SNP told to 're-set' councils' relationship after £937m cuts revealed

Cosla has also warned that some authorities could be left out of pocket and need even deeper cuts following to the council tax freeze – with alarm raised that some councils were anticipating raising the charge by more than 3% next year, with no funding from the Scottish Government to cover such an increase.

Pauline McNeill, Scottish Labour’s local government spokesperson, has pointed to research by her party that shows the Scottish Government has cut councils’ non-ringfenced revenue funding by £937.3 million in real teams between 2013-14 and 2021-22.

READ MORE: SNP's Budget agreed despite fears over council funding

The stark figure is revealed despite a nine-year council tax freeze ending in 2017 – a policy re-introduced for the next financial year after Finance Secretary Kate Forbes added an extra £90 million to local government's settlement on condition of the charge being kept at the same level next year.

McNeill said that the Budget passed this week has failed to deliver a fair deal for councils and local government services have been “undervalued, underfunded and under-appreciated”.

Forbes has insisted that councils have been given a fair deal for the coming year.

McNeill has also demanded that local government is “respected” by the Scottish Government and has insisted that the rising responsibilities and falling funding faced by councils is “symptomatic” of the SNP’s relationship with local government.

Scottish Labour local government spokesperson Pauline McNeill

She said: “Throughout its 14 years in government, the SNP has systematically undervalued, underfunded and under-appreciated Scotland’s local authorities.

“The damage done by SNP cuts can be seen across Scotland as potholes go unfilled, bins go unemptied and whole swathes of our towns, villages and cities go without new investment.

“At this Budget, the SNP had the chance to do right by the councils that have went above and beyond throughout the pandemic. Instead, the budget was more of the same SNP neglect and mistreatment of Scotland’s councils.”

McNeill added: “Throughout the SNP’s time in power, local government’s responsibilities have grown even as council funding has been slashed.

“The SNP’s failure to match new responsibilities for local government with new funding is symptomatic of the disregard it holds for a whole layer of government.

“It’s clear that this disrespectful relationship between local and devolved government requires a re-set, and Scottish Labour will fight, not only for a fair funding deal for our councils, but for local government to be treated with the respect that it deserves.”

READ MORE: Councils call for extra £1.5bn and 'no cap' on council tax

In Glasgow, the city council’s budget has been cut by 11% since 2013/14 - while during the same period, the Scottish Government’s funding has increased by more than 3%.

Glasgow City Council identified a £12.2 million funding gap for next year.

In the capital, council officials have revealed £113 million of savings will have to be found up to 2025/26.

The funding pressures are not isolated to Scotland’s cities with the Highlands Council pointing out a £51 million budget gap until 2024, Angus Council highlighting an £11.3 budget gap next year and Argyll and Bute Council having to deal with a £6.7 million gap.

Gail Macgregor, Cosla’s resources spokesperson, has warned that councils are having to deliver Scottish Government commitments such as the expansion of early learning childcare with ringfencing funding pots – impacting on core budgets that deliver crucial frontline services.

Macgregor said although savings have had to made in every one of her 14 years as a councillor, “the cuts have become more severe”.

READ MORE: Glasgow City Council freezes council tax as rates frozen across Scotland

She said: “Early on in the cuts, it was probably impact backroom staff, but in the last three or four years, the impact has become more apparent to members of the public where those cuts are going.

“Councils started to take redundancies in things like environmental health officers and then during Covid, they have needed loads of environmental health officers – it’s the longer-term implication.”

Macgregor added: “It’s not for the public to understand where our budgets come from. All they see is their potholes are not getting filled or their bins are not getting picked up properly. It’s that real impact on the individual people in the community.

“The pandemic has put a real spotlight on that services councils deliver and there’s not a real awareness until it hits people very personally, as it has done to many during Covid.”

The Scottish Government has given councils a shared £90 million fund to mitigate the impact of a council tax freeze – which all 32 local authorities haveagreed to for next year.

Finance Secretary Kate Forbes (Image: PA)

Forbes has also confirmed the £90 million will be baselined in the following year's settlement, which she said was "providing additional certainty to local government”, following lobbying by Cosla. That means the council tax freeze will not have a cumulative impact on council's settlement from the Scottish Government.

But some councils were planning on hiking council tax by more than 3% – leaving officials short-changed next year.

Macgregor said that while the council tax freeze “is the right thing to do in this financial climate”, she warned “it does not actually help councils”.

She added: “Many councils were going to put their council tax up by more than 3%. That shortfall for many councils is not funded and now has to be found from other services.

“That could meant be reductions in services or even result in job losses in some cases.”

But council tax only accounts for around 17% of councils' net expenditure, leaving authorities heavily reliant on Holyrood ministers.

Calls have been made by parties across the political spectrum for a new funding arrangement, a fiscal framework, to be drawn up to deliver a fairer deal for councils.

READ MORE: MSPs reject Tory calls for ring-fenced Scottish Government council budget

Macgregor said that she expects the new parliament following May’s election to focus on the plans that were put on hold during the pandemic, warning “it’s absolutely essential”.

But she stressed that the services councils provide in a post-Covid Scotland will need be be investigated alongside the new funding model.

She said: “That fiscal framework needs to pick up very quickly. We need to then look at what council services will look like in a year’s time.

“Public confidence and a change in the way people are living their lives, they are maybe going to continue to buy things online – parking revenues will go down, for example. There could be real income generation changes once we are out of the pandemic.

“We need a blueprint to see what kind of services we need and what are the new priorities in a new local government model that’s fit for purpose.

“We need to make sure the services we are expected to deliver are what our communities need.”

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The Scottish Conservatives had proposed that a set percentage of the Scottish Government's Budget should be allocated to local councils. But MSPs rejected the idea, pointing to the intention to draw up a new fiscal framework and fears over the impact on other funding needs such as the NHS.

A Scottish Government spokesperson said: “Scotland’s local authorities will receive an increase in revenue funding in 2021-22 of £335.6 million or 3.1%.

“The Scottish Government is committed to protecting funding for the NHS. Once health funding is discounted, the Scottish Government’s resource budget has reduced by 3.1% in real terms for the remainder of the Scottish fiscal resource budget.

"Despite this, local government has been treated very fairly with council’s revenue funding having increased in cash terms by £1.3 billion or 12.1% between 2013-14 and 2021-22.

“In addition to the annual local government finance settlements the Scottish Government is providing local authorities with a further almost £1.5 billion Covid-19 funding over this year and next.”