Councillor Mandy Watt, Finance and Resources Convener, looks ahead to Council Budget day on Thursday 20 February:
Very soon, councillors will be making tough financial decisions to balance the council’s budget and set the rate at which Council Tax will be charged.
Given the increasing need for investment in infrastructure and services, we’ll have to raise Council Tax, parking charges and other fees to fund the delivery of services we all rely on. We are considering a recommended 8% rise in Council tax.
An 8% increase adds £9.65 per month to a band D property and would provide a total of £26 million across all bands for investment and service priorities.
A huge amount of work has already been done to consider options, with detailed proposals considered yesterday at a Special meeting of the Finance and Resources Committee. This has been informed by a huge consultation exercise with residents, and I want to thank all 3,260 people who took part.
We know from the consultation responses that people are aware of the financial challenges we face following years of underfunding, and many are open to a fair rise to Council Tax after last year’s freeze.Other councils are proposing increases of 10% and above, but we’re trying to keep Edinburgh’s increase lower because that’s what the majority of residents would prefer.
Residents also told us they’d like to see Councillors focus on several key priorities when setting this year’s budget. These include spending on education, investing in local facilities and upgrading our roads and pavements. We’ll use the money from an increase in Council Tax to protect and improve these services.
Investment proposals include continuing the extra £12.5 million for roads and pavements that was added last year, with a further £5 million for road safety, especially around schools. There will be five new schools and five extensions of existing schools and £26 million for special needs infrastructure. Fox Covert Joint Campus will be replaced and there’s £15 million for permanently replacing Blackhall Library.
The decision to recommend an 8% Council Tax increase was not taken lightly. Over the last decade cuts in core grant funding of over £400 million have been mitigated by council staff continually delivering more with less resources.
This year’s financial challenges are the UK Government’s increase in national insurance, costing the council £9 million and the Scottish Government changing the stability funding floor, taking away £6.3 million. Fortunately, the UK Government passed on £18million of pEPR (‘producer pays’) funding, which filled those gaps.
While we can expect a slightly better government grant this year following yesterday’s Scottish Parliament budget, the consequences of last year’s cuts to affordable housing remain clear to see.
Huge pressures on health and social care remain unaddressed by national governments. Yet again, Edinburgh is expected to be the lowest funded local authority in Scotland per head of population and we’ll still need to find best value efficiency savings to deal with service pressures of £40million and keep the books balanced this year.
LAST WEEK the Scottish government confirmed that plans for a National Care Service (NCS) in Scotland have been scrapped in favour of an advisory board and smaller, more targeted reforms (write FRASER of ALLANDER INSTITUTE’s MAIRI SPOWAGE and EMMA CONGREVE).
The decision came after months of declining support from key organizations and stakeholders including COSLA, key trade unions and representative bodies for social care providers in Scotland.
Beyond the wavering support for the NCS plans, there is clear support for social care reform, particularly in enhancing access to and the quality of services.
Our interest in the National Care Service, and wider social care reform stems back to 2022, in which we conducted analysis of the NCS bill published in June of that year. Following this work, published in August 2022, we engaged with a number of stakeholders across the private, public and third sector.
Among concerns around governance and funding of the NCS, one of the key concerns from stakeholders we engaged with was the lack of good quality and timely data that is crucial to ensuring that any reforms to social care are well informed. In particular, the need to better understand what future levels of social care demand might be, the workforce requirements to accommodate this, and the associated expenditure on social care.
Our concerns about the lack of investment in social care research were highlighted in our response to the Wave 2 consultation. The Scottish Government has not commissioned any work in this area, and we have not been able to find independent funders willing to fund work of this nature in Scotland.
It is our view that projections of demand and cost of the current service, and any future reforms, is urgently required.
New labour market data published
The latest data on the labour market in the UK was published last week. There are many documented issues with the data at the moment due to the challenges faced by the Labour Force Survey, which means the headline figure are no longer considered accredited Official Statistics.
If you can set that aside for a moment, the headline results show on the surface a strong Labour market in Scotland, with high employment (74.1%) and low unemployment (3.8%). Inactivity rates remain slightly higher than the UK at 22.9%.
