NHS Lothian has taken the difficult decision to withdraw joint funding from a service that provides support to veterans in Lothian, following a stark financial review.
The health board has told Veterans First Point Lothian staff and patients that it can no longer provide its share – £214,778 – of the total budget required, to maintain the service amid the significant financial challenge facing health boards.
Veterans First Point Lothian was jointly funded by Scottish Government and NHS Lothian as a “one-stop shop” offering support, advice and mental health care for veterans. It is a multi-award-winning service that has provided support to over 2500 different veterans throughout the last 15 years.
By April 2025, the service will cease to exist in its current form and a significant redesign and move of premises is planned by March 2025.
It comes as NHS Lothian is forced to review all services and departments in a bid to make efficiency savings of seven per cent following the budget allocation made earlier this year.
Further reductions in part of the mental health budget of 4.6 per cent means that the health board can no longer continue to find its share of this service.
Tracey McKigen, Director of Royal Edinburgh Hospital and Associated Services, NHS Lothian, said: “This has been a really difficult decision and we apologise to all of our patients and staff who are affected. We would like to thank the team for their dedication and commitment to supporting our veterans over the years.
“This is no reflection on the quality of the Veterans First Point Lothian service, but it does serve as a stark reminder of the extremely difficult choices that we are facing every day as we balance the need to provide safe and effective healthcare while meeting the severe financial challenges facing health board and other public sector organisations.”
Scottish Government will allocate its 40 per cent share of the funding and NHS Lothian is currently reviewing the future service provision possible within the remaining budget.
However it does mean that Veterans First Point Lothian will no longer be able to accept new referrals or commence any new episodes of treatment. Veterans, who are impacted by the change, are urged to contact the team to discuss alternative support.
If veterans feel they need help or support and are not already part of Veterans First Point Lothian, they should contact their GP during the day, and at evenings and weekends they should contact NHS 24 on 111.
£500 million in savings to ease ‘enormous’ pressure on public finances
Holyrood’s Finance Secretary Shona Robison has outlined the urgent action being taken to balance the 2024-25 Scottish Budget in the face of “enormous and growing pressure on the public finances”.
Highlighting the continuing effects of Brexit, the COVID-19 pandemic, the war in Ukraine and the cost of living crisis, alongside UK Government spending decisions, Ms Robison said difficult decisions were required.
The total savings, worth up to £500 million, include:
Implementing emergency spending controls across the public sector, particularly targeting recruitment, overtime, travel and marketing
Ending the ScotRail Peak Fares pilot
Mirroring the UK Government’s policy to means test Winter Fuel Payment
Making additional savings across portfolios, including in sustainable and active travel and in health and social care
The Finance Secretary said she was also currently planning to use up to £460 million of additional ScotWind revenue to address in-year pressures in 2024-25.
Ms Robison said: “This Government has consistently warned of the significance of the financial challenge ahead.
Prolonged Westminster austerity, the economic damage of Brexit, a global pandemic, the war in Ukraine, and the cost of living crisis have all placed enormous and growing pressure on the public finances.
“In the last three years alone cumulative CPI inflation has seen prices increase by 18.9%, diminishing how far money will go for households and governments alike.
“In the face of these challenges, the Scottish Government has stepped in to support people and services where it has been needed most: on social security, health and public services. But we have done so without equivalent action from the UK Government, which has repeatedly failed to properly review the adequacy of funding settlements.
“We cannot ignore the severe financial pressures we face. We will continue to be a fiscally responsible government and balance the budget each year, as we have done every year for 17 years and as we will do again this year. But this will mean we must unfortunately take difficult decisions along the way.”
Responding to today’s statement by Scottish Government Finance Secretary Shona Robison, Poverty Alliance chief executive Peter Kelly said: “People in Scotland believe in justice and compassion. They know that we need a strong social foundation so we can look out for each other and help people build a life beyond the injustice of poverty.
“But we’re now being left with holes in the fabric of Scottish society that will likely make life even harder for people on low incomes who are already being pushed towards debt, hunger, homelessness, and destitution. That is completely unjust, irresponsible and unnecessary.
“We are a rich country, and our collective wealth has grown massively over the decades. Past generations used that wealth to plan and budget for the public good, and MSPs and Ministers must now urgently use their powers over tax and investment to build a better, fairer future for all of us – and especially those in poverty. Economic growth will not fix the holes in society, unless it comes along with increased social investment.
“We are very concerned about the effect of cuts to mental health support and adult social care. We know that people in poverty are more likely to need that support, and data shows a growing risk of poverty for disabled people.
“We are deeply disappointed that plans to expand concessionary bus travel to people in the asylum system have been scrapped, along with a return to peak fares on ScotRail. We all need the freedom to travel, but too many of us simply can’t afford the fares.
