Bill Fernie, Wick, backed the initiative and said it would be welcomed by the public, but Landward member David Flear felt the additional money provided by the SNP administration would not be adequate to offset the cost of the freeze and could impact on services.

"It might go down well with the public at this stage but if services are affected it may not be seen as such a positive thing," Mr Flear said yesterday.

He doubted that the extra £3.2 million allocated to the Highland Council to ensure the tax remains at its current level would be enough to cover any projected rise. Mr Flear, a former Caithness area convener, also stressed that the budget is already under pressure and that two per cent efficiency savings have to be made in 2008/2009.

"There's only so many efficiency savings you can make and I will be interested to see where they can be made. There is very little meat on the bone in that regard," he said.

The key time will come when the council sets its budget, said Mr Flear, who claimed the local authority had already made some major commitments on spending. He felt the overall council settlement of £508.4m in 2008/09 would be very tight and would force the administration to make difficult decisions which could affect local authority services and the voluntary sector.

Mr Fernie agreed that the overall budget settlement, which amounts to £1.5 billion over the three-year period from 2008 to 2011, is tight. "It is not over-generous but fair," he said.

Mr Fernie, who is the chairman of the education, culture and sport committee, pointed out that although the Highland Council has to make efficiency savings of two per cent the money will not go back to the Government but can be retained by the local authority.

He welcomed the freeze on council tax and felt that the additional £3.2 million, which was determined in negotiations between the Convention of Scottish Local Authorities (COSLA) and the Scottish Government, was adequate to cover the cost of the tax freeze.

Mr Fernie backed the move and said: "Anything that helps prevent a rise in council tax has got to be a good thing for people generally. It must be a very long time since there has been no rise in such taxes. It is the first time I can remember it happening. In past years the increases have been higher than inflation."

He explained that only 20 per cent of the Highland Council's budget comes from council tax, with 80 per cent from Government grant and commercial rates. "The council tax is one factor in the whole equation," continued Mr Fernie, who acknowledged that the local authority has tough choices to make in the coming financial year. The cost of fuel and electricity has gone up sharply and this impacts on the council. "Our school heating bills have gone through the roof," he added.

The financial details behind the plan to freeze council tax were announced this week by finance secretary John Swinney. He revealed that under the terms of the Government's concordat with local government, the Highland Council will receive an extra £3.2 million but only if it agrees not to raise the council tax next year.

Mr Swinney said the overall settlement signalled the first significant milestone in a new relationship between national and local government that will bring significant benefits for people in the Highlands. "Annual council tax increases have been too high for far too long," he said. "This Government promised to freeze council tax across Scotland and we have put the resources in place to allow the Highland Council to do exactly that. It is now up to councils to play their part, freeze council tax and become part of the new, more productive relationship between local and national government.

"We have delivered record funding for local government and we are giving councils like Highland greater freedom than ever before to spend it in response to local demand for local services. In return, we are working with the Highland Council to agree to help deliver shared national priorities between local and national government and play a key part in making Scotland a more successful place, with opportunities for all to flourish through increased sustainable economic growth."

Highlands and Islands SNP MSP Rob Gibson welcomed the 4.8 per cent rise in funding for the Highland Council and the freeze on council tax.

"Council tax will not rise, yet there will be increased funding for Highland Council in this announcement so everyone wins," he said. "No doubt we will hear the clarion calls of our rivals as they decry our budget and what it means for the region. However, these calls should have a health warning with them as they will contain excessive hot air. Indeed the Labour and Lib Dems will be intensely negative. They will scaremonger till the cows come home, but their claims will ring hollow as they have had eight years to improve the Highlands and Islands and have failed.

"Our opponents have nothing new to offer and their incessant scaremongering is typical of their doom-and-gloom outlook and collective lack of political imagination."

Meanwhile, Caithness, Sutherland and Easter Ross MSP Jamie Stone has called on his North counterparts to come to the assistance of the Highland Council over possible cuts in essential locally-delivered services.

Writing in today's edition of the Ross-shire Journal, Mr Stone says: "The Highland Council has emerged, along with several other Scottish councils, at the very bottom of the league table of annual increases in funding just announced by the Scottish Government."

Noting that this financial settlement will now place Highland councillors in the "difficult and invidious" situation of having to make stark choices as to where the spending axe will fall, Mr Stone says Highland MSPs have a clear duty to help the Highland Council in every way they can.

"We have a role to play here, particularly in terms of working constructively with the Highland Council. Mindful of the budgetary difficulties – and the need to improve local service delivery, rather than reduce it – we can press the Scottish Government in a number of ways. Speeches in the chamber of the Scottish Parliament, and written and oral questions – these are all effective ways of pushing and harrying Scottish ministers, and during the months ahead all Highland MSPs of all parties must use the tools available. We owe it to the Highland councillors and we owe it to the people of the Highlands."

g.calder@nosn.co.uk

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