Cost-of-living crisis: Scottish councils 'facing increased energy costs of around £100m'

Scottish councils face increased energy costs of around £100 million this financial year, the local authority umbrella body has said, amid warnings of an "extremely challenging" winter.

Shona Morrison, president of Cosla, told The Scotsman: "That potentially has got quite a detrimental impact, as you can imagine."

It came as Cosla also warned the Scottish Government’s longer term spending plans will mean a £743m real-terms cut to frontline services.

Picture: John Devlin

This is the equivalent of 20,000 fewer jobs, it said, or around 10 per cent of the current local authority workforce.

Prime Minister Liz Truss announced a package of support to help with energy bills earlier this month.

This includes capping bills at £2,500 from October, with a £400 rebate paid in six instalments.

Business secretary Jacob Rees-Mogg is now expected to announce details of a six-month scheme to help firms, schools, hospitals, charities and other non-domestic consumers cope with rising costs.

Ms Morrison, who was elected the first SNP president of Cosla in June, said: "All elements of our communities are going to be in an incredibly vulnerable position this winter.”

She said warm spaces may have to be provided in village halls.

Ms Morrison added: "Our small businesses – I come from a really small village that really flourishes and we've got some lovely, bespoke little shops – again, massive pressure.

"So absolutely worried about the individual, absolutely worried about the families, but also that wider sector of our authorities is a concern."

Asked if increased local authority costs could lead to job losses, Ms Morrison said the impact might not be felt until further down the line because of the way energy is purchased.

She said: "I think it's going to be an extremely challenging winter for local authorities, as it is in Scotland, in England, all around the world – it's a global issue.”

A Cosla spokesman described the extra energy costs as “an unexpected further strain on our already stretched resources”.

Written evidence submitted by Cosla to Holyrood’s finance and public administration committee notes that inflation is “having a significant impact across Scotland at both an organisational and an individual level”

It adds: "Local government is no exception and is facing major knock-on impacts on services – for instance through increased energy costs across the council estate, including schools and care homes estimated at £100m for 22/23; increased cost of free school meals due to rising food costs; and increased costs of commissioned services and capital projects driven by rising prices for materials as well as soaring energy bills.”

Elsewhere, Cosla raised concerns about the Scottish Government’s recent resource spending review, which sets out its broad spending plans for the coming years.

It said: “The further 7 per cent cut to local government provided for by the RSR [resource spending review] will mean that, by 2026/27, there will be £743m less in real terms to spend on the front line services that matter most to communities – equivalent to 20,000 fewer local government jobs.”

Kirsty Flanagan, chair of the Chartered Institute of Public Finance and Accountancy’s local government directors of finance section for Scotland, told the finance committee the recent pay offer to council workers would probably lead to “significant job losses” because it has not been fully funded by the Government.