“Organisations like the STUC and IPPR Scotland have published concrete plans that show how the Scottish Government can use powers over tax to invest billions of pounds every year in our shared society.
“We can build better budgets that give people the means to build a better future, to create a true wellbeing economy that supports fair work, and a just transition to the net zero future that we urgently need.”
Reacting to the Scottish Government’s Pre-Budget Fiscal Statement, STUC General Secretary Roz Foyer:“With every cut announced by the Scottish Government today, workers and communities across Scotland will be scarred for generations to come.
“For over two years now, we’ve told the Scottish Government they had almost £3.7 billion worth of untapped revenue at their fingertips through increasing tax on the rich. They could have acted. They chose not to. We are in no doubt that brutal Tory austerity has had an undeniable impact on Scotland’s finances. But the Scottish Government must take responsibility for their own cuts. They cannot be allowed to escape scrutiny.
“Public sector workers have faced more than a decade of falling real wages, lagging far behind those in the private sector. Those workers not only have the right to demand above inflation pay rises, but, if our public services are to improve, improvements in pay are non-negotiable.
“All eyes now turn to the Chancellor but it’s a shambles that we’re awaiting some form of salvation, if any is forthcoming, from the UK Government when our government in Holyrood could have done so much more.
“The people of Scotland do not want a Scottish Government that administers cuts while annunciating the droopy mantra of ‘it wizny me’. They want politicians that choose to govern – and that means taxing the rich to invest in the services that we all rely on.”
Ms Robison also proposed that the next Scottish Budget takes place on the 4th December, subject to the agreement of FPAC and the Scottish Fiscal Commission.
Tomorrow’s Programme for Government from the Scottish Government must include urgent action to deliver multi-year funding and progress Fair Funding to support voluntary organisations, their staff and their volunteers, and the people and communities our sector works with, says SCVO.
SCVO and colleagues across the voluntary sector welcomed the Scottish Government’s commitment to deliver Fairer Funding for the sector by 2026, including exploring options to implement multi-year funding deals.
Despite this renewed focus, 18 months on from the policy prospectus, there has been little progress.
In the Programme for Government (PfG) action is urgently needed to deliver multi-year funding and progress Fair Funding to support of voluntary organisations, their staff and their volunteers, and the people and communities our sector works with.
Background
For over a decade, the Scottish Government has recognised the need for multi-year funding, committing to longer-term funding for the voluntary sector across multiple government strategies, including within several Scottish Budgets and Programmes for Government, and the Economic Strategy.
In April 2023, the Scottish Government’s policy prospectus, New leadership – A fresh start, renewed these ambitions, committing to delivering Fairer Funding for the sector by 2026, including exploring options to implement multi-year funding deals. This was followed in May 2023 by a commitment in the Medium-Term Financial Strategy to adopt multi-year spending plans.
Despite this renewed focus, 18 months on from the policy prospectus, there has been little progress. The most recent Scottish Budget made no further commitments, deferring action on any multi-year funding to the upcoming Medium-Term Financial Strategy, and making no reference to voluntary sector funding.
The problem
It is widely understood that our sector is facing unprecedented challenges. Years of underfunding and poor funding practices, and crises such as the pandemic, and the cost-of-living crisis have put the sector under increasing pressure, exacerbating financial and operational challenges.
The running costs and cost-of-living crises continue to put pressure on voluntary organisations – with demand for services increasing, costs rising, and financial uncertainty ongoing.
From August 2021 to April 2024, the proportion of voluntary sector organisations reporting financial challenges has increased from 47% to 77%.
Over a third (36%) of organisations have reported having made use of their financial reserves in the 3 months leading into April 2024, a 4% increase compared to the same period in 2023. Depleting reserves for recurring costs is not sustainable, with 60% of the organisations sharing that continuing to use reserves was unsustainable for their organisation.
As costs have risen for voluntary organisations over the past three years, so have demands on the services that they provide for the most vulnerable people in society. In August 2021, 56% of organisations reported an increased demand for core services and activities, rising to 63% by April 2023.
The most recent Third Sector Tracker results were published earlier this month and cover the three months to April 2024.
By April 2024, the Third Sector Tracker found:
62% of organisations believed that rising costs had affected the ability to deliver core services or activities since December 2023.
47% of organisations reported cost increases in their top three challenges.
33% of respondents had not been able to deliver all their planned services in the preceding 3 months.
Only one third (32%) of respondents have been able to meet all of the increased demand for their services in the preceding 3 months. For the organisations who had been unable to meet increased demand, the main difficulties included: staff capacity (54%); raising funds to meet the demand (50%); and volunteer capacity (41%.).
As local councils fund far more voluntary organisations than Scottish government, the fallout from the local government settlement will also have a significant impact on voluntary organisations, further exacerbating these pressures. Similarly, any reduction in local services will result in further increased demand for some voluntary organisations.
