Budget proposals will hit front-line council services, MSPs warned

People in Scotland will see the impact of cuts across the country if funding measures laid out in the draft budget are approved, MSPs have been told.

The budget, announced in December by Finance Secretary Derek Mackay, is undergoing scrutiny by the Local Government and Communities Committee at the Scottish Parliament.

The Scottish Government has stated there will be an overall increase in funding for councils in the budget, however concerns have been raised that there will be less “core funding” for day-to-day services when protected funding is not included in the overall settlement.

A portion of the budget funding is ring-fenced for priorities agreed by the Scottish Parliament, such as increasing early learning provision and education.

Scottish Budget
Finance Secretary Derek Mackay announced the draft Scottish budget in December (Andrew Cowan/Scottish Parliament)

Speaking to the committee on Wednesday, Cosla’s resources spokeswoman Gail Macgregor said a reduction in local authorities’ core budgets could lead to cuts in services such as libraries, funding for road repairs, leisure and sport, parks and employability support.

“Bluntly, the draft settlement, as it is, will impact jobs, front-line services and economic growth,” she told MSPs.

“The draft budget sees a cash reduction at present to core revenue budgets of £237 million (2.4%) and a cash cut to the core capital budget of £17 million, or 2%.

“The very things that people rely on day-to-day and actually have probably taken for granted for quite a long time, we’re beginning to see a cutback in their opening hours and what they’re able to deliver.

“The reality is that people haven’t noticed until now but going forward with the settlement as it is, people are going to begin to notice and that is the reality on the ground for folk.

“What is clear is that as announced, the draft budget will have a significant impact on Scottish councils, on our communities and on our inclusive growth across Scotland.”

Conservative MSP Graham Simpson, a member of the committee, said: “I think members of the public will be completely baffled by all this when they see an overall increase in the budget settlement for local government and then every single council in Scotland is probably going to turn round and say, ‘we’re having to make cuts’. People will just be scratching their heads at that.”

Ms Macgregor responded by explaining that the commitment to deliver on Government priorities under current plans would lead to a reduction in other areas.

Social care, education, early learning, housing and childcare services are core services which have to be delivered by local authorities.

Ms Macgregor said: “They are excellent priorities, they’re priorities that we support, but they require additional funding.

“Scottish Government priorities must come fully funded, but not at the expense of what we’re doing on a day-to-day basis.

“When we reach the stage where we have £237 million cut out of our budget, that £237 million has to come from 42% of our core budget which is not ring-fenced and not protected.

“So the £237 million, which is the estimated shortfall that we have at the moment, can only be taken from 42% of the budget.

“The £400 million that has been given from the new initiatives absolutely will be spent on those new initiatives and quite rightly so, but it will be at the expense of something else.”

.@DerekMackaySNP will appear before the @SP_LocalGovt today to @scotgov local govt settlement.#ScotBudget provides local govt with a real terms increase in both revenue and capital funding, and a real terms increase in total overall support through a £11.1 billion settlement. pic.twitter.com/LY2ILGvWcS

— ScotGovEconomy (@scotgoveconomy) January 9, 2019

Mr Mackay told the committee the Scottish Government had reduced ring-fencing, although he admitted councils would have to make “efficiencies”.

He also said he rejects the argument that protected funding should not be considered a part of the core budget of councils.

“If I am forced to discount resources in the settlement for a purpose, then by definition there is less money.

“But in reality, there is more money in cash terms and in real terms. Of course, when you use the public sector deflator, as we understand it, there is a real terms increase.

“So there is more money in the settlement going to local government as outlined in the budget and as proposed by the circular.

“So, I don’t accept the argument that I should discount resources just because someone else wants to define it in a different way.

“In the same way that any part of the public sector right now has to look at efficiencies, has to look at balancing the books, of course local authorities will have choices to make.

“But I don’t think you can separate out this issue of core and other things.”

“We all have to make choices and priorities in the context of continuing UK austerity delivered by the Conservatives.”

Labour finance spokesman James Kelly said: “Once again, the mask has slipped and SNP Finance Secretary Derek Mackay has been forced to admit councils face having to make yet more cuts.

“Despite all the spin and bluster from the SNP, local lifeline services such as schools are facing cuts because of the decisions of Nicola Sturgeon’s Government. That is unacceptable.

“Rather than passing on Tory austerity to Scotland, the SNP should use the powers of the Scottish Parliament to invest in our economy and society so we can deliver real change across the country.”