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Today’s motion seeks agreement to the main allocation of revenue funding to local government for 2012-13 to ensure that our councils continue to deliver the vital services on which communities across Scotland depend. In 2012-13, the Scottish Government will provide councils with a total funding package of £11.5 billion, which includes total revenue funding of £10.9 billion and support for capital expenditure of almost £0.6 million—billion, I should say. The motion seeks Parliament’s approval for the distribution and payment of £9.9 billion out of the £10.9 billion total. The remainder will be paid out as specific grant funding—mainly for police funding—or will be distributed at a later date.
I will bring a second order before Parliament next month to distribute a further £70 million to compensate the councils that have frozen their council tax in 2012-13 for a fifth consecutive year. Following agreement with the Convention of Scottish Local Authorities, the total in that further order will be subject to council leaders providing formal assurance by the end of this month that their budgets for 2012-13 include provision to deliver the full package of measures that are outlined in finance circular 11/2011, including the council tax freeze.
The Government has reached an agreement with the leadership of the Convention of Scottish Local Authorities on an approach to delivering joint priorities between national and local Government. That was described in my letter to COSLA of 21 September, which set out the terms of the local government settlement for 2012 to 2015.
The purpose of the approach to joint priorities has been to entrench the approach that the Government took in its first parliamentary term through the establishment of the concordat between national and local Government, which essentially established a framework of partnership working in which national and local Government would work together to deliver shared objectives and outcomes. That spreads across a range of policy interventions and approaches, but it can also include specific policy commitments. I will describe a number of those in due course.
At the heart of the thinking behind the concordat, which has developed into the joint priorities approach that the Government has progressed with local authorities, is the desire to create a common focus in the work that we undertake and the objectives that we try to secure as public authorities working together in the common interest of Scotland.
I am pleased that COSLA has confirmed that local authority leaders from all 32 councils have signalled their provisional acceptance of the package of proposals that was presented by the Government and agreed with the COSLA leadership in December, and that there has been support for that from all 32 local authorities.
As part of the settlement, local authorities will deliver certain specific commitments. Those include freezing the council tax, which is continuing to help families during very difficult economic times; passing on funding to police boards as a contribution to allow them to maintain the number of police officers on our streets; maintaining teacher numbers in line with pupil numbers and securing places for all probationers under the teacher induction scheme; and meeting the needs of our most vulnerable and elderly citizens by working with the national health service to improve adult social care. Those are some of the specific policy instruments to which I referred earlier, and they offer clear evidence that the Government and local authorities are working together in the interests of our communities.
Local government will have a key role to play in taking forward the preventative spending approach, which is a major feature of the 2011 spending review that I announced in September. Local government strongly supports that approach, and it has committed to contribute resources to the change funds, which—together with contributions from national Government and community planning partners—are expected to deliver approximately £500 million to invest in early years, older people’s services and reducing reoffending.
I should explain that the total revenue funding to be paid out to local authorities in 2012-13 includes the £502.8 million of ring-fenced grants, which is mainly the police grant; £281.9 million for police and fire pensions, which is paid to police and fire boards; £33 million for additional police officers; £86.5 million paid to criminal justice authorities; £70 million for the council tax freeze; and £37.6 million for the teacher induction scheme. The overall package further includes—although it is not part of the order before us—support for capital funding of more than £563 million.
I made a number of announcements relating to the allocation of additional resources subsequent to setting the budget in September. Those moneys will be used to further support economic recovery, and approximately £34 million will be allocated in the current financial year to spending associated with local government programmes to support our priorities. As part of those measures, local authorities will benefit directly from the cities investment fund, which the six cities in Scotland have been involved in formulating alongside the Government.
The Minister for Youth Employment, Angela Constance, will engage in further dialogue with local government on the impact that the additional £30 million that we allocated for youth employment measures will have on local authority budgets and provisions. Given the scale of the challenge of addressing youth unemployment in certain parts of Scotland, I have made it clear in my discussions with local authorities—a number of which are investing in youth employability schemes in their areas, some of which I will refer to later in my remarks if I have time—that, whatever decisions they take on youth employment measures, that will not prejudice in any way further decisions that the Government must take on youth employment resources that it could allocate to them.
On 31 January, I announced details of changes for 2011-12 that will have an effect on a range of programmes that affect local authorities. They include £10 million for affordable housing supply; £2 million for housing adaptations for older and disabled people; £4.5 million for roads maintenance and other works, which will include £2 million to help local authorities to maintain local roads; and £2.5 million for potential claims under the Bellwin scheme from local authorities arising from the recent storm damage from before and after the Christmas break.
Furthermore, as part of my opening speech on the Budget (Scotland) Bill yesterday, I was able to announce the allocation of £382 million in additional funding for 2012 to 2015. Within that total figure, I have been able to provide local government with its pro rata share of 28 per cent, which amounts to £94 million over the three years 2012 to 2015. We have agreed with our local government partners that that money will be used in infrastructure investment to support the economic recovery and that a proportion of that—£40 million—will be targeted specifically at supporting our digital action plan, particularly in rural areas. It will be for local authorities to decide how the balance of the additional funding can best be spent to support economic recovery in their localities.
In addition, local authorities will benefit from the announcement that we are investing another £45 million in the housing budget over the 2012 to 2015 period to supplement the £10 million that we have added for affordable housing in 2011-12. On top of that, the £42 million of funding that will be used for loans and shared-equity arrangements will supplement the housing provision and, in essence, free up resources to be used in wider social housing projects involving our local authorities.
The order contains a number of additional sums that relate to 2011-12. We seek approval to distribute an additional £62.3 million to allow councils to carry through a number of agreed spending commitments that have arisen since the Local Government Finance (Scotland) Order 2011 was approved last year. Those commitments include £37.5 million for the teachers induction scheme, £15.3 million for teachers pay and £7 million to help to support the cities strategy. Those resources are provided to help local authorities to address the many challenges that they face now and in the future so that they can continue to provide the vital services that our communities need and on which they rely.
In developing all those financial arrangements with local government, we must, of course, use a sustainable and agreed distribution arrangement for the resources. The distribution formula for the disbursement of the local government settlement to each individual authority was reviewed in 2009 and the conclusions of that review were agreed with local government in Scotland.
The principal drivers of the local government distribution formula are a mixture of factors, the most significant of which is the population distribution around the country. There are, however, other major factors that influence the distribution formula, including the age distribution of the population—particular account is taken of the number of younger and older people in each local authority area—the rural character of some local authority areas, the impact of deprivation factors and, for a number of authorities, the special islands needs allowance that is applied to all authorities that have island population groupings within their areas. The distribution formula drives the way in which those resources are allocated to all local authority areas.
Yesterday, I confirmed our approach on business rates. We will match the English poundage and the large company supplement. I set out revised proposals on the public health supplement, and the regulations are published today. On the general business rates issue, I appreciate that the inflation increase for 2012-13 is significant. That is why I have put in place the deferral scheme that I announced in December, which will provide flexibility to businesses by allowing them to spread the retail prices index-linked inflationary increase for 2012-13 over three years. More details on that scheme have been published today.
