The SNP group on Edinburgh Council say that agreement over the £1.5 billion deal leads to doubts on its financial sustainability.
Their concerns stem from the statement by the council’s finance director, Richard Lloyd-Bithell, over the details of the spending plans for the next year.
Mr Lloyd-Bithell said during the meeting: “Under my duties as the Council’s Section 95 Officer in terms of the Local Government (Scotland) Act 1973, I am required to advise Members on the robustness and sustainability of the budget.
“Reducing the proposed Council Tax increase from 5% to 4% using one off funding is competent, provided the Council sets a balanced budget for the coming year.
“However, I must advise that doing so could reduce the Council’s recurring income base and increase the scale of savings required in future years. Accordingly, future years’ budgets may need to consider additional savings, council tax increases or other forms of income generation to balance future budgets,
“As previously advised (9 December 2025) my formal advice has to be that I do not recommend this course of action from a financial sustainability perspective, and this aligns with advice from the Accounts Commission.
“However, using one off funding in this manner is technically competent and is ultimately a matter for Members.”
Council tax increase in Edinburgh
The budget will be funded by a 4% increase in council tax rather than 5% as council officers recommended.
Some of the spending – around £3 million out of a total of £1.5 billion spending – will come from the council’s reserves.
The SNP presented an opposition budget which had an extra £3 million allocated to homelessness support. This would have paid for a new Homelessness Prevention Payment Fund – to help homeless households get into private tenancies – and a new rough sleeping prevention team.
SNP councillors argued that these measures would have bridged the gap between the immediate homelessness crisis and the point at which council officers’ medium-term investment in building and buying housing started to yield results. They argued that the £3 million was a result of the Labour administration’s failure to obtain additional temporary accommodation following the loss of 500 unlicensed HMO units which were found to be illegal in autumn 2024. The council has said they are putting homes back into general stock at a higher rate than they were previously.
The SNP also argued that this investment would save the Council money on procuring expensive private temporary accommodation, while speeding up an end to the freeze on council house allocations (currently set to continue until March 2027). However, Labour, Conservative and Liberal Democrat councillors voted down these proposals in favour of their deal.
The SNP group also claim that the final deal included £700,000 of “unidentified Conservative service cuts”. No SNP or Green proposals were included in the final version of the budget.
SNP group leader Simita Kumar said: “Not only have the Labour administration done yet another grubby deal with the Tories, that sneaks in last minute cuts, their budget deal prompted an extraordinary and unprecedented invervention from the Council’s Finance Director that both he and Audit Scotland view as steering Edinburgh’s finances towards the rocks, and likely baking in future cuts vital public services, as well as tax rises.
“On top of that, they used millions of pounds that had originally been earmarked to provide accommodation for homeless families to fund lower taxes that will benefit some of the wealthiest people in this city.
“In contrast, the SNP put forward positive proposals aimed at tackling homelessness and alleviating poverty. But the usual combination of Labour, the Tories and Lib Dems once again voted together to block these.”
