Local Government Finance Settlement 2009-10

Part of the debate – in the Scottish Parliament at 3:25 pm on 11 December 2008.

Alert me about debates like this

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat 3:25, 11 December 2008

This afternoon, the Cabinet Secretary for Finance and Sustainable Growth made three essential arguments: first, that the levels in this settlement are better than the indicative levels that he set out in last year's local government finance settlement; secondly, that the relationship with local government is all sweetness and light; and thirdly, that the current economic climate requires a proportionate response. I want to examine all three arguments.

I was interested to compare today's published settlement with tables that the cabinet secretary published last year, particularly with regard to capital allocations. Last year, the indicative level for capital allocations in 2009-10 was £992,580,000; today, that figure is £945,000,000, a difference of £48 million. We hear week in, week out that the provision of capital expenditure to local government is being accelerated, but no credible argument has been advanced as to why there has been a net reduction in that figure. We have also learned not only that £20 million of capital consent is being withdrawn from local government to fund affordable housing but that more than £5 million of that funding has been spent on buying land that is not for immediate housing construction and £1.4 million has been used to buy unsold private housing stock. Spending money in that way neither boosts construction jobs nor affords local authorities the ability to develop capital expenditure.

That has been compounded by Sir Angus Grossart's comment to COSLA that the Scottish Futures Trust had no funding and would simply be a lobbying arm for local government to persuade central Government to provide funding. Given that and the cabinet secretary's removal of level-playing-field support for new builds, councils are rightly desperate for a clear and sensible capital investment funding stream in Scotland. We simply cannot wait for that.

Investment in schools is a good example. We know that, since the Government took office, not one new school project has gone to the first stage of gateway approval. Armed with hard hats and brass necks, SNP ministers are falling over themselves to open new schools that were commissioned, designed, funded and built under the previous Administration. Meanwhile, however, local authorities are still waiting to hear from the Scottish Government about their demands for level-playing-field support.

We have still received no clarity from the Government about whether the capital that will be swapped for revenue to fund education policies will counteract the £40 million of accelerated capital expenditure that was announced last year to build classrooms to meet the Government's promise on class sizes. Last year, £40 million was given to councils; this year, £20 million has been taken from them for the same purpose. No wonder they are confused by the messages that they have been given.

The cabinet secretary tells us that this is all part of the new relationship with local government. As we are told very regularly, it is an equal partnership; it is based on equity. However, it is a marriage without a joint bank account. If a party is wholly dependent on another party for funding, it is not an equal partner.

The relationship with local government has brought into being the single outcome agreements. Last year, John Swinney was interviewed by the Scottish Law Reporter. Thank goodness for Google that we are able to see such material, because I have to confess that I am not a regular reader of the journal.