There are a number of other data sources published alongside the LFS data which is used to supplement our understanding of what is going on in the Scottish economy. One of these is the payrolled employment data, known as the PAYE Real-Term Information, which is published every month by the ONS. This draws on administrative records, and so is likely to be more reliable in terms of employment (although, of course, tells us nothing about unemployment or inactivity).
This data shows that payrolled employment is almost 3% higher in Scotland than pre-pandemic levels. However, we had a look at replicating the sectoral breakdowns in this interesting piece by think.ing, which looks at government-dominated sectors vs the rest.
Chart:Payrolled employment in all sectors, government dominated sectors (public administration, health and education, and total excluding government, Scotland, January 2020=100
Source: ONS
This shows that once the government dominated sectors are excluded, payroll employment has been falling since March 2024, and is now almost back at the levels seen in January 2020. In contrast, government dominated sectors are 8% about pre-COVID levels.
Given some of the challenges facing the private sector in the first half of 2025, including large increases in employer National insurance contributions which will come in in April, the trend in private sector employment is concerning, and points to a weakness masked if we just look at employment in total.
However, it is worth emphasising again that this is just payrolled employment, and does not cover self-employment.
Scottish Liberal Democrat communities spokesperson Willie Rennie has criticised cuts to local authority funding which have seen the number of public toilets fall by 25% since the SNP came to power and four local authorities no longer having any public toilet facilities.
Analysis of data uncovered through a Scottish Liberal Democrat freedom of information request reveals that:
Across the 18 councils which provided data for both 2007 and 2024, there has been a 25% decrease in the number of public toilets during this period.
Across the 31 councils which provided data for both 2018 and 2024, there has been an 8% decrease in the number of public toilets during this period.
Clackmannanshire, East Dunbartonshire, Falkirk and South Lanarkshire now have zero public toilets.
Highland Council has closed the largest number of toilets, with 37 having closed since the SNP came to power. Edinburgh has closed more than half of its public toilets.
Commenting on the figures, Mr Rennie said:“Since the SNP came to power public toilets have been shut down left, right and centre.
“This is not just about public convenience. For some older or disabled Scots, a lack of accessible bathrooms can prevent them enjoying public spaces or getting out and about in their communities.
“That’s a depressing state of affairs for our country to be in but it the inevitable consequence of the decisions that successive SNP First Ministers have taken over the past 17 years.
“Scottish Liberal Democrats want to see local authorities handed real financial firepower to rebuild battered local services like public toilets and other essential amenities like electric charging points and waste disposal points.
“Looking ahead there also needs to be a commitment from the next Scottish Government not to treat local authorities as second-class services.”
THINK TANK AND FORMER COUNCIL CHIEF EXECUTIVES JOIN FORCES
Reform Scotland and the Mercat Group collaborate on ideas for local decentralisation
Former local authority chiefs ask: “Has Holyrood become Scotland’s biggest Council?”
Reform Scotland, the non-partisan think tank, and The Mercat Group, an informal network of former chief executives of Scottish local authorities with over 220 years of public service between them, including 70 years as chief executives, are today announcing a collaboration.
Jointly, Reform Scotland and The Mercat Group will advocate for decentralisation of power from the Scottish Parliament to local authorities, along the lines originally envisaged by the architects of the devolution project.
The collaboration begins today with an article – Parliament or Council?: 25 years of evidence– written on behalf of the Mercat Group by Bill Howat, former Chief Executive of Comhairle Nan Eilean Siar, in which he states that “any reasonable, rational review of that evidence could only conclude that it has not been a success in terms of devolving power beyond Edinburgh”.
Bill Howat, former Chief Executive of Comhairle Nan Eilean Siar said:“Any reasonable, rational review of that evidence could only conclude that it has not been a success in terms of devolving power beyond Edinburgh. In fact, all the evidence points to growing centralisation of power in Holyrood. That is not good for local democracy, nor does it seem like good governance.
