Council budgets in Scotland ‘could be cut by £700 million’, says new report

Council budgets could be cut by £700 million by the end of the current Parliament, according to a new report.

The study, commissioned by the Scottish Local Government Partnership (SLGP), found that local authorities have suffered more than £1 billion of cuts over the past five years and could face further reductions.

Council chiefs said that local authority finances are in “meltdown” as they face “crippling cuts” and called on First Minister Nicola Sturgeon to give councils the money they need to deliver crucial services.

The report was carried out by economic think-tank the Fraser of Allander Institute ahead of the Scottish Government’s Budget this week.

SLGP convener Jenny Laing, who is also leader of Aberdeen City Council, said: “The First Minister has tried to pull the wool over the eyes of the Scottish people by claiming that the funding settlements for local authorities have remained roughly the same over the past five years, but this report shows that this simply isn’t true.

“Local government finances are in meltdown as the Scottish Government piles crippling cuts onto councils while expecting us to deliver the same critical services for ordinary hard-working families.

“Furthermore, ministers are using a funding formula which hasn’t changed since 2008. With all the drastic reductions, it’s clear that this system is not fit for purpose and needs to be reviewed urgently.

“The SNP Budget this week will heap more pain on to local government – but it’s the ordinary folk of Scotland who will ultimately suffer.”

The SLGP consists of Aberdeen, Glasgow, Renfrewshire and South Lanarkshire Councils.

The report found that revenue funding to councils has declined by around 10% – or £1.1 billion – in real terms between 2010/11 and 2016/17 on a like-for-like basis.

And it claims that local authorities could face a spending reduction of up to £700million by 2020/21.

It states: “In its 2016 Manifesto, the SNP made three high-profile spending commitments. These were: to increase NHS spending by £500 million more than inflation by 2021/22; to maintain police spending in real terms; and to significantly expand the provision of free childcare, resulting in an additional £500 million spending on childcare by 2020/21.

“Assuming that these commitments translate into actual spending priorities when the Scottish Government publishes its Draft Budget on 15th December, the implication for remaining ‘unprotected’ portfolios is likely to be substantial.

“Within the context of a budget that is falling by 3% in real terms, these policy commitments will imply that unprotected portfolios will face cuts of 10% (3.5% per annum) on average. In the context of the local government resource grant, a cut of 10% is equivalent to just under £700 million.”

The report is the first part of a two-part commission.

The second half, entitled ‘Fiscal Issues Facing Local Government in Scotland’, will be delivered early next year.

A Scottish Government spokesman said: “Audit Scotland last week published their independent report into council finances and found that local government had experienced the same reduction in funding as was imposed on the Scottish Government by Westminster. It is therefore clear that local government has been treated very fairly despite the cuts to the Scottish Budget from the UK Government.

“Local government finance settlements were maintained in Scotland on a like for like basis over the period 2012-16 with extra money for new responsibilities resulting in total settlements of £10.8 billion in 2014-15 and of over £10.85 billion in 2015-16.

“Taking into account the addition of the £250 million to support the integration of health and social care, the overall reduction in 2016-17 funding equates to less than 1% of Local Government’s total estimated expenditure in 2016-17. We remain committed to engaging COSLA in further dialogue on a range of issues.

“The Finance Secretary will publish the Scottish Draft Budget later this week that will support our economy, tackle inequality and provide high-quality public services for all.”

Scottish Labour deputy leader and local government election campaign manager Alex Rowley said: “Scotland’s councils are giving a very clear message to the SNP: no more cuts.

“Last year the SNP government cut funding to local government by half a billion pounds. That was a decision made in Edinburgh by an SNP Government. There’s no muscle or fat for the SNP government to cut any more from our councils. The next set of cuts they make, in the Scottish budget on Thursday, look set to go straight to the bone.

“These cuts will impact on the lives of families across the country – from our children’s schools to social care for our elderly.

“That is why Labour will propose amendments to the Scottish budget, to use the new powers of the Scottish Parliament to stop the cuts. If SNP MSPs reject our amendments, if they carry on the cuts to services which our poorest rely on, then they are no better than the Tories.”

Council funding cuts would be ‘disastrous’, ministers warned

The head of an umbrella body for Scottish local authorities has warned further cuts to council funding would be “disastrous”.

Speaking ahead of a special council leaders’ meeting on Tuesday, David O’Neill, president of the Convention of Scottish Local Authorities (Cosla), urged the Scottish Government to preserve funding at this week’s budget.

He said “a cut of the magnitude of last year’s £349 million would have a disastrous impact on both communities and services”.

“All too often when we talk of cuts to local government these are seen in the abstract. The reality is that we are talking about real cuts to services and jobs,” he added.

“The simple truth is that a cut to local government means a cut in teaching assistants, a cut in levels of care for all our elderly relatives, cuts for the homeless as a freezing winter starts to bite and cuts to gritting of the roads at a time of freezing temperatures when trains and the wider transport network is struggling to cope.”

Mr O’Neill continued: “Make no mistake, the Scottish Government has a political choice here and with additional cash of £418 million for next year there should be no cut to local government.”

The Government is due to announce the local government revenue settlement funding for councils on Thursday along with the budget.

A Scottish Government spokesman said: “The Finance Secretary will publish the Scottish Draft Budget next week that will support our economy, tackle inequality and provide high-quality public services for all.

“Local government has experienced the same reduction in funding as was imposed on the Scottish Government by Westminster – as outlined last week in an independent report from Audit Scotland.

“It is therefore clear that local government has been treated very fairly despite the cuts to the Scottish Budget from the UK Government.

“Local government finance settlements were maintained in Scotland on a like-for-like basis over the period 2012-16, with extra money for new responsibilities resulting in total settlements of £10.8 billion in 2014-15 and of over £10.85 billion in 2015-16.

“Taking into account the addition of the £250 million to support the integration of health and social care, the overall reduction in 2016-17 funding equates to less than 1% of local government’s total estimated expenditure in 2016-17.

“We remain committed to engaging Cosla in further dialogue on a range of issues.”

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