1.8 billion raised in extra taxes, £785 million is simply lost because of weaker economic performance, what it calls the “tax-base performance gap”.
In other words, the SNP is hiking taxes while shrinking the economy at the same time. That is the worst of all worlds and it is devastating for local government.
Councils depend on a strong, growing local economy to fund the services people rely on. When the SNP chases talent out of Scotland and suppresses wages, it directly erodes the tax base that pays for social care, schools, roads and waste collection. You cannot fund local services by driving away the very people who pay for them.
Yet instead of facing up to this failure, the SNP’s Budget doubles down on the same mistakes. Ministers boast about an income tax “cut” worth a maximum of £32 a year, while quietly dragging tens of thousands more workers into higher rates. This is not tax relief; it is political trickery.
Meanwhile, spending is spiralling in areas that squeeze out funding for councils. The SNP’s own Budget shows social security spending rising by £646 million to £7.4 billion, exceeding what Scotland receives to fund it by £1.1 billion. That black hole has to be filled and it is filled by cutting capital budgets, hollowing out local government and pushing costs onto households.
That is why, in the same Budget, we see the health and social care capital budget cut by nearly £50 million, the rural budget cut by almost £40 million in real terms, and the enterprise budget slashed by £22 million. These are exactly the budgets that keep communities functioning and economies growing and they are being sacrificed to sustain an unsustainable welfare bill.
For councils like Stirling, where I serve, this is already having real consequences. Demand for care is rising as our population ages. Schools are creaking under the strain of rising violence, increased additional support needs and more contact time for teachers already considering leaving the profession. Roads and infrastructure are deteriorating. Yet Holyrood continues to dump new duties on councils without the money to deliver them.
Then, to add insult to injury, the SNP is now preparing to hike council tax by introducing new bands on higher-value homes and spending £5 million on a revaluation exercise. Ministers will pretend this is about fairness. In reality, it is about shifting the blame. When bills go up across Scotland, they will point the finger at councils even though it is their tax and spending decisions which have created the mess.
What makes this even more galling is where the money is going. While councils are squeezed, the SNP is increasing foreign aid by 25 per cent, boosting its constitution budget by £36 million, and pouring more cash into its international offices. This is a government that can always find money for its own obsessions, but never for the basics that matter to families.
Communities like Dunfermline will feel this acutely. Dunfermline is growing, bringing opportunity but also pressure on schools, housing, transport and care services. Meeting those needs requires a council that is properly funded and empowered to plan. Instead, it will be handed another SNP Budget that looks generous in press releases but leaves local government scraping by behind the scenes.
Scottish Labour, disgracefully, offers no real alternative. They talk about spending more, but they refuse to challenge the SNP’s destructive tax policy or its out-of-control benefits bill. That means more stealth taxes, weaker growth and even less money for councils.
Scotland deserves better.
The Scottish Conservatives set out a different path: raising tax thresholds with inflation, cutting the basic rate to 19p, and letting people keep more of what they earn. A package that would have saved working Scots up to £718 next year. That is how you grow the economy, strengthen the tax base and properly fund local services.
The SNP’s January Budget was not a serious plan for Scotland. It was a stealth tax on aspiration, designed to hide economic failure behind higher bills. But Scotland’s councils, and the communities they serve, will be left to pay the price.
