COUNCILS could be forced into making large tax hikes as budget pressures leave them “struggling to meet their statutory obligations,” according to Holyrood’s finance committee today.

In the committee’s latest report on the Scottish government’s draft budget for 2026-27, it expressed “significant concerns” over the state of local government finances and warned “large council tax rises” could be the offing in the coming weeks.

Pointing to ministers’ claims that councils would see a 2 per cent cash boost, the report warned: “There are questions around the accuracy of this figure.”

The cross-party committee also used its final report before May’s elections to reiterate its call for “greater transparency” from the Scottish government on spending, after the Institute for Fiscal Studies think tank complained that its budget paper “continues to bury the most appropriate spending figures in an annex.”

Concerns were also raised over what constituted “new money” or money diverted from other budgets.

The committee recommended “that the Scottish government makes absolutely clear in future budgets what elements of funding is ‘new money,’ to provide certainty for public bodies and local government, and avoid the unhelpful and unnecessary confusion that has occurred this year.”

Finance committee convener SNP’s Kenneth Gibson said: “Frustratingly, some cross-party concerns set out in this report have been raised before with the government during this five-year session of Parliament — including issues of financial transparency, which have only been partly addressed.”

Finance Secretary Shona Robison responded: “Our spending plans provide help for hard-pressed families and businesses alongside investment in public services and infrastructure, and we will continue to seek to work constructively to ensure the budget passes.

“We welcome all parliamentary scrutiny and will carefully consider the committee’s report.”