Edinburgh Council Tax Rises 4% in Lib Dems-Tories Deal Edinburgh 2026

Key Points

• Edinburgh City Council approved a 4% council tax increase after Labour administration struck a deal with Liberal Democrats and Conservatives at Thursday’s budget meeting on 26 February 2026.
• The rise represents a reduction from a projected 5% increase, achieved through one-off funding from last year’s underspend.​
• New rates effective from 1 April 2026: Band D properties to £1,626.05 annually (£62.54 increase from £1,563.51); Band B (most common) to £1,264.70 (£48.64 rise); Band H to £3,983.82 (£153.22 increase).​
• Conservatives secured a freeze on pay-and-display parking rates and commitment for talks with Lothian Buses on resuming dividend payments, paused since the pandemic.​
• Labour minority administration relies on Conservative and Lib Dem support to govern.​
• Finance Director Richard Lloyd-Bithell, compelled by SNP leader Cllr Simita Kumar, warned that a rate below 5% may necessitate future savings, tax hikes, or alternative income sources, aligning with Accounts Commission advice.​
• Labour Cllr Mandy Watt hailed it as likely Scotland’s lowest increase, with no service cuts, prioritising citizens and renters.​
• SNP’s Cllr Simita Kumar labelled the Labour-Tory deal “grubby,” claiming it included last-minute cuts and rejected SNP proposals on homelessness and poverty.​
• Council leader Cllr Jane Meagher highlighted £1.6bn capital investment for housing, aiming for 2,500 new homes over five years.​
• Conservative group leader Cllr Iain Whyte called 4% a compromise from their proposed 2.5%, vowing to scrutinise value for money.​
• Green co-leader Cllr Kayleigh Kinross-O’Neill expressed disgust at Labour-Tory pact, noting rejection of Green plans to cap council tenant rent rises (£100-£200 savings per tenant) and tackle rogue landlords.​
• Initial positions: Labour, Lib Dems, SNP backed 5%; Greens sought 6%; contrasts last year’s 8% rise.​
• Among Scotland’s lowest hikes; Fife at 5%, Aberdeenshire/Moray at 10%.
• Council underspent £60m on housing/homelessness last year.​

Edinburgh (Edinburgh Daily News) February 27, 2026 – Edinburgh City Council has approved a 4% rise in council tax following a cross-party deal between the Labour administration, Liberal Democrats, and Conservatives at a budget meeting on Thursday, reducing an initial 5% proposal. The increase, effective from 1 April, will add £62.54 annually to Band D households, marking a compromise amid fiscal pressures. This decision underscores the minority Labour government’s reliance on opposition support.

What Deal Did Labour Strike with Lib Dems and Conservatives?

Labour, lacking a majority, secured backing from the Liberal Democrats and Conservatives to pass the budget. As reported by STV News East Central, the agreement trimmed the council tax hike from 5% – as initially recommended by officers and supported by Labour, Lib Dems, and SNP – to 4%, funded by one-off underspend from the previous year.​

The Conservatives gained a freeze on pay-and-display parking charges and a pledge to initiate discussions with Lothian Buses about reinstating dividend payments, which ceased during the pandemic. Conservative group leader Cllr Iain Whyte stated:

“We did not get everything we wanted today. But Edinburgh residents can be reassured that the Conservative Group fought hard to keep their bills as low as possible. And that we will continue to hold this administration to account on delivering value for money from every pound of taxpayers’ money.”​

Cllr Whyte described the 4% as a “compromise” from his group’s proposed 2.5% rise, the lowest among parties.​

Why Was the Tax Rise Reduced from 5%?

The 1% cut relied on “one-off” funding from prior underspends, including £60m unspent on housing and homelessness services – a point of contention, with Glasgow’s housing convener offering to take the funds. Finance Director Richard Lloyd-Bithell cautioned against it.​

Compelled under council rules by SNP group leader Cllr Simita Kumar – where any councillor can request the Section 95 officer’s view – Mr Lloyd-Bithell warned: setting the rate below 5% could require ‘savings’, council tax increases, or efforts to find other sources of income in future years. He added that his advice aligned with that of the Accounts Commission, which audits Scottish local authorities.​

This echoes earlier draft budget projections of 5%, as covered by Local Democracy Reporter Joe Sullivan in Midlothian View on 18 February 2026, noting rises for Band B to £1,094.46 (pre-final adjustment) amid above-inflation pressures post last year’s 8% hike.​

How Will the Increase Affect Taxpayers?

From 1 April 2026, impacts vary by band:

• Band B (most common): £1,264.70 yearly, up £48.64 from £1,216.06.​
• Band D: £1,626.05, up £62.54 from £1,563.51.​
• Band H: £3,983.82, up £153.22 from £3,830.60.​

Labour Cllr and Finance Convener Mandy Watt defended it, saying:

“This is likely to be the lowest [council tax] increase by any local authority in Scotland. We must do what we can for our citizens, our private renters paying council tax on top of their rent. There are no cuts to services in this budget.”​

This follows an 8% rise last year and comes amid national trends; BBC News reported on 26 February 2026 that Edinburgh’s 4% is among Scotland’s lowest, with Fife at 5% and Aberdeenshire/Moray at 10%.

What Warnings Did the Finance Director Issue?

Richard Lloyd-Bithell, Director of Finance and Procurement, provided statutory advice when requested by Cllr Kumar. He emphasised risks of the lower rate, potentially forcing future austerity or hikes, consistent with Accounts Commission guidance.

His input highlights ongoing fiscal strains, with councils regaining control post the 2024-2025 Holyrood freeze.​

What Do Opposition Parties Say?

SNP’s Cllr Simita Kumar criticised the “grubby” Labour-Tory-Lib Dem pact, alleging “last minute cuts” and dismissal of SNP proposals on homelessness and poverty:

“The SNP put forward positive proposals aimed at tackling homelessness and alleviating poverty. But the usual combination of Labour, Tories and the Lib Dems once again voted through the regressive proposals.”​

Green co-leader Cllr Kayleigh Kinross-O’Neill, whose group backed 6%, said she was “disgusted,” lamenting rejection of costed plans to limit council tenant rent rises (saving £100-£200 yearly per tenant) and strengthen action against rogue landlords.​

Council leader Cllr Jane Meagher countered positively, celebrating £1.6bn capital housing investment for 2,500 new homes over five years.​

How Does This Compare to Previous Years and Other Councils?

Edinburgh’s 4% contrasts sharply with 2025’s 8% – among Scotland’s steepest then. Nationally, it’s modest; BBC noted nine councils set budgets Thursday, with extremes at 10%.

New bands I (£1m-£2m homes) and J (over £2m) arrive April 2028. A 5% tourist tax from July 2026 targets £50m yearly from overnight stays.​

What Other Budget Highlights Emerge?

No service cuts, per Labour, with frozen fees where possible – as Cllr Watt told Local Democracy Reporting Service pre-budget. Housing underspend scrutiny persists, alongside Lothian Buses talks.

The deal navigated a fragmented council: Labour minority, SNP opposition, Greens progressive, Conservatives fiscal hawks, Lib Dems pivotal.​