Also in December, I announced that we would maintain the small business bonus scheme for the lifetime of the current parliamentary session and that the thresholds for 2012-13 would be maintained at 2010-11 levels. The small business bonus scheme benefits two in every five commercial premises in Scotland and will continue to support small and medium-sized businesses across the country. The small business bonus scheme is just part of a relief package that is worth more than £500 million a year, which benefits many sectors including around 63 per cent of Scottish retail premises that currently pay zero or reduced business rates.
In summary, the total funding from the Scottish Government to local government next year will amount to £11.5 billion. The share of the budget that is allocated to local government is higher in 2012-13 than it was when this Administration came to office, despite the unprecedented pressure that the budget has been under. The Government works actively with local government to agree shared priorities, and I welcome very much the approach that local government is taking to working with the Government in our efforts to deliver economic recovery. That is evidenced by the steps that are being taken to support recovery through both capital programmes and employability programmes in the localities of Scotland. I welcome that constructive approach from local government in Scotland.
That the Parliament agrees that the Local Government Finance (Scotland) Order 2012 [draft] be approved.
This year’s local government budgets are shaping up to be bad news for thousands of families throughout Scotland. In its budget, the SNP has allocated council cuts that are twice the level of the cuts that the Scottish Government has received from the United Kingdom Tory Government. That will mean a squeeze on local services, job losses and increased charges for services, which will impact particularly hard on people on low or modest incomes. As councils throughout Scotland set their budgets and as local people look at the small print and hold them to account for their priorities, we should let them know that the squeeze on local government services was made in Scotland by the SNP. The SNP Government took a cut from the UK Tory Government, doubled it and then passed it on to councils.
No, thank you. Let me get started.
That is on top of last year’s difficult settlement for councils, to which the cabinet secretary has referred. Last year, 13,500 jobs were lost from local government, and Unison tells me that another 13,500 will be lost this year. This is not just a technical debate, although I thank the staff of the Scottish Parliament information centre for their assistance in processing the raft of statistics that we have received from the cabinet secretary, particularly as they have been unveiled over the past few days.
This year’s SNP budget will affect councils’ capacity to use the spending power of local government to create local jobs and training opportunities—something else to which the cabinet secretary has referred. The additional money that was announced yesterday is obviously welcome, but when one looks at the detail, one sees that it is much more a triumph of expectation management than a boost to local services.
The SNP makes great play of its council tax freeze, but there is a con at the heart of that approach because the council tax freeze is not being fully funded by the Scottish Government and it will add massive pressures on top of last year’s cuts by the SNP.
Our view is that the budget settlement is a bad deal. The SNP promised to protect people from Tory cuts.
The member talks about alleged SNP cuts. How much more money would Labour put into local government and from where would it find the money in the Scottish block?
We are discussing the order, and I am afraid that we can only discuss what is on the table. We are criticising the settlement, because that is the issue that we are debating. Ken Macintosh addressed the member’s point in the debate yesterday.
The deal is a bad one for local government and local communities—there is no getting away from that. We are now three months away from the local government elections, during which people will be able to raise the issues in detail.
To follow up on my colleague Mr Gibson’s point, yesterday, the Labour Party gave us not a single idea about where additional resources would come from—apart from the idea of using the £10 million for the referendum campaign—and it opposed my revenue-raising measures. Perhaps Sarah Boyack will take the opportunity to answer fully the point that Mr Gibson raised and which I reiterated. If there is to be criticism of the size of the local government settlement—as there is in the Labour Party amendment—she should say what additional resources Labour would put in and where the money would come from.
To give just one example, the SNP and Labour groups on the council in my area have asked for flexibility and the opportunity to consider a bed tax to take the pressure off. I understand that the council will have a current debt of more than £1.5 billion, even with the additional money as a result of the 85 per cent floor. There are ideas in local communities, and the cabinet secretary would do well to listen to them. Pleas are being made locally, but they are not being listened to.
The approach is one of expectation management: make massive cuts, see which are the most popular and then put a little back into the pot. However, the local government settlement is bad news for people, whether they are the parents of children who are unhappy with class sizes and the loss of 3,000 teachers under the SNP’s watch; carers who are seeing the quality of their services undermined daily or rationed; or people who desperately want a decent home and who have been let down by the SNP’s failure to live up to its election promise on social rented housing. The cuts to the bus service operators grant will also hit local communities. Local councils are struggling to decide whether to lose local bus services or to use some of their hard-pressed budgets to fill the gaps, as the City of Edinburgh Council is considering doing.
People in every part of Scotland will be let down by the settlement. The provision of services locally, collectively provided, is why we have local government. The capacity to improve communities and make them good places to live is what drives people to stand for election as councillors. In the four years of the previous SNP Government and in the six months or so of the majority SNP Government, the capacity of local councils to set their priorities has been diminished. There is no way to get away from that. Local councils are tied into a financial straitjacket, with all the blame being passed down to them for every local cut that they make. Labour councillors across the country, whether they are in power or in opposition, have argued for protecting vital local services on which people depend and using the power of local government to help to bring the country out of recession through the power of local spending to help economic development.
The debate is needed as a reality check—it is our chance to hold the SNP Government to account for its approach to local government and for letting down people throughout Scotland by doubling the cut from the Tory Government. There is a human cost to this year’s local government financial settlement. Backroom civilian police staff will be sacked to meet the SNP’s promise on front-line police numbers. That will result in front-line police being dragged back to the bureaucratic details that the backroom staff were there to let them away from.
On education, class sizes are nowhere near the 18 that the SNP offered in 2007 and they are still not at the 25 that the SNP promised. Supply teachers are being put off because of cuts to their terms and conditions and new teachers are still finding it hard to get their first job. The school building programme, even with the changes that were announced yesterday, is being slowed and delayed across Scotland. For parents, childcare is becoming increasingly expensive, and working parents are under particular pressure because of the lack of affordable nursery provision. Our priorities must be to support people through the recession, to make the best use of local services and procurement and to stimulate local economic development.
That is why, in Falkirk, Glasgow and now North Lanarkshire, the focus is on training. Furthermore, we have to give a chance to people who are furthest from the labour market, which is why we argue for the use of article 19 of the European Union public procurement directive to let local government help factories that offer supported employment. That would give people a chance to find work. Last year, the SNP-Lib Dem council in Edinburgh allowed Blindcraft to go to the wall. That should be contrasted with the fantastic work done by Glasgow City Council to support disabled people.
The cabinet secretary’s speech referred briefly to preventative spending. However, pernicious cuts in social care are taking place at local level across Scotland. Following today’s finance order, and following the budget settlement that the SNP has chosen to offer local authorities, the cuts will be all the more challenging. A key way in which local government can help is by taking the pressure off carers and by ensuring that social care is available. However, across councils, social care is being rationed. There is also a huge squeeze on the voluntary sector. The voluntary sector brings experience to the table—experience of people who are discriminated against and are vulnerable. It also brings volunteering hours that local government gets for free through trading arrangements. The budget settlement will make it infinitely harder for local government to work with the voluntary sector. It is a bad deal.
The cabinet secretary mentioned social rented housing, money for which is incredibly cost effective, not just in helping to tackle our housing shortage but in kick-starting the construction industry. The SNP Government promised 6,000 new affordable rented homes a year, but, after yesterday’s budget, there was a 30 per cent cut in affordable housing. That is not helping communities such as those in Midlothian with a focus on new council house building.
