Local Government spending decisions are being increasingly directed by Scottish Government, and the way Local Government finances are presented by Scottish Government is potentially confusing for the general public. This can lead to raised expectations and lack of clarity in our communities about the reality of what is now possible to deliver on the ground, COSLA said today (Monday 16th January).

COSLA was clear that this year we needed and asked for a £1bn extra in real terms however we have ended up with £38million and that this was simply not good enough. COSLA added that to avoid socially harmful cuts, the finances of Local Government need early and proactive discussions to avoid an annual public argument about the reality of what can and cannot be afforded by Councils. Councils also need more freedom to address local priorities and the ability to focus on improving outcomes.

Commenting today, COSLA’s Resources Spokesperson Councillor Katie Hagmann said:  “Given the significance of our council services to the lives and livelihoods of everyone across Scotland, communities deserve clear and consistent facts in relation to Local Government finance rather than a yearly debate on how much money is or is not available.  All our communities are concerned about is the level of service they can expect that there is support for the most vulnerable and want to ensure their local environment looks and feels as good as it can – all of these things are under threat because of successive years of underfunding.

“Last week saw the publication of the Accounts Commission’s report on the health of council finances. The report makes it clear that councils are going to have to take very tough decisions over the next few years to balance the books, given the financial pressures they face.

“Responding to the Accounts Commission report, Scottish Government has quoted both real and cash terms increases of £2.2 bn between 2013-14 and 2022-23, but this is contradictory.

“We owe it to our communities to be clear, consistent and transparent about the starting point and how much less, in reality, councils have to spend year on year on the services that our communities rely on.

“In 2013-14, the Local Government funding settlement was worth £10.3 bn. Looking to 22-23 the Scottish Government provided £12.5 bn. This does equate to a £2.2 bn cash increase. However, that increase is heavily ring fenced and directed funding for core services and local priorities has stayed the same.

“The reality of having the same amount of money this year as 10 years ago for core services is a real terms cut. As well as increasing costs, this money is also now required to deliver more services than it was 10 years ago - Scotland’s population has increased, the number of households has gone up, COVID has left a legacy of support needs for the most vulnerable and as people live longer, their care needs have become more complex. This is just a snapshot of the demands being faced by councils, not to mention inflation and energy costs.

“For 2023-24, Scottish Government has stated that councils have seen a “£570m increase in their budgets” but the reality is, that only £38m of this can go towards pressures such as inflation, pay and service demand with the rest is for policy commitments that are already in the system, for example £100m to meet Real Living Wage commitments in social care.

“To put this into perspective, a 1% increase in pay across the Local Government workforces equates to around £100m. £38m will not go very far, especially when combined with energy price hikes, supporting the most vulnerable and our commitments to tackle the climate emergency.

“This year, demand for services like social care is at an all-time high but given the range of pressure facing councils, they simply don’t have the resources they need to work towards keep people out of hospital. Each day during winter, there is quite rightly a focus on getting people out of hospital to free up beds– currently councils support just over 97% of patients to be discharged without delay. The problem is not just getting people out of hospital but stopping them going in - councils simply don’t have the resources they need to provide the care packages or the interventions that prevent ill-health.

“COSLA’s key concerns are not only the socially harmful impact of cuts on our communities, but the way in which Local Government finance has been presented to them. The messaging is that there is more money for essential services each year despite this not being the case with councils asking communities about where they want to see cuts and reductions if essential services, like schools, roads, waste collection, child and adult protection, environmental health and social care are to continue to be delivered, every day of every year.”