Councils insist fair funding deal needed to help recover from Covid-19 pandemic

Scotland’s councils face a funding shortfall of £360 million as the Covid-19 crisis has left budgets “strained”, local government leaders said.

The local authority organisation Cosla said the pandemic has resulted in a loss of income for councils, with cash raised from services such as parking and planning applications down along with reduced revenues from places such as libraries, art galleries, theatres and sports facilities.

It also complained that councils had been hit by a “reduction in core grant funding” from the Scottish Government since 2013-14 – with this coming at the same time as authorities were having to deal with increased demands.

Cosla now wants Finance Secretary Kate Forbes to give local authorities almost £1.3 billion in the Scottish Budget for the coming year – which is due to be set out later this month.

Councils need more than £1.2 billion for day-to-day running costs, as well as further £637 million for capital spending, the organisation claimed.

It warned that any reduction in cash from the Scottish Government “will mean the impact on communities of Covid will be deeper, longer lasting, with  widening inequalities”.

As well as demanding “fair funding” for councils, Cosla wants ministers to commit to not having any limit or cap on council tax increases.

The Scottish Government should also ensure policy commitments which are delivered by local authorities are “fully funded”, it added.

Cosla resources spokeswoman Gail Macgregor said: “This year, across every community in Scotland, local government’s essential role has been magnified and once again we have delivered for our communities.

“Nobody in Scotland has been unaffected by this pandemic and the financial impacts of Covid-19 are severe. Individuals, families and businesses have all felt the effects and continue to look to councils for support every day.

“Sustaining this lifeline support is placing extreme pressure on already strained budgets, and without fair funding for local government this year, the consequences for the most vulnerable in our communities would be unacceptable.

“That is why we need fair funding for 2021-22 that respects our communities. Without this, there will be further cuts to services, reductions in spending locally, increases in the inequalities exposed by the pandemic and a much slower recovery.”

Cosla president Alison Evison said: “The Covid pandemic has shown exactly how much the public rely on us as leaders and as providers of vital services.

“The reality is that in recent budgets, the Scottish Government has chosen not to provide enough funding for the essential services that communities rely on day in, day out.

“On top of this, this year we have had to contend with Covid-19 which has seen the inequality in our society grow.”

She insisted: “If we are to truly recover from this pandemic, then local authorities must receive a fair settlement.”

First Minister Nicola Sturgeon said local councils were “doing a great job just now” and were an “integral part” of the response to Covid-19.

With the Scottish Budget for 2021-22 due to be unveiled on January 28, Ms Sturgeon said it was “usual at this time for councils and Cosla to be making financial bids and demands on government”.

She added: “These decisions will be taken in the context of the Budget, that will include any decisions around caps on council tax.”

Ms Sturgeon also said the Scottish Government had given councils “quite significant additional funding” over the course of the pandemic.

The First Minister said her government would “continue to have discussions with councils about how collectively we best manage the pandemic as we are in it, and also as we start to recover from it as well”.

A Scottish Government spokeswoman said: “Our partners in local government are helping to support businesses and communities through this crisis and the Scottish Government will continue to support them in that role.

“Working in partnership with Cosla, we have provided a package of support for local services worth up to £750 million, giving them the powers they need to make informed decisions about spending.

“Taken together with the additional £382.2 million of funding that has already been committed, this brings the value of the overall Covid-19 support package for councils to more than £1 billion.”

She added: “Decisions on local government budget allocations for future years are subject to the outcome of the on-going negotiations with Cosla, the results of which will be confirmed in the Scottish Budget on January 28.”