The Scottish Government says public services have been protected despite cuts to Scotland’s block grant from Westminster, but council leaders argue that councils are facing yet more damaging cuts. They can’t both be right: who’s telling the truth?
Local authorities will receive more than £10.5 billion in 2018-19.
Finance Secretary Derek Mackay said despite a cut of over £200 million to Scotland’s block grant by the UK Government, the 2018-19 Draft Budget delivers a fair funding settlement for local authorities but COSLA (Convention of Scottish Local Authorities) argues that this is a cut of £153m. to essential local government services.
Finance Secretary Derek Mackay said: “The Scottish Government has continued to ensure that our partners in local government receive a fair funding settlement despite further cuts to the Scottish Budget from the UK Government.
“We have protected day-to-day local government spending, while increasing the capital budget. Local authorities will receive more than £10.5 billion through the local government finance settlement in 2018-19.
“We are using our tax varying powers to boost investment in public services, and if local authorities choose to use their powers to increase Council Tax, by up to 3 per cent, they will have an overall real-terms increase in the funds at their disposal, to support local services.”
Local Government has faced really difficult times over the last few years and these will remain into the future despite a more measured approach by the Scottish Government in delivering the local government settlement for next year, COSLA said.
“That said, the reality is that this is not a flat cash revenue settlement for local government. It is a cut of £153m for essential local government services.
“In addition to this, while COSLA is fully supportive of wider capital investment we are disappointed that there is a cut of £60m to local capital funding.
“There are serious financial challenges that lie ahead in several areas and there is no doubt that these will have an impact on the essential services that councils deliver. A particular issue is public sector pay if this is not fully funded.
“Whilst councils have the ability to raise council tax in their local area that is a decision they will take based on local needs and circumstances and is subject to a 3 per cent cap which has been imposed on councils by the Scottish Government.
“The current Spending Review process makes it extremely difficult for councils to set medium and long term financial plans due to short term funding and annual settlements.”
Councillor Macgregor concluded: “The discussions in relation to this year’s settlement between COSLA and Scottish Government have been both positive and constructive.”
This is a draft budget, of course, and the SNP does not command a majority at Holyrood. As a minority administration, the government will have to do a deal with the Scottish Greens and the Greens will be twisting the Finance Minister’s arm to produce more funding for cash-strapped councils. Things may not be quite so bleak for local councils when Scotland’s budget is set in February.
Local government will also continue to press their case for an improved funding package. COSLA president Cllr Alison Evison said: “COSLA has been engaging with all political parties across the Parliament throughout this process and, as this is a draft budget, we will continue to defend essential services over the coming weeks.”
Background
2018-19 Local Government funding allocations and potential council tax increases.
| £million | Revenue | Capital | Total | Potential Income from 3% Council Tax Increase | Local Government Core Settlement plus Potential Extra Council tax Income | ||
| £m | £m | £m | £m | £m | |||
| Aberdeen City | 319.002 | 23.990 | 342.992 | 3.566 | 346.558 | ||
| Aberdeenshire | 403.276 | 37.492 | 440.768 | 4.055 | 444.823 | ||
| Angus | 194.688 | 12.760 | 207.448 | 1.510 | 208.958 | ||
| Argyll & Bute | 187.451 | 13.057 | 200.508 | 1.510 | 202.018 | ||
| Clackmannanshire | 92.288 | 5.495 | 97.783 | 0.719 | 98.501 | ||
| Dumfries & Galloway | 276.266 | 21.871 | 298.137 | 2.022 | 300.159 | ||
| Dundee City | 285.459 | 20.360 | 305.819 | 1.867 | 307.685 | ||
| East Ayrshire | 219.455 | 12.855 | 232.310 | 1.626 | 233.935 | ||
| East Dunbartonshire | 178.335 | 9.713 | 188.048 | 1.849 | 189.897 | ||
| East Lothian | 165.104 | 12.199 | 177.303 | 1.582 | 178.884 | ||
| East Renfrewshire | 171.700 | 7.294 | 178.994 | 1.550 | 180.544 | ||
| Edinburgh, City of | 696.574 | 78.046 | 774.620 | 8.191 | 782.810 | ||
| Eilean Siar | 93.609 | 8.106 | 101.715 | 0.319 | 102.033 | ||
| Falkirk | 269.510 | 14.776 | 284.286 | 2.028 | 286.314 | ||
| Fife | 615.603 | 34.665 | 650.268 | 4.992 | 655.259 | ||
| Glasgow City | 1,209.707 | 136.101 | 1,345.808 | 8.365 | 1,354.173 | ||
| Highland | 430.946 | 41.305 | 472.251 | 3.638 | 475.889 | ||
| Inverclyde | 159.870 | 8.390 | 168.260 | 1.052 | 169.312 | ||
| Midlothian | 152.678 | 9.898 | 162.576 | 1.362 | 163.937 | ||
| Moray | 153.621 | 10.964 | 164.585 | 1.240 | 165.824 | ||
| North Ayrshire | 265.993 | 1.894 | 267.887 | 1.863 | 269.750 | ||
| North Lanarkshire | 594.032 | 32.621 | 626.653 | 3.981 | 630.633 | ||
| Orkney Islands | 67.615 | 6.419 | 74.034 | 0.268 | 74.301 | ||
| Perth & Kinross | 239.094 | 17.036 | 256.130 | 2.394 | 258.523 | ||
| Renfrewshire | 299.095 | 16.333 | 315.428 | 2.517 | 317.944 | ||
| Scottish Borders | 199.095 | 26.291 | 225.386 | 1.677 | 227.062 | ||
| Shetland Islands | 79.034 | 6.643 | 85.677 | 0.280 | 85.956 | ||
| South Ayrshire | 193.576 | 11.217 | 204.793 | 1.788 | 206.580 | ||
| South Lanarkshire | 539.756 | 28.940 | 568.696 | 4.217 | 572.913 | ||
| Stirling | 162.116 | 10.729 | 172.845 | 1.451 | 174.296 | ||
| West Dunbartonshire | 181.309 | 14.600 | 195.909 | 1.226 | 197.134 | ||
| West Lothian | 304.660 | 15.271 | 319.931 | 2.241 | 322.171 | ||
| Still to be distributed | 230.269 | 169.033 | 399.302 | 0.000 | 399.302 | ||
| Scotland | 9,630.770 | 876.364 | 10,507.134 | 76.945 | 10,584.079 |
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