Councils are facing crippling budget black holes of more than £1.2billion, a Sunday Mail investigation has found. The massive deficits across 32 local authorities have sparked fears of major tax rises or deep cuts in Scotland on top of the pain announced by Chancellor Jeremy Hunt in his autumn statement last week.
Trade union the GMB has blamed governments at both Holyrood and Westminster for creating the crisis by “passing the buck on austerity” on to councils for over a decade. They warn income and council tax increases are needed to stave off the devastation of education, social care, waste management and library services.
The SNP’s stand-in finance minister John Swinney will announce the Scottish budget for next year at the Scottish
Parliament on December 15. GMB Scotland senior organiser Keir Greenaway said: “Chronic decline or recovery? That’s the question facing political leaders as budgets are set but, after a decade of political austerity, the answer should be staring them in the face – you can’t cut your way out of a crisis, you must invest.
“Scotland must maximise the full range of tax-raising powers at its disposal, from reformed council tax to income tax, with the broadest shoulders bearing the biggest load, and the public will support this if it sees tangible evidence that its money is being distributed fairly and properly to the services on which we all depend.” Glasgow City Council admitted it is facing a funding black hole of £110million next year alone, with £80million of the figure the result of recently agreed pay rises for staff battling the cost-of-living crisis.
Meanwhile, City of Edinburgh Council said it will need to cut £76.5million next year and £158.6million by 2027 unless more funds are found for front-line services. Western Isles Council, which is facing a £5.6million black hole, said savings, cuts and council tax increases were “inevitable”.
Dumfries and Galloway face an estimated five-year funding gap of £50million, while Dundee is contending with a £45million deficit.
Highland Council has admitted its forecasted budget gap next year is £40.9million. Greenaway added: “Everyone is paying the price for 12 years of ruinous Tory rule but the truth is the Scottish Government doesn’t have clean hands when it comes to the perilous state of our public services.
“These eye-watering black holes in council budgets are a consequence of a decade-long squeeze on the local government budget and passing the buck on austerity. Councils have been hammered by this and also years of a regressive council tax freeze, a sop to higher earners which starved councils of the ability to mitigate the impact of cuts on the most vulnerable communities and services.
“Now we are at a crossroads for local services, the workers who deliver them and the communities who need them.” Council umbrella body COSLA refused to comment but revealed it will publish a “budget lobbying document” in the coming weeks likely to outline the financial pressures and demand increased funding.
Scottish councils were allowed for the first time to implement council tax increases of their choice this year, with the majority opting for three per cent hikes. If given the same freedom, many will be keen to go beyond that figure this time around. The majority of council funds come from the Scottish Government, where FM Nicola Sturgeon has the ability to increase income tax to raise money for services.
The colossal funding gaps have opened up in accounts due to public sector wage settlements and inflation. Unions also blame years of council tax freezes imposed by the Scottish Government for starving the ability of local authorities to invest. In Glasgow a desperate plan to sell off public buildings, including the City Chambers and Kelvingrove Art Galleries, is under way in order to meet the cost of historic equal pay claims.
Scottish Tory shadow local government secretary Miles Briggs said: “The SNP and Greens have savagely slashed funding for our councils year after year and there is no sign of that situation improving anytime soon. That has a devastating impact on day-to-day services that our communities rely on and affects our most vulnerable.
“The SNP-Green government have a record block grant at their disposal from the UK Government but they are too busy squandering millions of it on another divisive referendum rather than supporting our cash-strapped councils.” Lib Dem economy spokesman Willie Rennie said: “Nicola Sturgeon has imposed year after year of harrowing cuts on council budgets so it is no surprise they are seriously stretched.
“We want to give local authorities the power to borrow to invest and grow their local economies. We also want to see a greater proportion of revenue raised locally, with councils given more control over the key financial levers in their area.”
Labour MSP Mark Griffin said: “This is the clear price Scotland’s councils are forced to pay due to the SNP. For years, the SNP have run our councils into the ground – with working people being made to pay the price. The people of Scotland deserve so much better than SNP cuts.”
Hunt said the financial plans set out in the autumn statement last week are worth £1.5billion to Scotland and that the funds will be released over the next two years. However, Sturgeon said Scotland essentially had a flat budget because its value had shrunk by £1.7billion as a result of inflation.
Hunt announced a £55billion “plan for stability”, half of which he said would come from tax rises and the rest from cuts. A key part of his plan is to allow average energy bills to increase to £3000 a year from April by reducing the extent of government support available.
This will have a disproportionate affect on Scottish households due to the colder climate. The Scottish Government said: “Despite very challenging circumstances, the Scottish Government is treating councils fairly and has provided a real-terms increase of over six per cent to local authority budgets this year.
Decisions on tax and spending for 2023-24 will be taken as part of the annual Budget process.”
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