We deeply regret the SNP Government’s choice to pass on twice the level of cuts, in real terms, that it received from the Tory Government. I hope that the rest of the chamber will agree with us that today’s local government finance order could have been better and should have been better. It will hold back local investment; it will limit the capacity of local government to do everything it can to help people and businesses to come out of recession; and it will result in cuts at local level, with the underfunded council tax freeze adding to the pressures on services. The order will affect local government’s capacity to address what motivates people to stand as councillors in the first place. I encourage colleagues to support the amendment in my name.
I move amendment S4M-01979.1, to insert at end:
“but, in so doing, regrets that the Scottish Government’s real-terms budget cut to local authorities is more than twice the cut to the overall Scottish budget.”
The motion seeks approval for the Local Government Finance (Scotland) Order 2012, so I will begin by confirming that Scottish Conservatives support the council tax freeze for the forthcoming financial year, and warmly welcome the fact that the small business bonus scheme—which the cabinet secretary will recall was originally a Conservative initiative—is to continue. The scheme has provided not merely tangible support but, in some cases, a lifeline for many small to medium-sized local businesses. It is an excellent example of preventative spend in action.
However, Scottish Conservatives have a number of concerns about the Scottish Government’s funding proposals. The first concern relates to the collection rate targets outlined in the business rates incentivisation scheme. In the present financial climate, we consider those targets to be too optimistic. There is little likelihood that many local authorities will achieve the targets, thereby benefiting from additional funding by retaining 50 per cent—the Scottish Government pockets the rest—of the target surplus raised. It is a great pity that the opportunity has been lost to introduce a scheme like the one that was suggested by Scottish Conservatives in 2009, whereby local authorities could keep 100 per cent of the surplus. Together with revised collection targets, that would offer a real incentive to local authorities. It would also help to create jobs and boost the economy.
The Scottish Government has not provided any funding for town centre regeneration. Instead, it is reviewing the scheme. Figures that were released this week by the Local Data Company revealed that five towns—East Kilbride, Hamilton, Coatbridge, Grangemouth and Falkirk, all of which are in Central Scotland—are in the top 10 list of the towns with most vacant shops. In some areas of Scotland, one in four shops is vacant. It is therefore especially regrettable that there is no funding for town centres.
Furthermore, despite the cabinet secretary’s adjustment to the public health levy, it remains a regressive, Scotland-only tax that will now penalise large retailers to the tune of £95 million as opposed to £110 million.
I am interested in the fact that the member thinks that we should not target the larger stores. They seem to be doing very well compared with some of the smaller shops to which she has referred, which have had to close down. Is there not an inconsistency in the member’s approach?
Absolutely not. Let me explain why. I will speak about the impact. Jane Bevis, who is director of communications for the Scottish Retail Consortium, has said:
“The Scottish government has a hole in its local authority budget and has chosen the retail sector to fill it, simply because supermarkets are profitable businesses. The public health justification for this levy is completely unfounded.”
Given that the retail sector is the country’s largest private employer—it employs approximately 240,000 people—the adverse consequences of that discrimination are potentially far reaching, and they put in jeopardy the 59 per cent of part-time jobs in Scotland in the retail sector that are flexible and attract young people and women in particular. In fact, 62 per cent of the Scottish retail workforce is female, and those jobs often represent second incomes that bolster household incomes and are a source of additional spending power that benefits other local business and the local economy. That fully answers John Mason’s point.
A third of retail employees are under 25. Many young people get their first employment opportunity in the retail sector. Given that more than 100,000 16 to 24-year-olds are unemployed in Scotland, the discriminatory tax that I am discussing runs the risk of adding to the depressing figures by denying young people the opportunity to gain their first foothold on the employment ladder. Perhaps it is not surprising that the sport, tourism, hospitality, food and drink, and transport industries are all mentioned as possible sources of employment for young people in the Scottish Government’s “Scotland’s Youth Employment Strategy”, but mention of the retail sector is notable by its absence.
I turn to the direct funding provision for criminal justice social work. In cash terms, the funding remains the same over the next three years but, in real terms, that represents a cut in excess of £6 million. This is a vital allocation that provides core funding to ensure that adequate resources for criminal justice social work and workers are in place to enable them to deliver pre-sentence reports to courts; provide community sentences and supervise probation orders; carry out the post-release supervision of offenders on statutory licence and voluntary throughcare; and generally assess the risks and circumstances of offenders in the community. In other words, this budget investment represents a clear and compelling example of preventative spend. It is therefore a concern that, despite the Government’s much-vaunted commitment to spend to save, the area appears to have lost out. I look forward to the minister’s comments on why he considers that to be justified.
In general terms, I accept the figures in the order, but there is no doubt that an opportunity has been lost, in light of the examples that have been highlighted, to maximise preventative spend and boost the local economy.
I thank the cabinet secretary for confirming once again the importance of local government to him and the rest of the Scottish Government. That is shown by the £38 million extra in funding that they have found.
As a previous leader of the opposition in Glasgow City Council and a sitting councillor, I consider local government to be critically important to our society’s wellbeing. That will hardly come as a surprise to members. We charge local government with responsibility for extremely important services, from the schooling of our children and grandchildren to the social care of our families and loved ones. We ask it to look after our roads and to regenerate areas that need a wee bit extra work to make them shine again. Its importance in the running of our communities cannot be overstated.
Local government is the best-placed level of government to determine changes at a local level and it is strongest when it works in partnership with the national Government. Given its responsibilities, it is, of course, imperative that it is funded appropriately. It is clear from the cabinet secretary’s statement that the Scottish Government also holds that view. Even working under the draconian cuts that have been imposed by successive Westminster Governments, which have seen the Scottish budget reduced year on year since 2007, the Scottish Government continues to ensure that local government settlements are fair, affordable and at a level that is, despite the aforementioned Westminster cuts, higher than it was in 2007-08 when the SNP took power.
In the coming year, Glasgow will receive per capita funding to the tune of £2,786, which is the highest of any wholly mainland local authority and £500 more than the Scottish average, although we would not believe that if we listened to the constant publicity-seeking, politically motivated greeting of the leader of Glasgow City Council. I am not the only one who thinks that Mr Matheson has got it wrong. The Edinburgh Labour Party agrees with me, as does the Edinburgh Evening News, which criticised Mr Matheson for having a go at Edinburgh when Glasgow is receiving, as Edinburgh Labour put it, £2,617 per head while Edinburgh gets £1,821. If a party is going to attack us, maybe it should speak to its colleagues before it decides to play party politics with the funding of local government.
Glasgow has done well out of the small business bonus scheme, and I am delighted that Mr Swinney has reiterated that today. It will do well out of the £30 million youth employability money, which I am sure it will get more than its fair share of. The long-term commitment to the council tax freeze has saved families hundreds of pounds in these difficult economic times. Many projects are funded in Glasgow by the Scottish Government, such as the south Glasgow hospitals, the Clyde fastlink, the City of Glasgow College, the Edinburgh to Glasgow rail improvement programme, and the recently completed M74, and tens, if not hundreds, of millions of pounds have been invested across the city in preparation for the Commonwealth games in 2014.