The Emergency Budget Response has also left organisations awaiting confirmation of Scottish Government funding vulnerable.
The solution
SCVO and colleagues across the sector welcomed the Scottish Government’s commitment to delivering Fairer Funding for the sector by 2026, including exploring options to implement multi-year funding deals. Without action in the Programme for Government (PfG), achieving this target becomes increasingly unlikely.
A longer-term funding model for the voluntary sector across all Scottish Government departments.
Define multi-year funding for voluntary organisations as a three-year minimum commitment.
Record progress by collecting and publishing what proportion of grants and contracts are delivered on a multi-year basis and accommodate other essential Fair Funding elements.
To be meaningful and support a sustainable sector, multi-year funding must also recognise and incorporate other essential Fair Funding elements including:
Flexible, unrestricted core funding
Inflation-based uplifts
Accommodate at least the Real Living Wage and uplifts on par with those offered to public sector staff.
Full costs recovery, which includes core operating costs.
Long term funding should also be provided to local authorities, to allow them to enter into multi-year agreements with voluntary organisations. Between one quarter and one third of voluntary organisations receive funding from local authorities.
Without these commitments, achieving “Fairer Funding” by 2026 becomes increasingly unlikely.
To make and monitor progress, it is also essential that the PfG takes action on transparent funding, including developing timelines, goals, and actions to both monitor progress, and ensure progress can be scrutinised by the voluntary sector and Parliament.
Testimonials
“Like all voluntary organisations, we have very short-term funding, so while our contracts are on paper secure, everyone knows their job is only as secure as the current piece of short-term funding” – Registered charity
“Everything we do is dependent on funding, and amounts are often not confirmed until very late in the financial year” – Registered charity
“Due to annual funding from Scottish Government, which doesn’t cover our core costs, recruitment is often on short-term contracts or is subject to ongoing funding, of which there is no guarantee” – Voluntary sector intermediary
Conclusion
Scotland’s voluntary sector is an employer, a partner, and a vital social and economic actor central to delivering on the Scottish Government’s three missions of equality, opportunity, and community.
The Programme for Government is an opportunity for the First Minister and the cabinet team to recognise and support the many contributions of voluntary organisations, their staff and their volunteers across Scotland by making progress towards the Fair Funding our sector desperately needs.
To achieve this the Scottish Government must commit to progressing multi-year funding, develop timelines and goals, and make plans to monitor progress. To support a sustainable sector, multi-year funding must also recognise and incorporate essential Fair Funding elements.
Additional information
SCVO’s full proposals for the 2024/2025 Programme for Government cover two areas and can be found here:
Prime Minister Keir Starmer delivered a speech in the Downing Street garden today on fixing the foundations of our country
When I stood on the steps of Downing Street – just over there – two months ago. I promised this government would serve people like you.
Apprentices. Teachers. Nurses. Small business owners. Firefighters. Those serving our community and our country every day.
I promised that we would get a grip on the problems we face. And that we would be judged by our actions, not by our words.
I said before the election – and I say it again really clearly today: Growth.
And, frankly, by that I do mean wealth creation…
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is the number one priority of this government.
That’s why, in our first few weeks, we set up the National Wealth Fund –
because we want every person and every community to benefit.
It’s why we’ve unlocked planning decisions –
Because we are going to build 1.5 million new homes.
It’s why we’ve set up Great British Energy –
To create good jobs and cut people’s bills.
And it’s why we ended the national strikes that have crippled our country for years.
Because I defy anyone to tell me that you can grow the economy…
when people can’t get to work – because the transport system is broken.
Or can’t return to work – because they’re stuck on an NHS waiting list.
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And these are just the first steps towards the change that people voted for.
The change I’m determined to deliver.
But before the election I also gave a warning.
I said change would not happen overnight.
When there is deep rot in the heart of a structure, you can’t just cover it up.
You can’t tinker with it or rely on quick fixes.
You have to overhaul the entire thing.
Tackle it at root.
Even if it’s harder work and takes more time.
Because otherwise what happens?
The rot returns.
In all the same places.
And it spreads.
Worse than before.
You know that – I know that.
That’s why this project has always been about fixing the foundations of this country.
But I have to be honest with you. Things are worse than we ever imagined.
In the first few weeks, we discovered a £22 billion black hole in the public finances.
And before anyone says ‘oh this is just performative’.
Or ‘playing politics’.
Let’s remember.
The OBR did not know about this.
They didn’t know.
They wrote a letter saying they didn’t know.
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Even just last Wednesday, we found out that
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We borrowed almost £5 billion more than the OBR expected in the last three months alone.
That’s not performative – that’s fact.
But as well as the things we’ve discovered, we’ve also seen shocking scenes across the nation.
A mindless minority of thugs – who thought they could get away with causing chaos.
Smashing up communities and terrifying minorities.
Vandalising and destroying people’s property.
Even trying to set fire to a building – with human beings inside it.
