John Swinney's 'same again' cash share-out brings threat of rebellion

Published on Thursday 26 November 2009 21:40

ALEX Salmond is facing a rebellion in his own political backyard of north-east Scotland that could prompt an unravelling of his government's concordat with councils.

• Finance secretery John Swinney

Senior councillors in Aberdeen, an authority run by the Liberal Democrats and the SNP, are openly discussing walking away from the Convention of Scottish Local Authorities (Cosla) after finance secretary John Swinney opted not to change the way money is distributed in Scotland to give them a fairer deal.

And the SNP's own chief whip in Holyrood, Brian Adam, attacked the decision to provide no help for the cash-strapped council, which had to make 50 million cuts in 2008.

He said: "People in the North-east, including myself, will be bitterly disappointed that this review of the distribution formula has in essence seen no change to the way money is shared between local authorities."

The funding formula is based on social need, using a range of indicators.

Mr Swinney said he accepted the findings of Cosla, which represents all 32 councils, that "the existing indicators were considered to be reasonable and generally a fair indication of need and be retained unchanged."

This means that councils such as Aberdeen, Edinburgh, Aberdeenshire and Perth and Kinross will continue to receive about 800 less per person than Glasgow, which is at the top of the scale. A promised fund of 3m for the North-east councils has also failed to materialise.

Mr Adam's comments were seized on by political opponents.

Labour's local government spokesman, Michael McMahon, said: "The SNP's internal discipline is crumbling before our eyes. Their chief whip, Brian Adam, is absolutely right to be bitterly disappointed by his government's treatment of Scottish local authorities."

The anger has added to the sense of disquiet among councils following the onslaught on the Scottish Government by Glasgow when Mr Swinney announced he would cancel the airport rail link. Labour accused the SNP of "ripping Glasgow off" and the issue featured in Labour's victory in the Glasgow North East by-election.

The row comes as councils look to next year when the concordat – an agreement between councils and government to freeze the council tax and give councils more flexibility on spending money – comes to an end.

The 70m for a council tax freeze has been included again and will mean it probably will be repeated in 2010-11, but many local authority leaders privately believe a new deal that includes a council tax freeze will be difficult to strike because of a lack of funds.

Aberdeen's anger is understood to be almost matched by Edinburgh City Council, which, along with Aberdeen, is at the bottom of the distribution table because it is perceived to be better off. However, its problems are slightly alleviated by the capital city fund and extra money for social housing won in the past two budgets by the Lothians Independent MSP Margo MacDonald.

But council leaders were nevertheless warning last night that the money for next year's budget will mean cuts. Phil Wheeler, Edinburgh council's convener of finance and resources, said: "This is further confirmation for Edinburgh that we no longer have the money to continue running services in the same ways that we do at present."

Aberdeen city council leader John Stewart said voters in the North-east would "feel betrayed".

Mr Stewart said: "I can't rule out Aberdeen walking out of Cosla, although clearly there are other things we want to try first and it would be a decision for the whole council, not just me. But in the end we have to look at whether we are getting value for money for our Cosla membership."