Cosla at odds with Holyrood over one-year budgets

Scotland’s local councils are facing a new cash crisis as Holyrood imposes a budget on them that will leave them with a £630 million shortfall, according to a document leaked to The Herald.

They have also been told the deal is non-negotiable and for one year only instead of the usual three-year-cycle, which they say makes it difficult to plan ahead.

To match this year’s settlement, the councils required around £12.256bn next year from the Scottish Government – an increase of £270m. However, following this week’s spending cuts they are expected to get £11.626m in 2011/12 – a drop of £630m.

The confidential briefing by local authority body Cosla, leaked to The Herald, reveals a mounting sense of anger with ministers.

The relationship between the councils and the Government was already nearing breaking point as the Government plans to continue the council tax freeze while local authorities want it to end. It has now plunged to new depths as Finance Secretary John Swinney and his officials also tried to gag negotiators from Cosla briefing their own councils until he announces the details in his budget next month.

The £630m funding gap facing the councils is roughly the same as the total annual budgets for Fife, North Lanarkshire and South Lanarkshire, Scotland’s third, fourth and fifth largest local authorities, all with populations in excess of 300,000 and workforces of about 15,000.

Cosla says the shortfall and the fact that it is only a one-year deal raises questions over commitments to police numbers, teachers and education and social care as well as the council tax freeze.

The Cosla document says there had been no suggestion of limiting the settlement to one year during months of talks and asks if it is a “deal-breaker”.

It says: “It is non-negotiable and you have to consider whether this in itself is enough to reject a deal?”

Cosla’s expectation was for a three or four-year budget based on the Comprehensive Spending Review and figures the Scottish Government was receiving from Westminster.

It says their tactics would have been different had they known it was for a single year, and adds: “The fact that it was always difficult to get John Swinney and others to focus on the medium to long-term policy review areas may have been a hint that the Scottish Government was consciously aware throughout that they would be giving a one-year deal. As group leaders you may wish to question why this was never raised during the series of private discussions.”

The briefing also questions the Government’s attempt to make it a confidentiality issue. “As group leaders representing 32 councils, you have to ask whether it is appropriate as the main negotiators for you to not advise councils of this issue immediately,” it says.

The document also reveals Cosla arguing to maintain its share of the block grant at present levels but fearing it could be hit by a further reduction of £108m because of structural changes to managing expenditure.

It sets out specific commitments wanted by the Scottish Government, including continuing the council tax freeze and maintaining police officer numbers.

It warns that the commitments are difficult to cost but says that was always a difficulty with previous commitments in the Concordat and “you would not want to get into a similar position where costings are vague”.

On the council tax it says: “You will have to consider whether you can commit to a further year of a freeze and whether it is such a priority for the Scottish Government that they are prepared to move on any of the other commitments in order to get this through and whether financially it is worth agreeing to this to ensure share.”

It acknowledges there is pressure to maintain police numbers but warns that it creates long-term financial obligations and “given that this is a one-year deal we will need to be very wary as to any commitment we would be giving”.

The sticking point of the 12-month settlement also emerges in a section on education and teachers, which it says were the most contentious issues in the Concordat.

A spokesman for Mr Swinney said: “The SNP Government has delivered a rising share of our budget to local government, and we are currently discussing with Cosla colleagues in the appropriate and proper way the best possible settlement for next year, in the context of massive cuts to Scotland’s budget from Westminster.

“The Scottish Government’s partnership approach and intentions are in stark contrast with the nightmare scenario facing local government in England, where central government grants to councils are to fall by a staggering 28% over the spending period.”