And as if that wasn’t despicable enough.
People displaying swastika tattoos.
Shouting racist slurs on our streets.
Nazi salutes at the cenotaph –
The cenotaph – the very place we honour those who gave their lives for this country.
Desecrating their memory….
Under the pretence – and it is a pretence – of ‘legitimate protest’.
Now they’re learning that crime has consequences.
That I won’t tolerate a break down in law and order under any circumstances.
And I will not listen to those who exploit grieving families, and disrespect local communities.
But these riots didn’t happen in a vacuum. They exposed the state of our country. Revealed a deeply unhealthy society. The cracks in our foundation laid bare –
Weakened by a decade of division and decline.
Infected by a spiral of populism…
Which fed off cycles of failures
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Stuck in the rut of the politics of performance.
And I saw the beginning of that downward spiral firsthand.
Back in 2011.
When riots ripped through London and across the country.
I was then Director of Public Prosecutions.
And when I think back to that time.
I see just how far we have fallen.
Because responding to those riots was hard – of course it was.
But dealing with the riots this summer was much harder.
In 2011, I didn’t doubt the courts could do what they needed to do.
This time – to be honest with you – I genuinely didn’t know.
Let me tell you this. Every day of that disorder – literally every day – we had to check the precise number of prison places we had and where those places were.
To make sure we could arrest, charge and prosecute people quickly.
Not having enough prison places is about as fundamental a failure as you can get.
And those people throwing rocks, torching cars, making threats.
They didn’t just know the system was broken.
They were betting on it.
Gaming it.
They thought – ‘ah, they’ll never arrest me.
And if they do, I won’t be prosecuted.
And if I am, I won’t get much of a sentence.’
They saw the cracks in our society after 14 years of populism and failure – and they exploited them.
That’s what we have inherited.
Not just an economic black hole.
A societal black hole.
And that’s we have to take action and do things differently.
And part of that is being honest with people – about the choices we face. And How tough this will be. And frankly – things will get worse before they get better.
I didn’t want to release prisoners early.
I was Chief Prosecutor for five years.
It goes against the grain of everything I’ve ever done.
But to be blunt – if we hadn’t taken that difficult decision immediately.
We wouldn’t have been able to respond to the riots as we did.
And if we don’t take tough action across the board. We won’t be able to fix the foundations of the country as we need.
I didn’t want to means test the Winter Fuel Payment. But it was a choice we had to make.
A choice to protect the most vulnerable pensioners. while doing what is necessary to repair the public finances.
Because pensioners also rely on a functioning NHS.
Good public transport.
Strong national infrastructure.
They want their children to be able to buy homes.
They want their grandchildren to get a good education.
So we have made that difficult decision –
To mend the public finances.
So everyone benefits in the long term –
Including pensioners.
Now that is a difficult trade off.
And there will be more to come.
I won’t shy away from making unpopular decisions now…
If it’s the right thing for the country in the long term.
That’s what a government of service means.
This shouldn’t be a country where people fear walking down their street.
Their TVs showing cars and buildings being set on fire.
This shouldn’t be a country where the Prime Minister can’t guarantee prison places.
This shouldn’t be a country where people are paying thousands more on their mortgage.
Or waiting months for hospital appointments they desperately need.
Where our waters are filled with sewage.
Where parents worry that their kids won’t get the opportunities they did.
Where nothing seems to work anymore.
So, when I talk about the inheritance the last government left us…
The £22 billion black hole in our finances…
This isn’t about a line on a graph.
That’s about people’s lives.
Your lives.
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This government won’t always be perfect, but I promise you this:
You will be at the heart of it…
In the forefront of our minds…
At the centre of everything we do.
That’s why I wanted to invite you here today.
To show that decent, hard-working people who make up the backbone of this country belong here.
This government is for you.
A garden and a building that were once used for lockdown parties…
Remember the pictures just over there? With the wine and the food.
Well this garden…
And this building…
are now back in your service.
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Those things happened precisely because the government itself lost its focus.
on the hopes and ambitions of working people.
During those recent riots, I made huge asks…
of the police and of the criminal justice system –
People already stretched to the limit.
They knew I was making big asks of them.
And I’m not going to apologise for it.
But let me tell you this – they delivered.
They deserve our gratitude.
And that’s why I went to Southport…
To Lambeth…
To Belfast…
To thank them personally. To shake the hands of the first responders who rose up to the ask I made of them.
They deserve a government that trusts them.
Supports them.
And works with them.
That is the sort of government we will be.
One that works with people, not does things to them.
One that believes in hard graft, not gimmicks.
Honest about the challenges we face…
And working tirelessly to fix them.
That is how we will always work.
Now, next week, parliament returns. The business of politics will resume. But it won’t be business as usual.
Because we can’t go on like this anymore. Things will have to be done differently.
