Councils face core revenue grant funding cuts under SNP’s Budget: analysis

Every council in Scotland will face cuts to its core revenue grant funding under the Scottish Government’s Budget plans, according to independent analysis.

A report published by the Scottish Parliament Information Centre (SPICe) indicates a 3.4% reduction in real terms core revenue grant funding for local authorities.

Announcing the Budget at Holyrood last week, Finance Secretary Derek Mackay said there would be “a real terms increase in revenue and capital funding, and an overall real terms increase in the total local government settlement”.

The total allocation to local government in the 2019-20 Budget is £10,779.9 million, comprising the general revenue grant, business rates and smaller amounts for the general capital grant and ring-fenced grants.

It represents a 2.5% increase in cash terms, or a 0.7% increase in real terms.

If revenue funding from other portfolios outwith local government and communities, but still from the Scottish Government to local authorities, is included, this rises to £11,071.2 million – a cash increase of 3.8% (£405.1 million), or 2% (£210.5 million) in real terms.

The £210 million real terms figure was used by the Cabinet Secretary as the headline local government figure in his Budget speech.

However, when looking specifically at the non-ring-fenced revenue funding available for councils, this falls £157.2 million (1.7%) in cash terms, or £319.1 million (3.4%) in real terms between 2018-19 and 2019-20.

The largest cuts are seen in Shetland (-3.9%), West Dunbartonshire (-3.8%) and Glasgow City (-3.6%).

The smallest cuts were made in Angus (-1.8%), Fife (2.2%) and in East Ayrshire (-2.4%).

Scottish Conservative MSP Graham Simpson said local services would “suffer badly” because of the funding decision.

“This damning evidence shows every single council in Scotland suffered as a result of the SNP’s latest budget, when ring-fenced funding is taken out the equation,” he said.

“And there’s no excuse for this reduction when the money coming from Westminster is going up.

“This takes autonomy away from local authorities, and could force council leaders to lobby for even more punishing tax increases on hardworking households.

“As a result of this damaging decision, local services up and down the country are going to suffer badly.”

Scottish Liberal Democrat leader Willie Rennie urged ministers to re-evaluate the decision.

Mr Rennie said: “The impartial analysis from SPICe shows that local councils will be facing impossible tasks. The SNP Government has deliberately cooked the books to disguise cuts that will hit every community.

“Scottish ministers need to admit they have made a mistake and get back round the table to give local authorities the chance to save local services from the chop.”

Scottish Greens local government spokesman Andy Wightman said: “This briefing shows Greens are right to stand up for fairer funding for front line council services and to hold out for fundamental reform to local taxation.

“The fact that between 2013-14 and 2018-19, the local government budget fell by over 7% while the Scottish Government’s budget only fell by 0.8% shows that SNP ministers are choosing to sacrifice local services such as schools and social care.

“This situation cannot continue and ministers must commit to end the outdated, unfair council tax and broaden councils’ tax base if they want Greens to enter formal budget talks – talks in which we would insist councils receive a genuinely fair settlement.”

Councillor Gail Macgregor Cosla’s Resources spokeswoman said: “Today’s independent report from SPICe casts aside any doubt on Cosla’s interpretation of the budget.

“Sadly the report clearly demonstrates the erosion of Local Government’s core revenue budget.

“The report demonstrates that we are right to have a genuine concern about the impact that this budget will have on essential services to our communities and the resulting impact it will have on the country as a whole.”

Public Finance Minister Kate Forbes said:  “It is wrong to focus on certain elements of the funding support for local government.

“Excluding £507 million of specific revenue grants to fund services such as the expansion of Early Learning and Childcare and the Pupil Equity Fund, as well as the £151 million of revenue funding still to be distributed, presents a distorted picture of the facts.

“We are delivering a funding package of £11.1 billion for local authorities next year – which the SPICe figures confirm is a real terms increase of over £210 million, or 2%, for essential public services in Scotland.”