Anger as city faces bigger cuts than rest of country

CITY leaders today hit out at a "disappointing" funding deal from the Scottish Government after the Capital was hit by one of the biggest grant cuts of any Scottish council.

Total funding for Edinburgh is expected to slide by around 3.1 per cent in 2011/12 compared to last year - much higher than the average 2.6 per cent cut facing local authorities across Scotland.

And council construction could slow down markedly after funding for capital projects - such as building improvements or extensions and new developments - slumped by a fifth, around 20 million, to 79m.

Council finance officials are continuing to analyse the 790.9m revenue grant - which funds the day-to-day running of the council - to see how it compares to 2010/11, although the overall decline is judged to be around 3.1 per cent.

Council leader Jenny Dawe said: "The initial indication from today's announcement looks disappointing as it appears that Edinburgh's reduction in grant in 2011/12 is the joint highest of any authority in Scotland. However, at this stage there is not enough information for the full impact to be quantified."

Among the councils to fare best was SNP-controlled West Lothian, which will see funding reduce by only 0.3 per cent.

The Scottish Government has vowed to only cut total funding for Scotland's local authorities by 2.6 per cent if councils agree to carry out a series of SNP pledges, including continuing the council tax freeze, maintaining pupil-teacher ratios in the early years of primary school and maintaining police numbers. If any council refuses to agree to carry out the objectives, it faces a much more severe funding cut.

There was also anger today at the details of the new "Princes Street penalty" being imposed by the Scottish Government.

It was confirmed that large retailers will now have to pay anything between an additional 2.5p in every pound up to 15p in every pound on their business rates bill.

Graham Birse, deputy chief executive of the Edinburgh Chamber of Commerce, believes charging large retailers even more could threaten the ability of the city to attract major retailers to developments like the proposed St James Quarter and Princes Street.

He said: "This is ridiculous nonsense and is probably illegal under EU law because it is discriminatory."

Liberal Democrat finance spokesman Jeremy Purvis said: "Introducing a 'Princes Street penalty' will do nothing to instil confidence in businesses that the SNP is on their side."

Mr Swinney said: "Following close dialogue with Cosla, we have delivered a very good deal for local communities under challenging circumstances."