EVERY one of Scotland’s 32 council leaders has backed a motion calling the Scottish Budget a “massive real-terms cut in councils’ core funding”.
The local authority heads met at a Convention of Scottish Local Authorities (Cosla) summit on Friday to discuss the newly announced Budget, which was presented to parliament by interim Finance Secretary John Swinney on Thursday afternoon.
Swinney announced a raft of headline policies, including the rising of Scottish-controlled benefits in line with inflation (10.1%), increasing the top rate of tax on the highest earners, and a temporary scrapping of peak time fares on rail travel.
The Deputy First Minister said there was an extra £550 million in the Budget for local government, compared to the commitments made in the Resource Spending Review, which was published in May.
There is also to be complete flexibility in council tax, with no cap placed on what local authorities can seek to raise from their constituents.
However, councils bosses at the Cosla meeting unanimously backed a motion which said that “most of the supposed £550m additional funding is for existing commitments”, adding: “The £71m of uncommitted funding goes no way towards meeting the identified budget gap in council funding of £612m due to inflation, energy prices, and demand pressures.”
The council leaders said there would be a “requirement for more than £400m likely to be needed for pay settlements in the coming year to address recruitment and retention issues and avoid understandable industrial action by trade unions”.
And council leaders called on the Scottish Government to “pause” the plans for a National Care Service. The Government should instead divert the allocated funding to social care services being provided by local government, they said.
Their unanimously backed motion goes on: “This Budget settlement means another massive real-terms cut in councils’ core funding, after more than 10 years of real-terms cuts, and will lead to socially harmful cuts to vital local services and the loss of jobs within local authorities and from local companies that rely on councils for their employment.
“Leaders note the impact of inflation, the UK Government’s mini-budget, and global economic factors that continue to weigh heavily on budgets and the Scottish Government.
“Leaders further note the additional burden on council finances from revaluation of non-domestic properties and condemns the threat by the Scottish Government to cut grant funding if councils were to be successful in appealing against redeterminations.”
Cosla’s president, SNP councillor Shona Morrison, said: “The reality of the situation is that yet again, the essential services councils deliver have not been prioritised by the Scottish Government.
“Cosla asked for £1 billion, but from our initial assessment of the Budget, we believe that local government will see an uplift of only £71m once policy commitments are taken into account.
“Whilst the decision to allow councils the freedom to set their own council tax rates is welcomed, scope will be extremely limited this year, as councils seek to protect the most vulnerable in our communities, recognising the cost-of-living crisis.”
It comes after the Institute for Fiscal Studies (IFS) said the Scottish Government had overstated spending increases in its Budget.
The IFS said new funding pledges had been compared to the Budget last year, and not the amount that was actually spent this year following funding increases from the UK Government and drawdowns from reserves.
The think-tank also said the method of calculating inflation in the Budget was likely to understate the impact it could have on public finances.
Local government spending, for instance, increased by £260m as a result of the pay deals offered earlier this year, the think tank said, meaning the quoted increase would actually be at least a 5% drop in the real spending on local government this year.
The IFS did also say that funding for local government had increased more than was expected as a result of the Resource Spending Review in May.
A Scottish Government spokesperson said: “We have protected councils in the most challenging Budget since devolution to provide more than £13.2 billion in the 2023-24 Local Government Settlement.
“This represents a cash increase of over £550 million or 4.5%, which is a real terms increase of £160.6 million or 1.3%.”
