Who wouldn’t want to see their council tax frozen when household bills are rising? That was the cunning idea that inspired Humza Yousaf’s surprise announcement at his party’s annual conference. Nicola Sturgeon’s continuity candidate seemed to be trying to encapsulate a little of Alex Salmond’s ‘back to the future’.

It wasn’t just opposition politicians and delegates at the SNP conference in Aberdeen who were taken by surprise. Even the First Minister’s Cabinet colleagues were in the dark with the usually well-illuminated Justice Secretary Angela Constance revealing on television at the weekend that she was out of the country when she heard. She joins a long list of those impacted by the First Minister’s mushroom management style, including councils, the Convention of Scottish Local Authorities (Cosla), and the SNP’s coalition partners in the Greens, who were all similarly blind-sided.

But in a nationalist undergrowth that is usually still, things are stirring. SNP councillor Shona Morrison, the Cosla leader, has expressed her extreme disappointment that council leaders were not advised by the First Minister of his decision. On Sunday, the former SNP Health Secretary, Jeane Freeman, felt the need to come out of retirement to say she could not support the freeze.

It is likely to be a popular move with taxpayers, but it does represent a significant shift in the SNP’s approach to local government finance. Only a few weeks ago, the consultation closed on SNP proposals to hike council tax rates for all properties in band E and above to raise additional revenue for councils.

Now it looks like that particular plan has been consigned to the overflowing trash can of policies left over from Nicola Sturgeon’s time in office. Humza Yousaf is becoming accustomed to welching on the prospectus that got him elected as SNP leader.

The unanswered question here for the rest of us is how all this will be funded. The devil is not in the detail on this one, it is like a neon sign in the headline. If councils had been proposing average council tax rises of five per cent next year, to fully fund the shortfall in their finances, it will cost in excess of £400 million. That’s a lot of money to be found and might not even cover the rising costs facing local authority budgets across the country.

In my own area of Perth and Kinross, the council is already closing down public toilets, reducing opening hours at recycling centres, and despite this faced a budget black hole – even before the council tax freeze announcement – of some £12 million. There are real concerns that swimming pools and leisure centres are going to have to close. This is a pattern we see repeated right across Scotland, with what people rightly see as essential services under real threat.

Freezing the council tax might be a hit with billpayers but not service users. Unless there is a substantial injection of additional cash from the Scottish Government, few will forgive the SNP for delivering cuts. But Humza Yousaf is a man who keeps digging when he is in a hole.

The Scottish Government already faces a £600 million black hole in its budget for the coming year, due to the relative underperformance of the Scottish tax base compared to the UK average. Add in the £400 million pounds for the council tax freeze, and the £100 million a year also announced at the SNP Conference to cut NHS waiting lists, and that’s well over £1 billion that the Finance Secretary needs to find. Not even SNP treasurers are that creative.

There are only two possible sources for that cash – cuts elsewhere in the Scottish budget, or income tax rises. The announcement of a council tax freeze might well signal a change of direction in the approach to tax from the First Minister, and one which would be very welcome.

Every time I meet representatives of the business community, the first issue they raise with me is their concern that differential tax rates in Scotland, making us the highest-taxed part of the UK, are a barrier to attracting talent to live and work here. These same businesses are concerned about potential rises in business rates in the coming budget. Because business rates – already at a 24-year high – are tied to the rate of inflation, they could increase by an extra £205 million in the next financial year.

And businesses in the retail, hospitality and leisure sectors have still not forgiven the SNP administration for not matching the 75 per cent relief currently enjoyed by their counterparts south of the Border. If the First Minister is serious about his New Deal for Business, it is hard to see how he can justify hiking business rates whilst council tax rates are frozen.

All this leaves the Scottish Government with just one option, which is to make cuts. In the past, it has always been local government that has been the whipping boy of successive SNP Finance Secretaries, as they hike spending on NHS and welfare. There is little wonder, therefore, that it is those in our councils who watch with horror the announcement of a council tax freeze, in the expectation that they will be the ones who will have to bear the pain.

With a commitment to “progressive taxation” seemingly now abandoned, and yet spending commitments continuing to grow, any reasonable observer would have to conclude that we have a financially illiterate SNP administration. All will be revealed when the Scottish budget is published in December. As it stands, I doubt that day will provide much pre-Christmas cheer – think Scrooge before the redemptive dreams.

The First Minister is like the householder who refuses to open the bank statements telling him he is overdrawn – but still can’t help fingering the campervan brochures.

Murdo Fraser is a Scottish Conservative MSP for Mid-Scotland and Fife

Council tax freeze and big spending pledges suggest budget will have to make massive cuts – Murdo Fraser

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