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Fife Council has delivered its strongest hint yet that it is set to defy the Scottish Government and raise council tax from April.

If Fife was to reject the freeze and choose to increase council tax to provide additional funding for services, the Scottish Government would impose a penalty by withholding £4.6 million in grant to the local authority.

But with Fife facing the prospect of having to make around £91 million of savings over the next three years and also meet a £50 million equal pay liability, Fife’s Labour administration say a council tax rise would bring in some much-needed cash to minimise the impact on services and jobs.

Draft budget proposals have now been published, which will now go out to consultation, highlighting that a 7.51% increase would bring in over £7 million after the Scottish Government penalty is taken into account.

Those figures are only indicative at this stage, but if pursued it would cost the vast majority of households under £2 per week.

Weekly increases would range from £1.08 per week for Band A properties to £3.23 a week for Band H properties.

Fife’s political groups will now go away and study the full range of budget proposals put forward before a decision is taken on February 11.

Council leader David Ross stressed: “In summary, we are facing a hugely difficult financial situation, both next year and over the next three years.

“It isn’t in tablets of stone, it’s for the basis of consideration over the next few weeks and I hope we can have that debate in a reasonable and responsible manner.”

The Scottish Government offers local authorities a share of £70 million for signing up to the council tax freeze, although Mr Ross revealed he “cannot sign up” to that package as things stand.

The news comes after the Commission on Local Tax Reform concluded that the current council tax system in Scotland “must end”.

The cross-party body believes any new system should continue to be one of “general tax” rather than a “system of charges for specific services”.

For more on this story, see Wednesday’s Courier.