I am proud to be from Glasgow, which houses magnificent public buildings, including stunning art galleries and museums, and the largest number of public parks of any city in Europe. Hampden Park, in my constituency, is the home of Scottish football. Glasgow has so much to be proud of, but its local government leaves a lot to be desired. Glasgow City Council receives the highest per capita funding settlement from the Scottish Government of any wholly mainland authority, but people who live in some areas of the city have the lowest life expectancy and highest infant mortality rates in western Europe. Those problems are connected to the high levels of heart disease and alcohol-related illness, which are associated with poverty. That is why I welcome the public health levy. Despite the Tories’ claims, it can only be a good thing.
For all the investment in schools by successive Scottish Governments, some schools in Glasgow’s more deprived areas still have the lowest educational attainment rates in the country and despite, or perhaps because of, the fact that Glasgow City Council was the biggest landlord of social rented housing in western Europe until 10 years ago, far too many houses in Glasgow are still in a chronically poor condition that adversely affects the health of thousands of residents of the city.
It is clear that money alone cannot solve every problem. The Scottish Government has to play its part in providing fair resources and funding for Glasgow, and it has done so.
Mr Dornan is talking about fair allocations to councils. How does he feel about the fact that 89 per cent of the cuts in the budget settlement have been allocated to local government, which means that local councils will be penalised as they try to provide the vital local services that he has outlined in his speech?
We are facing the most difficult economic time that we have had since devolution, so local government has a responsibility to spend the money that it is given wisely and carefully.
We expect local politicians who are responsible for administering the services to be more committed to spending tens of thousands of pounds on filling potholes than to paying for medals for bailies and portraits of the lord provost. We also expect them to protect the most vulnerable in our society instead of financing huge payoffs for council officers and chief executives of arm’s-length external organisations within the so-called larger council family. Sometimes the word “family” is very appropriate.
We also expect our local and national Government to use methods of financing public projects such as schools and hospitals in a way that will not penalise our children and grandchildren for our incompetence. Shamefully, Glasgow pays in excess of £50 million per annum in repayments for the scandalous private finance initiative and public-private partnership projects that originated from the dead hand of Prudence Brown. That money could be spent on keeping additional support for learning schools open, fixing our roads and assisting those who are most in need.
Thankfully, the people of Glasgow will have the chance in May to remove the incompetent Labour administration, which continues to hold Glasgow back, and to put in place an SNP administration that is full of innovative ideas about how to use Glasgow’s funding wisely to benefit Glasgow’s citizens in an open and transparent way, in contrast to the opaque, secretive and obstructive way in which Glasgow is run at present. I look forward to the day—it is coming soon—when Glasgow is run by an administration that would rather work with the Government of the day for the benefit of Glasgow’s citizens than cry wolf at every opportunity to make cheap political points.
I thank Mr Dornan for his somewhat humorous speech. I am tempted to say that I would like to take it and do the reverse of it.
I welcome the opportunity to speak in the debate. Like Sarah Boyack, I aim to highlight the disproportionate budget cuts that local authorities are receiving from the Scottish Government relative to the cuts that the Scottish Government is receiving from Westminster. Even with yesterday’s welcome sweetener, the Scottish Government appears to be hammering local authorities and their approach to delivering public services. Glasgow’s cash-terms cuts mean that our city will be millions of pounds worse off.
Given her concern about Glasgow’s funding, is the member dismayed that, when Labour was in power, it cut Glasgow’s aggregate external finance from 15.6 to 14.4 per cent of the Scottish total? That cost Glasgow in excess of £130 million in revenue support a year.
I will continue.
Glasgow City Council will be the third worst-off local authority under the spending plans, although Glasgow is the largest city in Scotland, and it will be the only local authority to have its budget cut five years in a row. Glasgow is again being penalised by the Edinburgh-based SNP Government.
Protecting Glaswegians’ priorities will be a greater task this year as we struggle to balance the decreasing budget with the needs, issues and aspirations of our communities, which we strive to serve. The impact will hit the most vulnerable in our communities—those who depend on local government services—and will ultimately result in more people losing their jobs. That is the reality of bleeding Scotland’s local authorities.
The SNP will continue to assert its council tax freeze for hard-pressed households, but the reality for Glasgow City Council is that the past two years have evidenced an increase in the number of council tax exemptions, which has led to a shortfall in council tax income that is received against the council’s budget.
The casualty list from the bleeding of the local authorities includes the wider community and voluntary organisations that have benefited from local grant awards to enhance service delivery for and by communities. The rising pressure on local partnerships to increase service delivery with a decreasing budget is only too apparent in the single outcome agreement commitments. A cut of £16 million over the next three years will increase the difficulty of delivering high-quality locally accessible public services.
All that comes after the SNP tried to cut Glasgow’s housing budget by £122 million. The council forced the SNP to delay that cut for one year, but we know that it will be back with it.
Is the member not aware that the budget that the Labour Party failed to support yesterday assures the financial package for housing and includes a new injection of funding for housing across Scotland?
It still equates to a 30 per cent cut.
I know that the Labour administration in the city chambers, which is led by Gordon Matheson, will continue to struggle on the city’s behalf against the bias that I have described, in order to protect our communities from the worst of the cuts. Putting the city first is Glasgow’s priority. This SNP Government is very good at passing the buck and blaming others for the impact of its cuts.
I am just coming to my last sentence.
Here again we have the same old rhetoric: the SNP administers on local authorities real pain, and brandishes Westminster with all the blame.
I declare an interest as a member of Renfrewshire Council, mainly because we work in partnership with the Scottish Government to deliver despite the challenges that we face. I sometimes wonder whether I live on the same planet, let alone in the same country, as some Labour members, because they do not seem to get the idea of local authorities working together in partnership. Sarah Boyack said that the local government settlement is bad news for thousands of families throughout Scotland. I am tired of hearing such gloom and doom. I believe that there is no such thing as a problem; there are only solutions. It may be because my mother introduced me to John Lennon at an early age that I believe that it is possible to find a solution to every problem.
The position that we are in is the result of the squeeze from the Westminster Government. If we had the full economic powers of independence, we could make a difference. I know that the Labour Party has great difficulty with that, but it is quite a simple solution. Kenneth Gibson and the cabinet secretary asked Sarah Boyack what Labour had to offer the people of Scotland in the next couple of years during these difficult times. Yesterday, one Labour member said that the £10 million that is to be spent on the referendum should be redistributed throughout the country in a way that only the Lord himself could do. Today, we have been told that Labour’s other big idea is a bed tax. Is that it? Is that all that we are to get from Labour? During these difficult times, does Labour have anything else to offer? Labour members can intervene if they want. The people of Scotland are looking for ideas, leadership and a way forward, but Labour has nothing. I can tell from the silence among Labour members that they have nothing to offer.
Local government, like national Government, is about responsibility and leadership. In these challenging times, we must live in the here and now and deal with the current challenges. The cabinet secretary has supported and helped local authorities. It is up to members such as me and other councillors throughout the country to take on the responsibility of providing for people in our areas.
I listened to what my colleague James Dornan said about Glasgow City Council. Renfrewshire Council is looking for solutions for the people of Renfrewshire, whereas, 7 miles away in Glasgow, Labour Party members blame everyone else and want to stay in their city chambers like dinosaurs, locking themselves away from the real world and the issues at hand.