“There is now a need to revisit and reset the way all public services in Scotland are organised, delivered and financed. We should create a Scottish Civic Convention to take forward the public conversation necessary to conduct such a review.
“There may be other options but the central aim should be to develop a transition plan to ensure decisions on the delivery of all public services are taken at the lowest local level consistent with democratic and financial accountability.
“Scottish local government is in danger of becoming the delivery arm of the Scottish Government; indeed some would argue we have already reached that position. We might fairly ask: has Holyrood become Scotland’s biggest council?”
Chris Deerin, Director of Reform Scotland, said:“At a quarter-century old, now is the time to re-examine those areas of devolution which have not delivered as we all hoped they would. Local government is one of these.
“Other countries enjoy the benefits of properly empowered local government, fulfilling most of the day-to-day operational roles upon which people depend, with central government adopting a more strategic outlook.
“In Scotland, we are failing to realise the potential of local freedom and diversity. Decentralisation is long overdue, and we are delighted to be teaming up with the Mercat Group to generate the ideas needed to make it happen.”
Bill Howat’s blog – Parliament or Council?: 25 years of evidence – can be read here
Public services will come under further threat if the Scottish Government does not set out and deliver a clear and costed vision for public service reform, says Scotland’s spendingwatchdog Audit Scotland.
Spending pressures have become more acute in recent years and are forecast to grow. But ministers have continued to rely on short-term decisions to balance the books, rather than making fundamental changes to how services are delivered.
Public service reform is a key component of the Scottish Government’s approach to fiscal sustainability. But there is no evidence of large-scale change on the ground, while the Scottish Government:
has not yet fully established effective governance arrangements for a reform programme
does not know what additional funding is required to support reform
and has not provided enough leadership to help public sector bodies deliver change.
The Scottish Government has not been transparent enough with the Scottish Parliament or the public about the medium-term risks it is facing.
The medium-term financial strategy and financial plans for the NHS and infrastructure investment have all been delayed. The absence of these documents makes scrutiny of the current uncertain financial situation more difficult.
Stephen Boyle, Auditor General for Scotland, said: ““People do not fully understand the medium-term risks public services are facing because of a lack of transparency from the Scottish Government.
“The reality is that we need a fundamental change to how public money is spent to ensure services can meet demand and remain affordable beyond the short-term.
“To turn that into action on the ground, the Scottish Government must set out a clearer vision of what its plans for reform will achieve, including delivery milestones and the likely impact of reform on services and people.”
Budget speculation, the economy returns to growth, the impact of cuts, and the disability employment gap
Three weeks still to go, and speculation about what will be in the Budget on 30th October continues (writes Fraser of Allander Institute’s MAIRI SPOWAGE, SANJAM SURI and EMMA CONGREVE).
Will the Chancellor change her fiscal rules? It looks likely that there will be some movement on this, whether in the definition of debt or something more fundamental, however much that could undermine their commitments in the manifesto.
Will there be increases in Capital Gains Tax? The speculation on this has reached fever pitch, with some stories suggested rates from 33% to 39% are being considered. (Interestingly, when we look at the ready reckoners from the HMRC, changes of this magnitude in some forms of CGT actually may result in less revenue when behavioural effects are taken into account). There certainly seems to be expectations out there in the economy that the rate may change, with lots of signs that disposals have increased hugely in anticipation.
Will there be increases to employer national insurance contributions? There has been much discussion about this, given the commitment of the UK Government not to “raise taxes on working people”, and due to the fact that the PM would not rule this out this week. A 1 percentage point rise in employers NICS would raise almost £9bn according to the ready reckoner (although we think that doesn’t include the additional costs to departments).
We’ll be going into the detail of some of these issues in the run up to the Budget, so there will be plenty for you all to chew over as we wait… and wait… for the Budget.
UK Economy Returns to growth in August
Data released this morning showed that the UK economy posted its first monthly GDP increase since May 2024. ONS reported this morning that monthly real GDP grew 0.2% in August 2024. There were no revisions made to the “no growth” months of June and July. While monthly numbers were in line with consensus forecasts, they show an economy that has slowed down from the beginning of 2024.