We will do the hard work to root out 14 years of rot. Reverse a decade of decline. And fix the foundations.
Between now and Christmas, we will carry on as we have started. Action not words.
We will introduce legislation and take decisions to protect taxpayers’ money.
To take on the blockers by accelerating planning. to build homes and boost growth.
We’ll move forward this autumn with harnessing the full potential of AI for growth and the public good.
We’ll bring rail service into public ownership, putting passengers first.
The biggest levelling up of workers’ rights in a generation to give people security, dignity and respect at work.
And Great British Energy will be owned by the taxpayer, making money for the taxpayer. Producing clean energy and creating good jobs.
That is our focus for the rest of the year.
But I will be honest with you. There’s a budget coming in October. and it’s going to be painful.
We have no other choice given the situation that we’re in. So those with the broadest shoulders should bear the heavier burden. And that’s why we’re cracking down on non-doms.
Those who made the mess should have to do their bit to clean it up. That’s why we’re strengthening the powers of the water regulator and backing tough fines on water companies that have let sewage flood our rivers, lakes and seas.
But just as when I responded to the riots – I’ll have to turn to the country and make big asks of you as well.
To accept short term pain for long term good.
The difficult trade-off for the genuine solution.
And I know that after all that you’ve been through – that is a really big ask and really difficult to hear.
That is not the position we should be in. It’s not the position I want to be in. But we have to end the politics of the easy answer that solves nothing.
But I also know that we can get through this together.
Because the riots didn’t just betray the sickness. They also revealed the cure.
Found not in the cynical conflict of populism. But in the coming together of a country.
The people who got together the morning after. All around the country. With their brooms, their shovels, their trowels. And cleared up their community.
They reminded us who we really are.
I felt real pride in those people who cleaned up the streets.
Rebuilt the walls. Repaired the damage.
And I couldn’t help thinking about the obvious parallels.
Because imagine the pride we will feel as a nation.
When, after the hard work of clearing up the mess is done.
We have a country that we have built together.
Built to last.
That belongs to every single one of us.
And all of us have a stake in it.
Our hard work rewarded – a dozen times over.
Because we’ll have an economy that works for everyone.
An NHS not just back on its feet, but fit for the future.
Streets that everyone feels safe in.
No longer dependent on foreign dictators…because we’re producing our own clean energy right here.
And giving every child – wherever they come from. Whatever their background.The chance – to go as far as their talent will take them.
I won’t lose sight of that prize. I won’t lose sight of what we were elected to do.
And most importantly – I won’t lose sight of the people that we were elected to do it for.
A call to value our workforce & embrace Third Sector solutions with immediate increased funding
With over 40 years of experience in various roles within the health and care systems, from a clinician in the acute sector to working in primary care, and now as the Chair of LifeCare Edinburgh, I have witnessed significant changes and challenges (writes LORNA JACKSON-HALL).
The recent impact of financial cuts to third sector care contracts in Edinburgh, along with the recent changes in the Westminster Government, compel me to share some thoughts on short-term solutions as we work towards long-term strategies.
Valuing Our People
It’s crucial to value everyone involved in our health and care systems, both the workforce and those we serve.
The NHS faces immense pressure, primarily driven by the need to manage patient flow into hospitals and expedite their discharge into supportive environments. The workforce crisis, identified over a decade ago, continues to escalate.
An ageing population among clinical staff, coupled with cuts in university courses, training places, and bursaries, has led to a crisis in the number of Allied Health Professionals, Nurses, and Doctors.
Addressing this workforce gap will take approximately ten years as we train and equip new staff with the necessary skills.
Maximising the Potential of the Care Staff Workforce
In the interim, we must focus on our care staff workforce in both social care and the third sector.
It’s essential to examine the health economics of utilising this workforce to its full potential. These dedicated individuals perform incredible work, significantly contributing to keeping people supported in their home environments, thereby delaying or even preventing hospital admissions.
Programmes such as befriending services like Vintage Vibes and buddying services for isolated individuals, play a vital role in enhancing the health and well-being of our older population.
Urgent and immediate increased funding for third sector organisations such as LIfeCare Edinburgh could help to alleviate some of the current pressures on hospitals.
These organisations run meals on wheels, care at home services, and day services, all of which support frail elderly individuals and/or those living with dementia their carers to remain at home longer.
Impact on Hospital and GP Services
Implementing these measures would help reduce the influx of patients into hospitals and improve the discharge process, allowing acute hospitals to focus on reducing elective lists.
This, in turn, would ease the burden on GP Practice services, enabling them to prioritise preventative care. Such a shift is essential to support the growing number of people living with multimorbidity in Scotland today.
By valuing our workforce and maximising the potential of third sector organisations through true partnership working and appropriate funding, we can make meaningful progress in addressing the immediate challenges while laying the foundation for a healthier future.
