Kate Forbes says row over £155m for councils is 'storm in teacup'

Scotland's finance minister has said a row over a £155m coronovirus financial boost due to local authorities is a “storm in a teacup” as she was accused of “micro-managing” budgets and stoking a “war” between councils.

Kate Forbes has been accused of micro-managing council budgets.
Kate Forbes has been accused of micro-managing council budgets.

Kate Forbes told MSPs it was up to Cosla to decide how UK government money should be allocated to Scotland's 32 local authorities and she was awaiting its guidance, as she was put under pressure by opposition MSPs about why the cash had not been delivered directly to councils.

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And she said opposition demands the cash be paid out immediately were a “storm in a teacup”.

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The £155m has come to the Scottish Government through Barnett consequentials after the UK government increased its financial support for local authorities in England. However the money has yet to reach Scottish councils and Ms Forbes last week told council leaders to use financial reserves to deal with an increased demand on services.

Scottish Labour’s Sarah Boyack said Ms Forbes was “micro-managing” council budgets and said local authorities were “increasingly unhappy with the lack of support they've received”.

But Ms Forbes hit back, saying: “This appears to me as a storm in a teacup. My letter made clear I was awaiting confirmation of funding from local authorities in terms of their need, that was an agreed position with Cosla. I’ve agreed we will pass on that funding in full, but Cosla should inform how that money is allocated, not members in this chamber.”

Ms Boyack later said that Ms Forbes should “apologise” for her comments which smacked “of arrogance” and “an almost wilful ignorance of the tremendous pressure councils are under.”

“She did not acknowledge that telling local authorities to use their reserves while she decides how to allocate these consequentials will lead to uncertainty and will not help cash-strapped councils who have had to deal with years of SNP underfunding. Scotland’s Councils are no longer asking for the funding they need, they are demanding it.”

At Holyrood Scottish Conservative Graham Simpson also demanded to know when councils would receive the cash, and he refuted a claim by Ms Forbes that she was waiting for a “cost exercise” to be completed by Cosla.

He said: “The cost collection exercise started at the start of April, templates were sent to council finance officers on April 6, 12 days before Robert Jenrick’s windfall to English councils was announced, so it’s got absolutely nothing to do with the consequentials whatsoever. Can the Cabinet Secretary not accept there’s no link between the two and councils should be given the money full stop?”

Ms Forbes said that she was “happy to confirm again” that the money would be passed on to local government “in full” and said the Scottish Government had also committed to provide £175.6m to local government, including £50m for the hardship fund, £45m to top up the Scottish Welfare Fund, £30m for a food fund and £50m for the council tax reduction scheme and a social security top up.She added: “Cosla agreed in a meeting with me over a fotrtnight ago they would supply details on cost pressures and that information is still awaited, it’s absolutely right that that information from councils informs distribution methodology to ensure we support the areas of greatest need.

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"It’s highly irresponsible to be allocating money without carrying out necessary analysis to understand where councils need it most. ”

However Mr Simpson said she was stoking a “war” between councils. “It sounds to me like the Cabinet Secretary wants to decide herself how that money is allocated. If that’s not the case will she, as she should do, use the normal distribution model that councils use because failing to do that will lead to a war between councils and a battle within Cosla and she’d be best to avoid that.”

Ms Forbes said she’d rather hear from Cosla how funding should be allocated.

Councillor Gail Macgregor, Cosla’s resources spokesperson said the decision to pass the £155m in full to councils was a positive step in the right direction.

“We look forward to engaging with Kate Forbes to get this money to councils quickly,” she said. “Scotland’s councils are doing a heroic job in keeping a huge range of essential services running to meet the needs of communities and to be responsive locally.

“The costs to local government in dealing with this pandemic and coping with the loss of income are going to be substantial. Cosla is working closely with all councils on an ongoing basis to understand the scale of these costs and to ensure that Scottish Government recognises that this could well exceed the £155m consequentials.”

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