The good news is that growth in August came from all key sectors- with services rising by 0.1%, and production and construction rising by 0.5% and 0.4% respectively. Crucially- August was also the first time all three sectors positively contributed to growth since March 2024.
A more granular breakdown of service sector growth indicates that the biggest positive contribution came from the professional, scientific, and technical activities subsector- where monthly change in output was +1.6% from the previous month. Despite overall growth in services sector- seven subsectors saw decline in economic activity- with arts, entertainment, and recreation falling 2.5% over July 2024.
The production sector grew by 0.5% in August after hefty decline of 0.7% in July. Despite a rebound in August, the production output is essentially flat since the end of May 2024. The biggest contributor to production sector came from 1.1% rise in manufacturing activity- driven by transport equipment manufacturing However, mining and quarrying output declined 4.0% over July 2024- continuing their downward trend since end of December 2023.
What is the impact of cuts in spending?
When the Scottish Government presented their Fiscal Statement to parliament in early September, the Cabinet Secretary for Finance said that impact assessments had been done to understand the impact that the announced cuts could have on different groups.
These assessments were not published at the time, but finally were published last week. We welcome the publication of these, and although there are lots of criticisms that could be made of the assessments, it is good to see this transparency. One area of weakness is assuming that if funding was maintained at previous levels, there will be minimal impact, which assumes that previous levels was the correct level… so why was the budget being increased in the first place?
One of the main things to note though is the lack of analysis of cumulative impact on groups. A number of “minimal impacts” could still add up to something significant if they are affecting the same group.
Final report of the parliamentary Inquiry into the disability employment gap published
In 2016, the Scottish Government published A Fairer Scotland for Disabled People, which outlined how the government intended to shape policy – especially labour market policy – for disabled people living in Scotland.
One of the key goals this report outlined was reducing the gap in the employment rate between disabled and non-disabled adults. In 2016, 80.4% of non-disabled working aged adults were employed in Scotland, compared to 42.8% of disabled working aged adults, making for an employment gap of 37.5 percentage points. The government’s goal was to cut this gap in half by 2038.
In 2023, the Economy and Fair Work Committee in Scottish Parliament launched an inquiry into how this policy goal was going. In fact, in 2023, it seemed like it was going quite well.
The gap was down to 30.3 percentage points, which was actually ahead of schedule: if progress were linear, the disability employment gap would drop by about 0.85 percentage points each year, meaning that it would be 31.5 percentage points in 2023.
Two of our economists at the FAI, Allison Catalano and Christy McFadyen, contributed to this inquiry through a fellowship with the Scottish Parliament Information Centre (SPICe). Their work, which we published back in January, found that the majority of the change in disability employment is due to a rise in disability prevalence, rather than any specific policy.
Their report also highlighted some significant data issues: people with different types of disability have vastly different capacities for employment, vastly different support needs within employment, and vastly different rates of employment. Yet, in Scottish data and policymaking, disabled people are often treated as a singular entity, meaning that it is not possible to understand where policy interventions might be most effective.
The final inquiry publication highlights our work and a variety of other issues which will need to be addressed in order to improve work access for disabled people, all of which can be found here. They have produced 44 recommendations to improve employment prospects for disabled people.
Industrial action looming across Scotland paused as members vote
GMB Scotland today suspended looming industrial action in Scotland’s local authorities after receiving a revised pay offer.
The union, one of the biggest in Scotland’s local authorities, paused eight days of strikes in waste and cleansing, due to start on Wednesday, to allow members to vote on the new terms.
GMB Scotland’s local government committee met this morning to discuss the offer from Cosla, representing Scots councils, involving a 3.6% increase for all grades with a rise of £1,292 for the lowest paid, equivalent to 5.6%.
Keir Greenaway, GMB Scotland senior organiser in public services, said: “This offer is a significant improvement on what came before but our members will decide if it is acceptable.
“It is better than that offered to council staff in England and Wales, would mean every worker receives a rise higher than the Retail Price Index and, importantly, is weighted to ensure frontline workers gain most.
“As a gesture of goodwill, we will suspend action until our members can vote on the offer.
