Concerns over “unsustainable” planned council tax rises as residents living in higher band properties “struggle with costs” are set to be reported to the Scottish Government.

Council officials have drafted a response to a Scottish Government and Convention of Scottish Local Authorities (COSLA) consultation on council tax, which is seeking views on increasing the amount paid by households in higher value properties.

The proposed rise would impact band E, F, G and H — affecting 25% of Scottish properties, but 57%, or 23,000 households, in East Renfrewshire, where more homes are in the higher bands.

Currently, £1.6m of council tax debt remains in East Renfrewshire for 2022/23 — and bands E to H account “for £0.5m (31%) of this debt”, around 500 households.

Under the proposals, it is expected the annual increase would be £139 in band E, £287 in F, £485 in G and £780 in H.

Money advice teams and Citizens Advice have experienced “a shift in customer demographics” due to the cost of living crisis, the council could tell the government.

There has been “increased demand from more affluent areas”, with an increase of 33% between 2021/22 and 2022/23 in Giffnock and 40% in residents from Newton Mearns.

East Renfrewshire councillors will be asked to approve the response on Thursday.

In the draft, the council stated residents in higher banded homes do “not necessarily” have “higher levels of disposable income”.

Officials reported council tax collection in East Renfrewshire has been “challenging” recently and while property values have increased over time, incomes “have not kept pace with this”. 

“Many increases in income have been negated by inflationary increases in pricing of daily goods and services,” the response added.

“Increases in interest rates are having a detrimental impact on many mortgage holders, and there is potential for a reduction in property values due to stress on the housing market, although prices (and hence mortgages) in East Renfrewshire remain high.”

Money advice teams have also seen an increase in clients from working households, with “the biggest increases from the traditionally affluent areas”.

They are “concerned that a large increase in council tax will be unsustainable for a large number of residents”, officials have reported.

“The teams experience residents who are asset-rich, but cash poor, particularly among pension-age residents with a fixed income. Residents living in properties in higher bands are often struggling with costs. They are facing higher mortgage payments and utility charges.

“There are also families living in higher band properties where one of the partners cannot work due to health issues, or caring for family members and are on a tight budget.”

Council officials have said the proposed changes would provide extra funds for public services but would limit the council’s own local decision-making on future increases.

They expect an additional income for East Renfrewshire Council, assuming a 98% collection level, of £6.5m, but added only £3.3m would be retained as the remainder would be “redistributed to other councils via the general revenue grant distribution methodology”.

A council report concluded: “While the proposed changes to council tax are expected to deliver additional income to fund council services, the additional income is not anticipated to fully benefit local residents and services within East Renfrewshire. 

“Local decision-making on Council Tax levels is likely to be impacted, as are customers already struggling to pay Council Tax bills. Reduced levels of council tax collection are anticipated and additional demand for support from council and external services is expected.”