Scottish Budget: Councils at 'breaking point' and public services will close, ministers warned

The Scottish Budget announced by finance secretary Shona Robison has been labelled a ‘major blow’ to councils

Council leaders have warned Scottish Budget cuts will lead to public services being closed and jobs being lost, amid claims local authorities have been left at “breaking point”.

Finance secretary Shona Robison earlier this week set out the 2024/25 Scottish budget, including £144 million in compensation for freezing council tax.

But Cosla, the umbrella body for Scotland’s 32 councils, has labelled the Budget outcome as a “major blow” to communities up and down the country, saying it left councils “at real and significant financial risk” – which would lead to cuts and job losses.

Finance Secretary Shona Robison. Image: Jeff J Mitchell/Getty Images.

The body had previously warned £300m would be needed for the council tax freeze to be classed as fully-funded.

Cosla is now demanding urgent discussions with Government ministers before the final Budget is presented to Parliament.

Cosla president, Councillor Shona Morrison, said: “Cosla’s initial analysis shows a real-terms cut to our revenue and capital spending power, which will leave councils at breaking point, with some having to stop altogether.

“The Budget in its current form could result in service cuts, job losses and an inevitable shift to providing statutory services only. This means potentially losing libraries, leisure centres and all the things that improve our lives.”

Cllr Morrison said Cosla did not believe the council tax freeze was being fully funded, and stressed it should be up to each individual local authority to determine its own level of council tax.

She said: “With any sort of shortfall in core funding, the £144m revenue offered for the freeze is immediately worthless.”

Cosla’s resources spokeswoman Councillor Katie Hagmann added: “This is a Budget which will mean job losses – real jobs that support families, and deliver vital services that make a positive difference to people’s lives.”

Stark warnings are already being made by a series of councils, with leaders admitting “difficult choices” will need to be made in the new year.

Cammy Day, leader of Edinburgh Council, said: “I’ve asked ministers for a fairer settlement for local government – it’s clear this continues to fall on deaf ears. Years of cuts have now come to a head, forcing us to find £76m of cuts and £60m next year.

“We’ve already been forced to find £400m worth of cuts in the last decade.”

Cllr Day said the local authority had “hugely ambitious plans for Edinburgh”, but may not be able to do all they want to when they set their own budget in February.

Earlier this year North Lanarkshire Council reversed a decision to close 39 swimming pools, libraries and community halls. This move would have saved the council £4.7m a year – but it faces a budget shortfall of £64m over three years.

Council Leader Jim Logue said: “Faced with £60m in cuts over the next three years, we may be witnessing the tipping point in terms of our ability to deliver vital services that matter so much to people and communities.

“The reality is that we are required to deliver more services than we did ten years ago, yet this council’s budget has been cut by more than £209m in the last decade, and continued ring-fencing of funding, the impact of inflation and real-terms reductions mean some of the most valued local services are under threat.”

Councillor John Alexander, SNP council leader at Dundee Council, added: “We will, inevitably, have to reduce our costs and spends, and each council will have different priorities. Irrespective of the council tax element, we’ll still have a multi-million pound gap to fill.

“For Dundee, a council tax increase of 1 per cent is the equivalent of between £600,000 and £700,000 – our budget gap is upwards of £20m. So, you can understand the financial gulf and challenge.” However, Cllr Alexander said there were “no plans” to look at compulsory redundancies in the city.

The Scottish Conservatives described Cosla’s “fury” at the Budget as “entirely justified”.

Liz Smith MSP, the party’s finance and local government spokeswoman, said: “It speaks volumes that even SNP councillors are saying local authority-provided services are at breaking point and that the council tax freeze has not been fully funded by ministers.

“Once again, our councils have been treated with contempt by an SNP Government that expects them to work miracles. This brutal underfunding cannot continue.”

Humza Yousaf had earlier been forced to use First Minister’s Questions (FMQs) to defend income tax increases, insisting there would not be a “mass exodus” of highly-skilled workers like doctors and nurses from Scotland because of higher taxes.

Ms Robison introduced a new income tax band of 45 per cent for those earning between £75,000 and £125,140, and increased tax for those in the very highest bracket to 48 per cent.

The finance secretary also confirmed the existing thresholds for the higher and top bands – £43,663 and £125,140 respectively – would be frozen, meaning more people will fall into these brackets after receiving a pay rise. It is hoped these measures will bring in an extra £307m.

The Scottish Fiscal Commission has said anyone earning more than £28,850 will now pay more in income tax than they would if they lived elsewhere in the UK.

Bosses at the Royal Bank of Scotland say they have anecdotal evidence high earners are already choosing to live in northern England rather than Scotland because of the higher tax rates.

Scottish Conservative leader Douglas Ross branded the First Minister “high tax Humza” and claimed the changes to income tax could have a negative impact on NHS staffing levels.

Iain Kennedy, chair of the British Medical Association Scotland, said: “One of the unintended consequences of this measure is it may push more doctors out of the NHS to jobs elsewhere or retirement.”

Mr Yousaf disputed this claim, saying: “The statistics simply don’t bear that out. National Records of Scotland statistics from 2021 show that 56,000 people came to Scotland from the rest of the UK, a net-in migration of almost 10,000 people.”

He said workers chose to come to Scotland because of the “social contract” on offer, such as free prescriptions, free tuition fees, and access to childcare and personal care.

Mr Yousaf was meanwhile told his first year in the top job would be remembered for “broken” policies.

In a fiery exchange at FMQs, Scottish Labour leader Anas Sarwar said Mr Yousaf was “not a serious politician”, as he criticised NHS performance figures which show more than 425,000 people waited over the four-hour target in accident and emergency departments this year.

The Scottish Government has been approached for comment.