“It should never have got to this stage, however, and Scotland’s council leaders have again shown an absolute lack of urgency or sense of realism.
“For months, we have been forced to waste time discussing a series of low-ball offers when it was already clear the Scottish Government needed to be at the table.
“The obvious reluctance of some council leaders to approach ministers has only caused needless uncertainty and threatened disruption.
“That is no way to run a railroad or conduct serious pay negotiations.”
UNITE has also called off imminent strike action and UNISON are expected to announce their position later this afternoon.
Just three days short of its second anniversary, the Covid-19 Public Inquiry published the report from the Module One investigation into the resilience and preparedness of the United Kingdom (writes TUC’s NATHAN OSWIN).
The report highlights the devastating consequences of austerity in the decade that preceded the pandemic and the risk of vulnerability in the UK population.
The Impact of austerity on public services
Inquiry Chair, Baroness Hallett, states plainly that, “In short, the UK entered the pandemic with its public services depleted, health improvement stalled, health inequalities increased, and health among the poorest people in a state of decline.” This blunt assessment underscores the critical condition of the nation’s public services as they faced the unprecedented challenges of the Covid-19 pandemic.
The role of the TUC and evidence from frontline workers
As Core Participants in the Inquiry, the TUC played an integral role in the process, working with our unions to provide the evidence that ten years of under-investment and real terms funding cuts to public service in the run up to the Inquiry left key services struggling to cope.
“Public services, particularly health and social care, were running close to, if not beyond, capacity in normal times” the report states, a statement that doctors, nurses, porters and social care workers have been telling us all.
The Inquiry also heard that “there were severe staff shortages and that a significant amount of the hospital infrastructure was not fit for purpose. England’s social care sector faced similar issues. This combination of factors had a directly negative impact on infection control measures and on the ability of the NHS and the care sector to ‘surge up’ during a pandemic.”
A call to avoid past mistakes
The report is both a damning indictment and a call to never repeat the mistakes of that decade – a desperate reminder of the need to invest in our public services.
And while the report is not naive about the costs needed to make the UK more resilient ahead of the next pandemic – a matter of when not if – it reaches the conclusion that “the massive financial, economic and human cost of the Covid-19 pandemic is proof that, in the area of preparedness and resilience, money spent on systems for our protection will be vastly outweighed by the cost of not doing so”.
Addressing health inequalities
What’s more, the Inquiry is crystal clear as to the price we pay for inequality across our communities. It notes that at the outset of the pandemic, the UK had “substantial systematic health inequalities by socio-economic status, ethnicity, area-level deprivation, region, social excluded minority groups and inclusion health groups”.
And Baroness Hallett’s report correctly states that these inequalities weakened the ability of the UK to cope, stating that “resilience depends on having a resilient population. The existence and persistence of vulnerability in the population is a long-term risk to the UK.’
Recommendations for the future
The recommendations themselves speak of the need to engage with wider society for planning on how we handle a crisis and to take into account the “capacity and capabilities of the UK”.
No one knows the capacity and capabilities of our public services better than the staff that deliver them and the TUC and its affiliated unions stand ready to assist the government in this vital work.
Conclusion: Building a resilient future together
It is by working in partnership – with proper resources going into our public services – that we can truly learn the lessons this report sets out and secure the resilience and preparedness that the UK needs for a future full of challenges.
First Minister John Swinney will welcome new Prime Minister Sir Keir Starmer to Scotland today.
Speaking ahead of the meeting, the First Minister said: “I was really pleased to have the opportunity to speak to the Prime Minister on his first day in office and to congratulate him and wish him, and his family well.
“I look forward to welcoming the Prime Minister to Scotland where I hope to have constructive discussions with him on our shared priorities for the people of Scotland. This includes eradicating child poverty, growing the economy, prioritising net zero, and ensuring effective public services.
“I welcome the Prime Minister’s commitment to forge a positive relationship between our governments and for our part, the Scottish Government is committed to working constructively with the UK Government to build a better Scotland.”