The leader of the Glasgow City Council administration, Gordon Matheson, has already been mentioned. Leadership is about being responsible and showing the way forward; it is also about being able to work with people. In the Evening Times of 20 September last year, Gordon Matheson said:
“not only is your council tax bailing out the Edinburgh trams”— which I believe the Labour Party wanted—
“your city is being asked to run up debt interest payments of around £2.1 million so that Mr Swinney can build a bridge on the other side of the country”.
That is Labour’s idea. Labour in Glasgow is concerned about one wee pokey part of the country instead of the whole of the country. Glasgow is a major city and it is a major part of Scotland, but the Labour administration in Glasgow has to look at the bigger picture.
I have in my hand a copy of the Labour Party publication The Edinburgh Voice, which castigates Glasgow for the amount of money that it gets and says that Edinburgh deserves more. Is Labour playing divide and rule across the country?
I agree—that is the case. It is a Labour tactic that has been used since the old days of the regional councils, when it was in charge of the regional councils and the district councils. Those bodies used to blame each other for everything that went on; it was never their fault. Luckily, the people of Scotland have seen through the sham of the way in which Labour carried on.
I would like to look at some of the positives and the responsible things that we have done in Renfrewshire—we are in an election year, after all. I am always one for positive Paisley and Renfrewshire. Some £140 million has been spent on the Scottish quality housing standard—warm homes, kitchens and bathrooms in Renfrewshire. Labour in Renfrewshire offered nothing. In fact, it threatened that either the housing stock would have to be privatised or the rents would have to be put up by 10 per cent every year in order to deliver such investment. That is one solution that the SNP administration brought in.
In Paisley, which is my area, the council is working in partnership with a private developer on the redevelopment of the Arnotts site.
We were talking about the redevelopment of Paisley town centre, but the member has decided to talk about teachers. I will take him on, though. Labour wanted to cut the number of teachers in Renfrewshire. Can I—
I am sorry, but I want to make some progress and am running out of time.
We have major retailer development in Paisley. Margaret Mitchell says that retailers are not investing, but I say to her that they are coming to Paisley. We have student accommodation in the town centre, which will bring in 300 or 400 students. We have also had major, large-scale events in Paisley throughout the year, including a lights-on ceremony that was attended by 37,500 people. That ensures that we can get footfall in the town.
We also have the small business bonus scheme, which has made a massive difference in all areas. It will continue to 2016, whereas the Westminster chancellor, playing catch-up, is offering it only to 2013.
There are many more positives. I could go on, but I will try to bring my speech to a close.
It is important for local government and national Government to work together. We have a joint responsibility to deliver services and provide opportunities for all the citizens of Scotland. All 32 local authorities must work together with the Government to do that. During my years as an elected member of Renfrewshire Council, I have seen at first hand the challenges that we face. However, my colleagues in Renfrewshire Council and I have accepted that responsibility. All members of the Parliament must accept the responsibility and look for solutions to the challenges that we face. We must not put our heads in the sand and hope that the problems go away. There has to be a positive vision for Scotland’s future. Working together with the Scottish Government, the 32 local authorities can deliver it.
I think that James Kelly needs to talk to his colleagues in local government. Thirteen days ago, I met the leader of North Ayrshire Council, David O’Neill, who castigated the Scottish Government for not allowing local authorities to get rid of more teachers so that they could free up additional money. Perhaps the Labour Party should co-ordinate itself not only from east to west but from MSP level to local authority level.
If we were to listen to Labour Party representatives today—although only four were here at the beginning of the debate, which shows the party’s interest in local government—we would think that everything is so bad in local government that everyone is turning to the Labour Party. Is that right? In that case, maybe Anne McTaggart can tell us why one of her colleagues in Glasgow defected to the SNP last week, why one of them chucked the party yesterday, accusing the Labour Party of bullying and control freakery, and why another Labour councillor joined the SNP in Clackmannanshire earlier this year. The Labour Party in Glasgow is so confident of its record that, although it had 45 councillors in 2007, it is putting up only 42 candidates in 2012. Clearly, it knows that momentum for change lies with the SNP, because we have a positive vision for Scotland at all levels.
I say to Labour members—including Anne McTaggart, who did not seem to understand the point that I made about aggregate external finance—that the figures for the distribution of funds to local authorities for the period when Labour was in charge show that the safer a Labour council area was, the less additional funding it got. Glasgow got the worst settlement and Inverclyde, North Lanarkshire, South Lanarkshire and North Ayrshire all suffered because Labour put the money into winning marginal council areas and betrayed its own supporters who had traditionally voted for it over many years.
As we know, local government’s share of the Scottish budget will be 38 per cent next year. That is a higher share than in any year when Labour was in office and compares with the share of 37.1 per cent when we came to power. Thus any difficulties that are being experienced by councils can clearly be attributed to reductions in the funding of local authorities due to Westminster cuts to our budgets which, if we listen to Ed Balls and Mr Miliband, Labour bosses in London have no intention of reversing.
The SNP has had to do its best with the money that has been available. Unless Labour members can come up with alternatives, they have a non-argument. They cannot just say, “Do you agree with this?” or, “Do you agree with that?” when they have put forward no proposals other than a bed tax, which I am sure Scotland’s tourism industry will be less than amused to hear about.
How dare Labour attack us on cuts? Not only did Labour wreck the economy but, as members may recall, Wendy Alexander, in her “hungry caterpillar” speech in the previous session, advocated that we at least match the 3 per cent year-on-year top-sliced efficiency savings that were then being imposed in England. Her colleagues, including Sarah Boyack, who was an MSP at the time, must have agreed with that, because Wendy Alexander was elected unopposed as Scottish Labour leader only a few weeks later.
“The hard facts are that Scottish Local Government is under-funded and the Executive is resorting to bully-boy scare tactics because it is losing the reasoned and evidenced argument.”
So said Labour councillor and COSLA president Pat Watters on 7 February 2006. Local government is better off under the SNP because we abolished ring-fencing and top-slicing of budgets. As my colleague George Adam said, we work with local government; we do not dictate to it. That is why all parties signed up to the concordat in the previous session. The order targets what can be achieved in the current economic climate, and the COSLA agreement, which is supported by all 32 local authorities, aids and supports councils in achieving their priorities and providing a quality service to communities.
I cannot let the Tories off after Margaret Mitchell’s remarks. It is laughable to say that the £30 million-odd retail levy is having a terrible impact on retail. Asda did not seem to take that view just over two weeks ago when it announced new stores and new jobs in Scotland. Are the Tories really saying that retail will be crippled by a levy of £30 million a year for the very biggest stores given that that is less than 0.1 per cent of their turnover; that the chief executives of the four biggest retailers earn £34 million a year; and that the Tories introduced a VAT increase that will cost Scottish retail £1 billion a year, which is more than 30 times the impact of this necessary retail levy?
Yes, that is exactly my view. I do not believe that it will have any impact and have seen no evidence to suggest otherwise. Scottish retail is healthy at that level. It is well known, for example, that the burden of rates is significantly greater on medium-sized stores than it is on the larger stores. This will help to balance retailing in Scotland, as well as providing much-needed money. Like Labour, the Tories have failed to come up with any suggestions as to where the £95 million would otherwise come from.
