Scottish councils face 'significant' challenges amid SNP funding cuts, finds watchdog

Scotland's councils face "significant" financial challenges amid funding cuts handed down by SNP ministers, a public spending watchdog has said.

The Accounts Commission found local government funding reduced by 4.2 per cent in real terms between 2013/14 and 2020/21, once Covid cash was excluded.

Meanwhile, an increasing amount of money is now ring-fenced to meet Scottish Government priorities.

Conservative MSP Miles Briggs said the report was a "damning critique of how the SNP Government have undermined Scotland’s councils due to chronic, long-term under-funding".

Picture: John Devlin

He said: "It paints a stark picture of the huge pressures they face to deliver basic services.

“A 4.2 per cent real-terms cut is completely unsustainable – and when increasing areas of funding are ring-fenced by the SNP, councils are being forced to slash spending in other areas.

"This explains, for instance, why one in eight libraries have shut for good under the SNP.

“The SNP-Green coalition have cynically passed the buck to local authorities to either cut services or raise council tax to make ends meet because they are unwilling to give them the resources they need."

In its financial overview of local government in 2020/21, the Accounts Commission said councils would have to face the impacts of the pandemic as well as issues which pre-date it, such as poverty.

Local government funding is announced annually, which the watchdog said “makes it challenging for councils to plan and budget effectively for the medium and longer term and creates uncertainty over future funding”.

Its report said: "Excluding the effect of Covid-19 funding, the underlying cumulative funding position for councils has fallen by 4.2 per cent in real terms since 2013/14.

"This demonstrates that local government funding has been reduced by proportionately more than the rest of the Scottish Government budget over this period.

"The Scottish Government is committed to protecting the health budget, which has a direct impact on all other areas of the Scottish Budget, including local government."

The watchdog said the long-term funding position for councils "remains uncertain, with significant challenges ahead as councils continue to manage and respond to the impact of Covid-19 on their services, finances and communities".

It added: “In the longer term, uncertainty creates challenges for councils as they seek to address cost and demand pressures that existed before the impact of Covid-19, as well as develop long-term plans with their partners to address complex issues such as child poverty and inequalities, to improve economic growth and to deliver Scotland’s net-zero ambitions.”

William Moyes, chair of the Accounts Commission, said: “Councils face serious challenges, driven by financial constraints, increasing demands on service and resource.

"Alongside these longer-term issues are the financial uncertainties caused by the impacts of Covid-19, including loss of income and additional costs.

"Now, as we look ahead and beyond council elections in May, councillors must determine how to restart services, deliver differently, save money and empower communities.

"They must do so alongside focusing on national priorities, including climate change.

"Whilst councils must address longer-term financial planning, having in place funding certainty, beyond a one-year settlement from the Scottish Government, remains a critical issue.”

A Scottish Government spokesperson said: “Despite the challenging financial position of recent years, local government has been treated very fairly. The Scottish Government is committed to protecting the Health Budget which has a direct impact on all other areas of the Scottish Budget, including local government. Despite this, local authority revenue funding increased by 3.6 per cent in cash terms between 2013-14 and 2019-20.

“The overall local government 2022-23 funding package of almost £12.7 billion represents an increase of more almost £1.1 billion, or 6.3 per cent in real terms, compared with 2021-22. This comes against a cut to the Scottish Government’s overall budget of 5.2 per cent in real terms, due primarily to UK Government funding reductions.

“We are developing multi-year spending plans and will publish the findings of the Resource Spending Review in May 2022. This will include a review of all ring-fenced funding. While ring-fenced funding is for increased investment in services such as our schools and nurseries, local authorities have autonomy to allocate almost 93 per cent - £11.8 billion - of the funding we provide in 2022-23, plus all locally raised income.

“Our shared vision and outcomes for Covid Recovery have been agreed with Local Government. Together, with business and the third sector. Work is being co-ordinated to change the way we think about services so that they are focused on meeting the needs of individuals, and working differently across boundaries to achieve our priority outcomes for recovery.”

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