City councillors have considered a report outlining proposals for balancing the city’s budget.
In order to plan for this reduction and a proposed national Council Tax freeze, while continuing to deliver the Council’s priorities, a number of savings and spending proposals have been published as part of a Revenue Budget Framework and Medium Term Financial Plan.
Proposals include:
A revised employer pension contribution rate of 17.6% which could save the council £16.5 million without impacting the value of employee pensions
Continuing to provide annual support to the Council’s transport ALEOs worth £12.95 million in recognition of changing patterns of commuter usage
Additional actual investment of £11.4 million towards the delivery of health and social care services
Accelerating Council service payments to Edinburgh Leisure in 2024/25 of up to £3.2 million to provide additional financial support in 2024/25, including sums that would allow payment of the Real Living Wage, pending development of sustainable longer-term plans to ensure the organisation’s financial sustainability
Net savings of £1.7 million on the council’s energy spend, supporting sustainability goals
Recommendations to avoid reductions to school budgets in the 2024/25 academic session, further to a cross-party Motion passed at Tuesday’s Education, Children and Families Committee meeting
An ongoing change programme to underpin the transformation required by the Council if it is to close future budget gaps.
At their meeting on Thursday (25 January), the Finance and Resources Committee also heard how the city faces a like-for-like cash-terms reduction in core grant funding of £10 million in 2024/25.
A further meeting of the Finance and Resources Committee will take place on 6 February, before decisions are made at a special budget-setting meeting of the full council on 22 February.
Cammy Day, Council Leader, said:“In four weeks’ time we will need to set the city’s budget for the year ahead so I’m pleased to see these proposals suggest a positive way forward.
“My priority as we agree savings and investments will be to ensure we continue to protect the core services on which so many people depend. We need to stay true to our ambitions, to focus on our financial plan and ending poverty, becoming net zero and creating a good, inclusive place to live and work.
“What’s clear however is that we can’t achieve this alone. As a Council, we can shape and influence change through our policies and plans, but this needs to be a team effort, a pulling together of resources and plans across the public, private and voluntary sectors.
“So, while we develop sustainable financial plans to help us achieve savings, we also need to maximise the opportunities we have to raise more local income – including introducing a Visitor Levy as quickly as legislation will allow.
“It’s also imperative that we find a better way of working with the Scottish Government which, yet again, seems set on making Edinburgh the most underfunded Council in Scotland.
“An estimated £10m reduction in the city’s funding is hugely disproportionate and I am urging the Scottish Government to reconsider. It is not to late listen to local government and put this right.
“Over the next few weeks through COSLA and directly with Ministers I will continue to fight for fairer funding for our Capital City.”
Mandy Watt, Finance and Resources Convener, added: “This report, presented at Committee on 25 January, highlights the increasingly difficult decisions we’re taking ahead of the budget in February. The scale of our financial challenge is clear to see.
“Local authorities have suffered a decade of continuous real term income cuts from central government and Edinburgh is no exception.
“This is despite the unique pressures which come with being Scotland’s capital city – our projected population growth, the climate crisis, escalating poverty under the cost-of-living crisis, unprecedented service running costs and our housing and homelessness emergency.
“The suggestions being put forward by officers to balance the budget are hugely important and I’m immensely grateful for their work on this, particularly in proposing funding for Edinburgh Leisure and for finding potential alternatives to education cuts.”
While Labour leads the city, the party ranks second in terms of number of councillors in Edinburgh and runs the city in a controversial partnership with the Conservatives and Lib Dems.
Last year the City of Edinburgh council passed not a Labour, but a Liberal-Democrat budget.
Scotland’s councils are managing their money effectively, increasing reserves, with longer-term financial plans in place. Whilst no council was at immediate financial risk in 2022/23, there is no certainty this will continue, according to spending watchdog Accounts Commission’s latest financial report.
This makes an agreement between the Scottish Government and councils to secure a sustainable, longer-term funding arrangement to deliver local services all the more urgent.
Effective financial management within councils is crucial as budget gaps increase. Councils continue to rely on savings and reserves to balance budgets. Over half of councils used financial flexibilities in 2022/23. This helps with immediate budget pressures but defers costs to later years and fails to tackle underlying challenges to financial sustainability.
The Accounts Commission’s latest report assesses the financial position of Scotland’s councils during 2022/23 and the outlook for services beyond this.
While councils received more funding and income in cash terms in 2022/23, high inflation means this fell by nearly three per cent in real terms compared to the previous year.
A significant and increasing amount of funding continued to be either formally ringfenced or directed towards specific services and national policy objectives – reducing councils’ flexibility in using money to meet local needs.
Despite more core funding from the Scottish Government for 2023/24, there was a significant increase in councils’ total funding gap, due to pressures including increased demand for services, inflation and the cost-of-living.
Capital budgets were also significantly strained, risking knock-on impacts on the maintenance of key public buildings and infrastructure, for example schools, libraries and roads.