WHATEVER your political allegiances. the relationship between the two governments is crucial to the people of Scotland. I’d like to think it will be more constructive than it has been in the recent past – Ed.
The trade union movement will work with Keir Starmer to deliver change
What an extraordinary moment in British politics (writes TUC General Secretary PAUL NOWAK). Labour back in power with a near-record majority. The Conservatives brutally ejected from office. A dozen cabinet members gone. A red wave in Scotland at the SNP’s expense. But while it’s easy to get carried away by the seismic nature of this election – we cannot afford to be distracted. We have a country to fix.
When I congratulated Keir Starmer this morning my message to him was clear. The trade union movement stands ready to work with the new government to repair and rebuild Britain – and to deliver the change working people desperately need. After 14 years of wretched Tory rule and chaos, I am not blind to the size of the task this incoming government faces.
The Conservatives have left behind a trail of destruction for all to see. Stagnant growth and wages. Rising in-work poverty. Broken public services. The charge sheet goes on and on. But despite all of the damage wrought, I am optimistic. After nearly a decade and a half in opposition, Labour can finally begin transforming the country – an urgent and necessary challenge that must be grasped with both hands. So where should we start?
First and foremost, we need to get our economy growing again. Unions and business have been crying out for years for a proper industrial strategy. The Green Prosperity Plan starts us on the road to economic recovery. And it will be a breath of fresh air to work with ministers who are actually serious about protecting and creating good jobs, and boosting skills and productivity.
But securing growth alone is not enough – we also need better living standards. Labour needs to act urgently to make work pay. We currently have over four million people who are trapped in jobs that offer little or no financial security. This is a national disgrace.
The UK’s long experiment with a low-wage, low-rights economy has been terrible for productivity and workers alike. Labour’s New Deal for Working People – delivered in full – will help end the Tories’ race to the bottom on employment standards.
A race to the bottom that has allowed good employers to be undercut by the bad, and scandals like the illegal sacking of 800 seafarers at P&O Ferries go unpunished. Labour’s plans will be a genuine gamechanger. Employment rights from day one. A ban on zero-hours contracts. An end to fire and rehire. New rights for unions to access the workplace. And the scrapping of anti-union legislation.
These are all part of a comprehensive new package of rights that will be good for workers, good for businesses and good for the UK economy. Inevitably there will be some siren voices in the business community who will seek to delay and water down this legislation. But it is vital Labour stays the course and ignores the doomsayers.
All the tired arguments that have been made against improved rights and protections at work echo those used against the minimum wage – now widely acknowledged to be one of the great policy successes of the last 25 years.
The naysayers were wrong then and they are wrong now. It is also vital that immediate work begins on repairing our crumbling public realm. At the heart of the pressures on our schools, hospitals, prisons and social care system is a huge workforce crisis. Across the NHS and social care alone there are nearly 300,000 staffing vacancies and in education the number of teaching vacancies has more than doubled in the past three years.
With morale at rock bottom – after more than a decade of Tory vandalism and neglect – Labour has the chance to signal a new direction of travel. We’ve already seen really encouraging commitments on scrapping tax breaks for private schools to fund new teachers in the state sector, and on closing non-dom loopholes to help bring down waiting lists. It’s no secret though that I want the party to go further and that we explore all funding options for rebuilding our public services.
The TUC has previously called for a national conversation on taxing wealth and I remain convinced that policies like equalising Capital Gains Tax with the taxes paid on earnings could bring in much-needed revenues. People voted in this election because they wanted real change – and Reform’s populist insurgence is a timely warning of what happens when governments fail to act.
And this question of delivery is the crux of the matter. After 14 years of national decline the country has finally got the Labour government it desperately needs. I know how ambitious Keir Starmer and his team are to improve working people’s lives, and the trade union movement wants to work with them.
Of course there will be moments of tension. That comes with being a critical friend. Our job is to speak up for working people and our members and to make sure their voices are heard at the heart of government – even when the message is difficult.
But the prospect of national renewal is real. Decent jobs, strong public services, a brighter, fairer future for all our children. The work will be hard and it starts today – but together we can realise a better future.
