EXCLUSIVE: The SNP-led administration is considering taxing and borrowing more to fill a near £50m black hole partly caused by a rise in homelessness.
The City Chambers in Glasgow
Cash-strapped Glasgow council is considering borrowing £30m and hiking council tax by 5% to tackle the refugee homelessness crisis. The local authority is in talks with the Scottish Government about a controversial budget plan to fill a near £50m funding black hole.
Labour MSP Monica Lennon: “These drastic plans are a damning indictment on the SNP Government, which for nineteen years has starved Glasgow of funding and imposed austerity on our city.”
The city council is facing a huge overspend this year fuelled by rise in costs for providing temporary housing for homeless people. Senior figures in the SNP-led administration in Glasgow say the challenges have been caused by the Home Office policy of closing asylum hotels.
They say closures have led to refugees becoming homeless and making applications for assistance in Glasgow. Councillors are mulling over the looming budget for 2026/27 and plans are set to be revealed soon.
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It is understood the funding gap is between £40m and £50m and a series of controversial options are on the table. A 5% council tax rise is being planned which would reduce the deficit to around £37.5m.
Such a rise, in the teeth of an ongoing cost of living crisis, would be higher than the current 3.4% rate of inflation. A 5% council tax rise would see a Band C bill jump from £1432 to £1503 and a Band D bill from £1611 to £1691.55.
The council, led by Nationalist councillor Susan Aitken, is also in discussions with the SNP Government about using their General Capital Grant to deal with the day-to-day funding pressures on homelessness.
In practice, this would mean the council borrowing around £30m on a one-off basis – a move that requires SNP Government approval.
A record 9,215 people were living in temporary accommodation in Glasgow in January, including 3,357 children.
Nearly 2,000 refugees with the right to remain were living in either hotels or bed and breakfasts at this point.
Although the council blames the Home Office for refugee pressures on the homeless system, critics of the local authority point the finger at the SNP Government.
They claim liberal housing laws have made Glasgow a magnet for people whose asylum claims have been approved.
A pre-devolution law allows refugees granted leave to remain in other parts of the UK to declare themselves homeless in Glasgow.
The SNP Government has also been blamed for the crisis by allegedly starving councils of resources.
Lennon, who is standing to be a Labour candidate on the Glasgow regional list for Holyrood, said:
“Borrowing money and jacking up council tax is the wrong way to address the homelessness crisis.
“John Swinney needs to provide an emergency funding package for Glasgow, invest in a mass housing programme, and commit to a long-term funding deal to reverse nearly two decades of damage.
“Scottish Labour will stand up for Glasgow and ensure its citizens do not pay for the mistakes of this failing SNP Government.”
A council spokesman said: “The city’s most significant budget pressure at the moment is an overspend on homelessness services, as a consequence of UK Home Office decisions and procedures.
“The City Government has sought talks with both the UK and Scottish Governments about this – and discussions with Scottish Ministers are ongoing.”