As we have heard, the small business bonus scheme, which Labour opposed, helps small businesses. The Federation of Small Businesses has pointed out that, without the scheme, one in eight of Scotland’s 160,000 small businesses would have gone to the wall. There would be 20,000 fewer businesses if Labour members had had their way. So much for Labour focusing on jobs and growing the Scottish economy.
Given the strictures that have been imposed on Scottish local government by the UK parties, we have done the best possible job. Scottish Government is better off under the SNP than under anyone else, and that will be proved in May when we win more councils than we have ever won before.
Scottish Liberal Democrats will support the order. Councils throughout Scotland will meet later today to set their budgets. Democratically-elected councils deliver valued services to local communities, week in and week out.
As we heard, all councils continue to face significant pressures this year. Difficult decisions will have to be made locally to balance the books. Like the budget that we debated yesterday, the local government settlement is tight. A significant cut faces local authorities, and we cannot ignore the impact of capital allocations that have been borrowed or deferred, which creates a greater cost to councils.
As in other years, councils have had to agree to a series of Government demands, on maintaining police and teacher numbers, contributing to change funds and reprofiling capital funding. If a council agrees to the demands, the council tax freeze will be funded for another year—it will not be fully funded, though; local councils stress that the funding gap is growing.
When the SNP removed ring-fenced budgets, it said that doing so would free up councils to make local decisions—many of us said that it was actually to mask cuts to budgets. Now the SNP has replaced the constraints of ring fencing with a different straitjacket. When will Mr Swinney address that? Government ministers make much of their focus on outcomes, yet they are demanding that councils protect teacher numbers and police numbers. Those are inputs; surely we should focus on results.
It is clear that councils’ autonomy is being rapidly eroded, which is quite ironic given that the SNP Government never stops demanding to be set free from UK Government restraint. The moratorium on planned school closures and the proposals for national police and fire services are further examples of creeping centralisation. Locally-elected representatives have lost the right to determine local priorities and generate additional income to fund local services if they want to do so. Present for this debate are plenty of MSPs who have council experience, who know that that is an insult to local democracy.
For years I have argued for fair and transparent funding for all local authorities. The grant-aided expenditure process must be simplified. Currently, more than 100 indicators are used, several of which are extremely flawed. About 66 per cent of expenditure is determined by only 12 indicators. The reality is that the existing grants system, which has been in place with a few modifications since the late 1970s, was designed to meet the needs of the larger regional councils. At that time, ups and downs in relation to individual criteria could be ironed out over the piece.
Ms McInnes knows as well as I do that a reason why the formula has not been changed is intransigence in COSLA. Maybe a change in COSLA will change that. Does she agree that the 85 per cent floor, which will benefit Aberdeen City Council, is a welcome move by the cabinet secretary and the Government?
I will come on to that. Mr Stewart knows that I think that it is a step in the right direction—of course it is. The review that was handed to COSLA was a missed opportunity, as I said at the time. We needed leadership from Mr Swinney on the issue. Of course the status quo prevailed: he had asked people who benefit from the current system to carry out the review. We can always go back to it and I hope that we will do so.
The indicators are not fit for purpose and must be reviewed. New criteria should target the main areas of spending need in councils. We could use indicators that are intuitively as well as statistically and logically valid.
The cabinet secretary knows that for years I have campaigned for the introduction of a floor. I have backed Aberdeen city and shire’s fair funding campaign, which called for no council to receive less than 90 per cent of the Scottish average. We heard this morning that an 85 per cent floor has been put in place. If that has happened, it is a step in the right direction. Aberdeen City Council and City of Edinburgh Council, in particular, will benefit.
However, by my calculations, which used the most recent population figures, the cabinet secretary has not quite secured an 85 per cent floor. I ask the minister to explain in his closing speech how those figures were reached. It seems to me that the cabinet secretary worked out an average after removing some of the councils that get the most. The Scottish Government, in its documentation on the settlement, said:
“For similar reasons to the introduction of the 85% minimum floor, the Scottish Government has applied a notional ceiling to the formula of 115% to exclude the outlying per capita allocations which would otherwise distort the calculation”.
That seems to be a bit of smoke and mirrors.
I advise the member that the calculation excluded the island authorities, for clear reasons to do with comparing like with like. Is she aware that her colleague the MSP for Orkney Islands requested a specific mechanism to benefit Orkney? We looked at that, and there was a zero-sum outcome. It appears that there are two different positions from the five-member Liberal Democrat group.
No. That is not the case. I accept that the island authorities are in a different position. We can examine the figures in greater detail but, as I understand it, it is not only the island authorities that have been excluded—some of the mainland authorities have also been excluded.
The truth is that 85 per cent does not go far enough. If Aberdeen City received 90 per cent of the national average, it would receive an extra £26 million; Aberdeenshire would get an extra £13 million. Aberdeen City, Aberdeenshire, Edinburgh, and Perth and Kinross continue to receive less than 90 per cent of the national average. The gap between the best-funded council and the poorest is still too great, given that they all have statutory services to deliver. I repeat my calls for a safety net for those poorest funded councils and ask the Government to continue to consider a 90 per cent average per head of population funding floor. The situation needs to be fairer. I urge the cabinet secretary to look at that.
The council tax freeze is not sustainable in the long term, and yet the longer it goes on, the harder it will be to return to local decision making on setting council tax. Will the cabinet secretary outline his long-term vision for returning decision making to locally elected representatives?
As Liberal Democrats, we know that responsive and effective services are best delivered when they are under local control. Central Government, with a central agenda, simply cannot do it. We have to do things differently. The evidence from around the world supports our view that if local people are given the power and control, they can bring innovation and new ideas into action and do more for less.
I declare an interest as a member of North Lanarkshire Council. I will retire from North Lanarkshire Council this May, so I welcome the opportunity to speak in the debate as this may be the last time that I can record my appreciation of the time that I have spent as a councillor. I will certainly miss it, as I was first elected in 1976 and have held my seat continually for the past 36 years.
When I joined the council I soon learned how much it cost to provide services. Local councils are at the cutting edge of services that are provided to constituents. Most electors do not realise what services are provided or the cost of those services. That is why I welcome the cabinet secretary’s proposals. Local government’s share of the Scottish budget will continue be higher than in 2007-08. The small business bonus scheme will continue and will offer a better deal to Scottish business. The new local government funding floor will ensure that all authorities in Scotland get their fair share of resources. I well remember Kevin Stewart continually bleating about that at COSLA.
I note that some councils will see a shift in resources. Some councils will lose and some will gain. Funding is available to continue the council tax freeze for a fifth year, which I am sure will be welcomed by many of my constituents as it will help them with their family budgets.
Yes. Mr McCabe used to describe the benefits on many occasions. I will come to Mr McCabe shortly.
The freeze will save many of my constituents more than £500. Average water charges are now 10 per cent lower than in England and Wales. Primary class sizes are now at a record low, although not all councils—particularly North Lanarkshire—have embraced the policy. We have also ended ring fencing.
During the past 36 years, I have had to deal with many Labour politicians at local and national level. I was honoured at the start of the previous SNP Government to be elected as SNP group leader in COSLA. I pay tribute to its president, Pat Watters, who I understand may retire this year.