Councils recognise the risks ahead, but they need to innovate at pace and make difficult decisions about cuts to services to remain financially sustainable. Some councils have experienced opposition from within their communities when seeking to reduce services to balance budgets. This reinforces the need for frank consultation and engagement with communities when planning change.
Ronnie Hinds, Interim Chair of the Accounts Commission said: “There is intensifying pressures on council finances and services. Given the funding position for councils, there is increasing reliance on reserves and savings to deliver balanced budgets.
“This means councils are already making difficult decisions about future service delivery and the level of service they can afford. Having leadership and a workforce with the right skills will be crucial to deliver on this.
“Local government is the second largest area of Scottish Government spending, but despite rising demand for services, the proportion of funding to councils has reduced over the last decade.
“Urgent progress is needed to agree a funding framework between Scottish and Local Government. This will bring much-needed clarity and certainty of budgets for future years.”
The Accounts Commission’s Local Government in Scotland Financial bulletin for 2022/23 published today (Tuesday) reinforces COSLA’s warnings over the perilous state of Council finances over the last few years.
Commenting, COSLA’s Resources Spokesperson Councillor Katie Hagmann said: “The Accounts Commission’s Local Government in Scotland Financial bulletin for 2022/23, published today, reinforces what we have been saying about council finances and the really difficult and challenging decisions Councils have had to take in recent years.
“It is vitally important that these concerns, which have been consistently raised by COSLA, are now being backed up by hard facts and evidence presented by the Accounts Commission.
“There is widespread agreement from COSLA on the Accounts Commission’s key messages on the scale and financial challenge facing Scotland’s Councils, as well as the most pressing issues facing councils now.
“Some of these key messages, whilst extremely stark, come as no great surprise to those of us in Local Government:
In 2022/23 total revenue funding from all sources fell by £619 million (2.8 per cent) in real terms to £21.3 billion compared to 2021/22.
An increasing proportion of funding is ring-fenced or provided with the expectation it will be spent on specific services.
There is pressure on capital budgets, and this presents risks to the viability of local government capital programmes, many of which impact on key services (e.g., the construction and maintenance of schools, libraries, roads).
Councils are increasingly having to rely on savings and reserves as well as making increasingly difficult decisions to reduce or stop services to help balance budgets.
“Today’s Accounts Commission Bulletin is a true reflection of where we are now. Our reality right now is extremely challenging – years of real-terms cuts to council budgets have been coupled with increasing additional policy commitments and increased ring-fencing. With so much funding still directed, the ability to take local decisions on most of our Budget is almost impossible.
Councillor Hagmann concluded: “The picture painted by the Accounts Commission illustrates why COSLA is lobbying hard on the detrimental impact to communities of the Draft Scottish Government Budget, currently going through the Parliamentary process.
“The trends highlighted by the Bulletin are why Scotland’s Council Leaders are so disappointed and furthermore highlights the need to progress the ambitions of our joint Scottish Government and Local Government Verity House agreement. We must seek a solution to these long-term issues in order to protect the essential front-line service of our communities.
“COSLA’s President, Vice President and Political Group Leaders, from all parties have written to the Deputy First Minister requesting that a meaningful negotiation takes place, to protect those who rely on essential services, support our local economies and continue to progress our net zero national ambitions.”
Nearly a quarter of Scottish councils warn of effective bankruptcy
EVERY SINGLE COUNCIL plans cuts to services, affecting millions of residents
New research out today from Local Government Information Unit (LGIU) Scotland reveals that nearly a quarter of Scottish councils fear they will not be able to balance their budgets in the 2024/25 financial year.
This is despite the fact that every single council in Scotland plans to cut spending on services in the next financial year, with around two-thirds of respondents cutting spending on education, parks and leisure, and business support.
Alongside planned cuts, nearly all (97%) said that they would be increasing fees and charges, and nine in ten (89%) that they would be spending reserves.
The first annual LGIU State of Local Government Finance in Scotland survey, found more than three quarters of respondents (76%) believe these cuts will be evident to the public.
Had it not been for the Scottish Government decision to unilaterally declare a council tax freeze, every council would have raised council tax, most often by a significant amount. The proposed council tax freeze has contributed to an increasingly poor relationship between Scottish Government and local government.
The current state of the economy, manifested in high rates of inflation, affects wages, utilities and food, thus making service provision even more expensive for councils and was considered to be a problem by every respondent who answered. The associated cost of living crisis – which puts additional demand on services – was also considered to be a problem by over 90% of respondents.
There was widespread agreement on the most pressing issues in council finances: in addition to inflation, ring-fencing, staff recruitment, cost of living crisis and pressures linked to demographic change were all considered to be problems by more than 90% of respondents.
Adult social care and children’s services were considered the greatest shortest-term pressures on council finances, and adult social care by far the greatest long-term pressure.
