Scotland’s local authorities face unprecedented financial pressures

Marischal College in Aberdeen is Aberdeen City Council's HQ

COUNCIL finance chiefs have warned MSPs that Scotland’s local authorities face unprecedented financial pressures.

The representatives from three councils told Holyrood’s local government housing and planning committee that they faced huge challenges as they prepared to set next year’s budgets.

Glasgow’s finance director Martin Booth said the pressure from increased inflation had made this year particularly difficult.

He added: “That’s what’s made this the worst, or most difficult year we’ve ever had”.

A common complaint was that most central government funding was directed for specific purposes – giving councils little leeway on where to make savings.

Ministers claim that only 7% of funding is ring-fenced by law, but local authorities estimate that 60-70% is, in effect, earmarked for areas like education and social care.

Argyll and Bute executive director Kirsty Flanagan said that meant cuts were not distributed evenly across services.

“You’ve got your waste, your bins, your leisure facilities, your cultural facilities – it means it’s a deeper cut for them,” she said.

The directors from Glasgow, Dundee and Argyll said the bulk of the extra £570million for councils announced in the Scottish Budget was linked to new policy initiatives like the rollout of free school meals in P6 and P7, or funding to meet pay deals.

When those commitments were stripped out, that left only about £70milion of extra funding for councils, they argued.

They also warned that money allocated for new policies often failed to take into account inflation in future years, meaning that core funding was eroded over time.

Ms Flanagan said policies such as phasing out petrol and diesel small vehicles by 2025 would eat into Argyll and Bute’s capital funding grant, meaning there was less available for school building improvements.

Dundee’s corporate services director Robert Emmott said the council had already tried to make some services more efficient, so increasingly the only option for significant savings was to do less.

The directors said council tax offered only a limited source of income. Rates would have to rise by 20-25% to cover their estimated budget shortfalls, something that would not be acceptable, they said.

The Scottish Government told the BBC it recognised the challenging circumstances facing councils, and claimed that “a decade of austerity” had seen a 5% real-term cut in the amount of money that Holyrood received from Westminster.

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