During my time in COSLA, I was privileged to work with the cabinet secretary, John Swinney, who constantly had an open-door policy. I suggest that Mr Swinney is one of the best finance cabinet secretaries that we have had in Scotland in recent years.
I well remember when the present Labour leader of COSLA, Councillor Jim McCabe, who just happened to be the leader of my council, asked me to get him a meeting with the cabinet secretary. When I asked him what day suited him, he was astounded, as previously he had had to wait up to six weeks to meet his Labour counterpart in the Scottish Parliament. Mr Swinney gave him a meeting within two days. That shows why the Government has done so well over the past few years—it is because it cares, it listens, and it has an open-door policy.
It was interesting to be in COSLA, but if I ever needed to rattle some cages, I used to send in my Rottweiler, Derek Mackay. I congratulate the minister on his new job and wish him well. Like his friend George Adam, I will share a few stories about him in the chamber—well, only one.
When I decided to stand down as SNP group leader in COSLA, Derek phoned me and told me that he was thinking of standing, and I told him that I would support his nomination. I was proud to nominate and support him, and I am sure that George Adam seconded me on that day. Derek Mackay did an excellent job in the previous two years as SNP group leader in COSLA.
My story was not all that bad, minister.
Councils will always suggest that they need more money, just as Governments and parties do. North Lanarkshire Council, which was Labour run for more than 60 years, always says that it needs more money. The Labour leader in the council added that he would pick out from the concordat whatever he wanted and leave the rest. Let me inform members what North Lanarkshire Council’s cumulative surpluses have been over the past five years, during the council tax freeze. The figures were supplied to me by the council’s finance department.
In 2006-07, the figure was £16.271 million. In 2007-08, it was £27.016 million. In 2008-09, it was £20.194 million. In 2009-10, it was £18.743 million, and in 2010-11 it was £20.377 million. Even after we take off the financial reserve and a variety of committed resources, recurring resources were available in three of the five years.
I am running out of time, so I will move on and end by reiterating my support for something that I have always supported—increasing councillors’ pay, which has been frozen again this year. Councillors get only just over £16,000. I point out that secretaries in councils earn £17,000 to £19,000. I believe that councillors do a good job—all councillors, from every party—and they should be better paid. I suggest that the freezing, which was done for seven years under Labour, should not continue under this Administration.
I draw members’ attention to my declaration in the register of interests as a member of North Lanarkshire Council.
I welcome the opportunity to speak in the debate, but I certainly do not welcome the particularly poor budget settlement for local authorities in comparison with the overall budget settlement that the Scottish Government received. According to figures from SPICe, the Scottish Government budget for the next three years has been cut by 1.3 per cent, 2 per cent and 2.2 per cent respectively, in real terms, compared with the 2011-12 level. I recognise that that is a challenging environment for the Government to work in, but I am concerned by the figures that show that it has chosen to cut local authority budgets by a staggering 3.1 per cent, 5.6 per cent and 5.7 per cent over the next three years in comparison with the 2011-12 level.
How does the new local government minister feel about the fact that his department is being squeezed to such an extent at a time when the cut to the Scottish Government budget is less than half that level? The overall levels of cuts to departments, excluding local government, are 0.4 per cent, 0.1 per cent and 0.4 per cent over the next three years, compared with the cuts of 3.1 per cent, 5.6 per cent and 5.7 per cent to his department.
Is the member aware that the protection of health spending in the budget, which will ensure that there is real-terms growth in that area, results in the figures that he describes? Health is supposedly a priority for parties across the chamber. Is the member saying that we should not increase the health budget in real terms?
I am arguing for a fair share for local government, as are councils throughout the country. They want the share that has been passed on from the Westminster Government to be reflected in the budgets that are passed on to local government. That would be a fairer distribution for local authorities. The budget highlights just how little the SNP Government values local authorities, their staff and the services that they provide.
I want to make some progress just now.
If we look at the cumulative impact of year-on-year cuts to local government, we find that local authorities will be £1.66 billion worse off in real terms at the end of the next three years. No doubt the Scottish Government will try to blame the Westminster coalition for that reduction, but it must accept that £1 billion of those cuts are a result of this Government depriving local government and communities of much needed funds. If this Government had chosen to maintain the local government share of the overall budget at the 2011-12 level of 34.45 per cent, at the end of the spending review local councils would have had an extra £1 billion to spend on maintaining services, boosting staff levels and improving local facilities, all of which would, in turn, boost the local economy. How can the minister continue to argue that this is a good deal for his department and local authorities?
Mr Griffin has served on the Local Government and Regeneration Committee of late and I know that he is not in any sense a silly man. However, something that has become more and more apparent over the past few days is that Labour wants to spend money galore without telling us what it will actually cut. We seem to be going back to the fantasy economics of Gordon Brown. Will Mr Griffin tell us which budget he would cut to secure the moneys for local government that he is talking about?
I am not asking for preferential treatment for local government; I am simply asking that it and the communities that it serves get their fair share of the Westminster cuts.
When we drill down into the figures and analyse the impact on North Lanarkshire Council, which covers a large part of my region, we see that over the next three years local services will have to be cut to the tune of £98.3 million in real terms. Of that cut, the proportion that is a result of the coalition’s cuts to the Scottish Government budget is £37.5 million. However, the Government is making a cut of over £60 million to North Lanarkshire Council. Does the minister really expect the people of North Lanarkshire to accept from the SNP a cut to their council’s budget that is almost double the cut being made by the Tories?
Moreover, local authorities will have £220 million withheld from their capital allocations over the next two years. Although that money will be paid back—but not until years 3 and 4 of the budget settlement—local authorities that cannot cover the revenue costs of borrowing will have to postpone projects of local importance such as schools, nurseries or council houses and for the next two years the local economy will be starved of investment at a very delicate time of already high unemployment. Instead of being used to meet local priorities, this £220 million is being channelled into projects of national significance such as the Forth replacement crossing, from which my Lanarkshire constituents could have benefited from an increase in employment as a result of the steel supply contract. Now they face the double whammy of a reduction in local projects and a Forth replacement crossing made in China.
For a comparison between that approach and what a Labour administration can do, we need look no further than North Lanarkshire Council, which is investing £150 million in its council stock to build over 1,000 social rented houses. That promise to the residents of North Lanarkshire will not be watered down to 1,000 affordable houses; the council will deliver 1,000 new and much-needed council houses while maintaining one of the lowest weekly rent levels in Scotland.
North Lanarkshire Council has also unveiled a £15.8 million package to help 5,000 young people back into work over the next three years through a mix of apprenticeships and entry-level private sector jobs. Again, that shows what local authorities can do if they are bold and show the
“good leadership and clear vision” that Audit Scotland has credited North Lanarkshire with. [Interruption.] Audit Scotland said that, not me.
Local government and communities are not asking for much; they are asking only for their fair share. If this Government simply passed on the same cut that it was hit with, local authorities would be better off by over £1 billion and my area by £60 million. If we add to that constraints on local authorities with regard to maintaining police and teacher numbers and the fact that they will be unable to raise income through local taxation over the next five years, the only option is massive cuts, which will have a disproportionate effect on the families of both local authority employees who will be made redundant and those who manage to keep their jobs and end up stressed and sick because of increased workloads. Cuts will also impact on vulnerable elderly service users and children’s education.
