A 10 per cent council tax increase in Argyll and Bute is back on the table for the next financial year – as the authority faces a budget gap of over £8million.

The additional levy was voted through by councillors in February when they set the authority’s budget for 2024-25 – but was then scrapped two months later after extra funding was secured to freeze tax rates.

Argyll and Bute Council was one of only two Scottish local authorities to go against the pledge by the then First Minister, Humza Yousaf, at the SNP conference last October that council tax bills would be frozen across Scotland.

The other was Inverclyde, which, like Argyll and Bute, later reversed its move.

But a new report has warned that a 10 per cent tax rise may have to be considered again at next year’s budget meeting as the authority faces an anticipated £8.3 million budget gap.

And the same report warns that a 10 per cent increase would go less than half of the way towards plugging that gap, estimating the move would raise £3m.

The document also states that work is ongoing on full business cases for business parks in Helensburgh and Oban.

The report will go before the full council at its final meeting before summer recess on Thursday, June 27.

Executive director Kirsty Flanagan said in the report: “Some councils have already indicated that due to the council tax freeze in 2024/25 they are likely to increase council tax more significantly in 2025/26, some citing 10 per cent as an option.

“Within the mid-range budget outlook, five per cent has been assumed. Raising council tax by 10 per cent would generate a further £3m of income and this would be recurring.

“Officers are always giving consideration as to where were can be more commercial and raise income. The full business case for Oban Business Park is being developed, with opportunities for commercial income, and Helensburgh Business Park is also coming to a conclusion.

“Raising commercial income is not easy, and for Oban Business Park we are relying on TIF (tax increment financing) income and Levelling Up funding in order to make this a viable business proposition.

“Officers are also giving consideration as to opportunities for commercial income in respect of renewables.”

Ms Flanagan also stated that reductions in service, or changes to how services are delivered, may also be on the table, with work to take place over the summer.

She added: “There will inevitably have to be savings within services in order to balance the budget for next year and beyond.

“Senior management have been considering each service activity and have applied a savings target, where appropriate, to service activities relevant to the size of the service and whether the service is statutory or non-statutory.

“Officers will be asked to identify savings equal to this target over the summer with the intention that they will be reported to the budget working group in the first instance.

“Roads and infrastructure services are also part way through a thorough review of all service areas.

“Stage one of the process has concluded and we are moving onto stage two to test the outputs from stage one, and then stage three and four to develop a refined target operating model and a series of options to transform the service.

“Savings of £200,000 were agreed for 2024/25 and it is anticipated the further savings will be available for 2025/26 and in future years.

“We have commenced the procurement process to appoint external support for a review of all education service areas, in a similar way to the roads and infrastructure services review.

“It is anticipated that a nominal amount of savings could be delivered in 2025/26 with further savings in future years.”