Council Tax rise, Energy Price Cap rise, The Scottish Budget and Actions by The UK Labour Government – factors local and national which will have a significant impact on households and businesses in Orkney. Let’s take a closer look.
On Tuesday 25th February, Orkney Island Councillors, members of the Policy and Resources Committee, agreed to a 15% increase in Council Tax. The final decision will be taken by the full council next week, 4 March, on whether or not to go ahead with this jump in local taxation. It may not seem a lot to some people, taken on its own, as those councillors who voted for the 15% increase seem to think – but this rise comes at the same time as other costs which islanders are now facing.
Water bills in Scotland are set to rise by 9.9% in April which will equate to an average monthly household increase for water and wastewater services of £3.68 per month or £44 per year from April 1.
Energy bills are set to rise. Ofgem has announced that:
Between 1 April and 30 June 2025, the energy price cap is set at £1,849 per year for a typical household who use electricity and gas and pay by Direct Debit. This is an increase of 6.4% compared to the cap set between 1 January to 31 March 2025 (£1,738). The actual rates you are charged will depend on where you live, how you pay your bill and the type of meter you have. Get energy price cap standing charges and unit rates by region.
The levels for the next periods will be announced by:
- 27 May 2025 – period 1 July 2025 to 30 September 2025
- 27 August 2025 – period 1 October 2025 to 31 December 2025
- 25 November 2025 – period 1 January 2026 to 31 March 2026
It’s a bitter pill that Orkney has to swallow when the islands produce more than their own needs in renewable electricity and with new wind farm developments getting the go ahead. Quanterness Windfarm One Step Nearer
The price of your weekly shop is costing more. Food and non-alcoholic beverage prices rose by 3.3% in the year to January 2025, up from 2.0% in December 2024. (Office of National Statistics)
The Food Foundation has been tracking the rise in a basic basket of food since April 2022. Here’s what they found:
Since then, the woman’s basket of food has increased in price by 27.3%, now costing £52.13 per week. The male basket has increased by 28.6% (non-clubcard price) and currently costs £55.98 per week. This illustrates how though we may see lower rates of inflation, the reality for many is that the cost of food remains high.
And the report continues:
According to new modelling by the British Retail Consortium, food prices are forecast to increase by 4.2% on average in the latter half of 2025. This comes shortly after Labour’s autumn budget, in which increases to the national minimum wage and employer national insurance contributions were amongst the announcements
The UK Labour Government’s rise in employer national insurance contributions will have a profound effect upon charities and Third Sector organisations, many which provide valuable services in Orkney. These are a vital addition to what OIC can provide through its social services. Many people in the islands rely on the Third Sector to fill the gaps in the provision left when the council is unable to provide sufficient cover.
If the councillors in Orkney agree to introduce, and in some cases increase charges for services, this will further impact household budgets.
Charities will also be hit hard by the reduction in the UK Government’s International Aid budget as money is transferred from it to pay for an increase in military spending.
David Miliband, President and CEO of the International Rescue Committee, said,
“The UK government’s decision to cut aid by 6 billion in order to fund defence spending is a blow to Britain’s proud reputation as a global humanitarian and development leader. Today, an unprecedented 300 million people are in humanitarian need around the world. The global consequences of this decision will be far reaching and devastating for people who need more help not less.
Struggling with bills in Orkney it is understandable that your focus may be on your immediate daily needs and coping with those spiralling prices but our islands are not isolated from what happens globally, as we saw in two world wars. These are very uncertain times.
Fola Komolafe MBE DL, CEO of World Vision UK, commented:
“World Vision is one of the largest international children’s charity in the world. We’re helping one in four of those being helped by humanitarian aid, so are well placed to know the devastation these cuts by the UK will cause for children and families living in some of the world’s toughest places – those battling with drought, floods, hunger, disease and malnutrition.
“Moreover, we must remember that international aid and defence are intrinsically linked. Cutting one to fund the other will have challenging consequences as it will make the world less stable. “
The SNP Scottish Government’s Budget was passed on Tuesday 25 February with £21.7 billion for health & social care and more than £15 billion for local councils. It’s a budget that has a focus on trying to protect our NHS and social services, at the same time as providing support of £6.9 billion in social security, for around two million people in 2025‑26.
The knock on consequences of a rising cost of living is industrial unrest as pay packets feel the pinch. Given that in Orkney the council is the largest single employer, a rise of 15% in Council Tax, in addition to all those other larger household bills people have to pay, will mean that workers will demand a wage increase in line with the higher costs.
For the thousands of people in Orkney who are pensioners and who rely on the State Pension, £221.20 a week, times are going to be even harder.
Did Orkney’s councillors voting to increase council tax to 15% take all these other rising household costs islanders will be facing into account when they took their decision ? We will never know because so few of them engage directly with their constituents. Apparently they have based their decision on a recent survey conducted by the council which was responded to by 1,077 people. You can download a copy of that here:
Fiona Grahame