Jonathan Carr-West, Chief Executive, LGIU Scotland,said: “Councils in Scotland are raising a red flag that council finances are completely unsustainable. With nearly a quarter of councils warning they may be unable to fulfil their statutory duties, it is only a matter of time before we see the first council in Scotland declare effective bankruptcy.
“Councils are pulling every lever available to them to balance their books. Every respondent said they were cutting spending on services, 97% that they would be increasing fees and charges, 89% that they would be spending reserves. But it is not enough. Councils have little to no confidence in local government finance and the issues behind the crisis are not going away.
“Scottish Government must work productively with councils to restore trust, remove ring fencing, identify revenue streams and reform core funding for councils to ensure residents, and particularly the most vulnerable in communities, are able to access the services they need and pay for.”
The Scottish Fire and Rescue Service (SFRS) have announced a programme of £11 million worth of cuts for 2023-24, which could lead to catastrophic removals of equipment and firefighter positions at fire stations.
Crewe Toll Fire Station in Edinburgh is due to be affected, with the potential loss of the station’s Turntable Ladder, the piece of equipment which allows rescues from height.
If the equipment is removed from the station, and if no other height appliance was available to attend, there would be no external rescue possible from above the fourth floor in a building.
Foysol Choudhury MSP this week visited Crewe Toll Fire Station to discuss the impact that these cuts would have on the firefighters and their ability to do their job safely.
Following the visit, Mr Choudhury said: “Firefighters risk their lives doing their jobs to save us, and our buildings, from fire.
“They depend on vital equipment to help them do this safely and so I am incredibly concerned that this equipment could be removed, meaning that rescues from height will not be possible.
“With over 50 buildings above four floors in the surrounding area, this proposal makes no sense.
“If there is a fire in a block of flats in the area surrounding Crewe Toll, what will happen?
“These cuts should not be made, knowing the dangers that fires can cause and the tragedies they lead to.
“You can sign the petition to help Crewe Toll Fire Station retain their height appliance here: https://chng.it/CJncjdvty7”
The Labour list MSP is supporting FBU Scotland’s #CutsLeaveScars campaign, which is calling for a reverse to the decision to cut £11million from services.
Mr Choudhury is also calling on the Scottish Government to urgently review their funding arrangements with the SFRS, so that these cuts are not forced and so that both firefighters and the public can be kept safe by a fully resourced fire and rescue service.
‘Early grip’ of budget to ensure best value for residents
The City of Edinburgh Council has begun budget setting early in an extra effort to ‘futureproof the services which matter most to residents and deliver them more efficiently’.
A report published this week outlines high level proposals for how the council will ‘innovate to lower costs and provide best value for the people of Edinburgh’ when it sets its next budget.
As it is developed further, the Financial Strategy and Medium-Term Financial Plan will provide a forward look and action plan to address the city’s longer-term financial challenge – while staying true to Edinburgh’s core values, priorities, and commitments made in the council’s business plan.
With a focus on improving services where possible rather than reducing them, the initial proposals are based on:
An assumed Council Tax rise of at least 3 per cent;
A programme of internal change involving a new system to better support HR activities;
More efficient use of Community Transport;
Exploring new income and trading opportunities;
Making the best use of the council’s estate so that it has fewer but better buildings;
Managing contracts and partnerships more efficiently and at lower cost;
Driving down costs by embracing digital solutions.
This early planning comes just a few months after Councillors controversially agreed a Lib-Dem budget for 2023/24 set against a backdrop of real-terms reductions in core government grant funding.
Councillor Mandy Watt, Finance and Resources Convener, said:We’re proud of our commitment to making Edinburgh a greener and fairer city, and to getting the basics right. And we’re equally proud of our track record of strong financial management. This strategic approach prepares us for the challenges that we’ll face over the coming years.
“The work we do now will pave the way for protecting and enhancing our investment in Edinburgh’s future, which we’ve committed to in the council’s Business Plan. We need to make this investment, whilst also prioritising the day-to-day services residents say matter most to them right now.
“Local authorities have suffered a decade of continuous real term income cuts from central government and Edinburgh is no exception. In fact, Edinburgh remains the lowest funded council per head in Scotland, despite the unique pressures which come with being Scotland’s capital city – our projected population growth, the climate crisis, and our well documented housing shortage.
“The Scottish Government could do more to support Edinburgh. Fast tracking the Transient Visitor Levy, and allowing councils to decide what to use the income for, would make a huge difference to our finances.
“I know that financial planning can cause concerns, particularly amongst our workers, so I want to make it absolutely clear that I remain committed to the council’s longstanding approach to no-compulsory redundancies.
“A further report re-affirming this will be brought to a meeting of the Policy and Sustainability Committee in August and we will continue to engage with Trade Unions throughout the ongoing budget process.”
