Local Government Funding

Part of Opposition Day – in the House of Commons at 4:00 pm on 28th March 2018.

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Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy) 4:00 pm, 28th March 2018

I join the shadow Secretary of State and the Secretary of State in paying tribute to councillors across the nations of the UK for the work that they do. It is an undervalued job. Those who do it correctly often spend long hours serving their constituents diligently, and often at odd hours of the day and night. It is important for us all to reflect on that. As a former councillor and council leader, I am well aware of the pressures on individual councillors and on budgets.

The shadow Secretary of State quite rightly pointed the finger of blame for the problems of local government at the austerity that has been imposed on local government by this Tory Government. I absolutely agree with him. I was encouraged that he focused on that aspect when replying to Hugh Gaffney, because I also want to talk about the situation in Scotland.

The UK Government Budget did not present a good deal for Scotland, as a consequence of real-term cuts to Scotland’s revenue block grant for day-to-day spending of over £200 million next year. Despite a commitment of over £300 million of resource funding for the NHS in England this year, Scotland will only receive £8 million in consequentials in 2018-19 due to UK Government cuts elsewhere. Of the additional money that the UK Government announced as being added to Scotland’s budget, over half—£1.1 billion—comes from financial transactions that the Scottish Government cannot spend on frontline public services and that have to be repaid to the Treasury.

Austerity has not ended. Over the eight years of this UK Government—between 2010-11 and 2017-18—and onwards to 2019-20, we will see Scotland’s discretionary budget fall in real terms by £2.6 billion. That is 8.1%. Scotland continues to be hit by UK austerity and the decision to leave the EU. The Scottish Government have actually protected local government budgets and vital public services in the face of this austerity onslaught. Compare what the Scottish Government have done with the 49% real-terms cuts to English local authority budgets.

In Scotland, total resource funding for local government has increased by a total £170 million in this year’s budget, providing local authorities with an above inflation increase, before taking into account the ability to increase the council tax. Some £35 million will be transferred to local authorities this year using agreed distribution mechanisms. The remaining £135 million will be in the Local Government Finance (Scotland) Order 2018. This figure includes a specific resource grant of £10.5 million agreed with Orkney, which will receive £5.5 million, and Shetland, which will receive £5 million, to address funding for inter-island ferries.

While the Tories in Scotland propose cutting over £556 million from public services to pay for their tax cuts for the wealthiest, the SNP Government deliver for councils and protect the vital local services in the areas that we all hold dear, especially in my own constituency in the highlands. The SNP’s progressive reforms on income tax—with 70% of people paying less than they did last year and 55% paying less than they would if they lived south of the border—are vital for allowing this funding increase, despite the continued austerity that is being imposed.