So much more work could be done on service delivery, capital investment, employment and regeneration if only this Government valued local authorities as highly as I do. That is why I support the amendment in Sarah Boyack’s name.
There is a lot to welcome in the settlement for local government, not least the fact that the share of the Scottish Government budget stays at 37.2 per cent, which is comparable with 2007-08, 2008-09 and 2009-10. Once again, we all agree that we would like to give more to local government, but once again we have heard little from Opposition parties about where that money is to come from.
If Labour and others want to give more to local government, we must assume that they would cut another major part of the Scottish budget, which would presumably be the NHS. Mark Griffin says that if we just pass on all the cuts automatically, there would be £1 billion more for local government. That would therefore mean £1 billion less for the health service, so I assume that it is Labour policy to sack nurses and doctors and close Lightburn hospital, among other things.
One of the SNP’s key successes has involved the concordat, the end of ring fencing and better relationships with local authorities. The single outcome agreements have helped to move the focus from resources input to outcomes achieved. I remember from my time in Glasgow City Council and COSLA that there were endless complaints from councillors of all parties that there was far too much dictation from central Government and too much ring fencing. Local authorities often know what is best for their local areas.
Yes—when I was a councillor, the constant criticism from Labour towards COSLA and the then Scottish Government was amazing.
We welcome the fact that, in an age of seemingly inevitable cuts, when English councils are losing 18.6 per cent from 2011-12 to 2014-15, the figure for Scotland has been restricted to 6.2 per cent. It is worth remembering some of the achievements of the SNP Government past and present. I find when I meet with my constituents that the council tax freeze is one of the most popular achievements. Of course it is true that some of the very rich people could afford to pay a bit more, and that some of the poorest people are not paying any council tax at all, but we should remember the ordinary people who are in the middle, especially the pensioners. Those extra few pounds a week can make a huge difference to people’s lives.
Another achievement that I think we can say is shared between local and central Government is the living wage. Both the SNP Government and local councils have been pushing for that, and one hopes that it can be built into more contracts in the future. However, the fact remains that the living wage is voluntary for the private sector. We must move towards a higher statutory minimum wage, which is currently outwith this Government’s power and which both Labour and the coalition in London have failed to address.
Glasgow continues to have a good deal, and I welcome the fact that we are fifth on the list for funding per head after the island authorities, including Argyll and Bute. Some people might ask whether Glasgow is getting too much, to which my answer is clearly no.
One of my arguments in that regard is that funding should follow need, which is where I disagree with Alison McInnes, who was talking about moving to a floor of 90 per cent or some other—fairly arbitrary—level. I am happy with 85 per cent, and we should have a certain amount of fairness. However, we should remember the needs of not only Glasgow, but some of the other areas at the top of the list, such as West Dunbartonshire in sixth place, Inverclyde in seventh place and Dundee City in eighth place.
There is, for example, a much higher proportion of people abusing drugs in Glasgow in comparison with its population. Museums and art galleries are funded in different ways throughout Scotland: in Glasgow they are primarily under the council umbrella, but in Edinburgh a lot more are funded nationally. All those factors must be taken into account if we are looking at rearranging local government financing.
I do not always agree with Glasgow City Council’s decisions or with how it does things. I defend its right to make decisions, although it often makes the wrong ones. For example, the council was given plenty of money to implement smaller class sizes, but it absolutely refused to do that, to the detriment of the children in my constituency and a number of others. It lavished money on an iconic transport museum while primary schools continued to operate in an awful state.
I recently visited a primary school in my constituency that has huge gaps in the ceiling; the water is coming through, and the staff are really struggling. In Glasgow schools, smart boards, which should be pretty standard these days, are largely funded by parent councils, which means that the better-off areas have them while the poorer areas do not. Another major criticism is the fact that many council departments in Glasgow have been moved outwith democratic control.
Other points that I welcome include the suggestion that councils will be allowed more freedom on council tax for empty properties. We have a number of such properties in Glasgow, and I know that there are others elsewhere. If we could bring some of that revenue back in, that would be great.
I will touch on the public health levy. It is clear that some of the big supermarket chains are extremely profitable and some of the smaller shops have suffered, so moving the burden a little bit towards some of the highly profitable companies must be a good thing.
It has been suggested that those same large supermarkets will get a boost from minimum unit pricing, so it sounds like the levy will have a balancing effect. When I was elected last May, there were three large supermarkets in my constituency. Now, there are five, which suggests that the supermarkets, far from being worried, are doing extremely well.
In the long-term, we must consider other measures. We need to replace the council tax eventually, but we are where we are.
I welcome the settlement for local government and encourage the voters of Scotland to vote in May for the very best councillors that they can find for their wards and their councils.
This morning’s debate on the draft Local Government Finance (Scotland) Order 2012 has been interesting, although it has fluctuated at points between being a municipal hustings and a series of councillor retirement speeches.
I pick out Richard Lyle’s retirement speech. I hope that he gets another chance to speak in the chamber before he stands down as a councillor in May but, if he continues to demand more money for councillors, I suspect that Derek Mackay may try to block him.
Mr Swinney was not in the chamber when Richard Lyle described him as one of the best finance cabinet secretaries in recent years. I am sure that I picked the comment up correctly, but I would like to know who is ahead of Mr Swinney on the pile, if he is only one of the best.
I will pick up on some important points connected with the order and local government finance for next year and the coming years.
I turn first to the general resource grant. A number of times, SNP members made the point that, at 37.2 per cent, the local government share of spending will be higher in 2012-13 than it was when the SNP came to office. However, all parties—not only the Government—must focus on the direction of travel for local government in the spending review.
Yesterday, we voted on only the 2012-13 budget but, according to the spending review that was published in September last year, the cash that goes to local government for revenue, as opposed to capital, will decrease from £7.7 billion to £7.3 billion while, at the same time, the overall departmental expenditure limit resource budget will goes from £27.9 billion to £28.5 billion.
That, of course, could be subject to spring and autumn revisions but, in his closing speech, the minister ought to give us his analysis of the direction of travel for the local government budget over the next three or four years, given that its amount of cash is predicted to go down as the Scottish Government’s amount of cash increases. That suggests that the 37.2 per cent figure will inevitably drop. Will it, potentially, drop to below the level that it was at when the SNP came to office?
The Scottish Conservatives welcome the business rates incentivisation scheme. We had a similar policy a couple of years ago called the business dividend fund. However, my slight concern is that the targets have been set fairly high and there is a danger that, although the policy may look good on paper, only one or two—or, potentially, none—of the 32 local authorities will end up getting any money back through the scheme. I accept entirely that, if the bar is set too low, it will not incentivise people, but I am slightly concerned that it has been set particularly high, given the current climate. Is the Government willing to share its prediction for what each local authority will get through the scheme?
We have touched on the retail levy. I do not intend to dwell on it because, as the cabinet secretary said, the separate order relating to it has been laid before the Parliament today. Nevertheless, I return to Kenneth Gibson’s view that the levy will have no impact whatever on jobs. His justification for saying that was that Asda announced last week that it is creating some jobs, and he asserted that there is no evidence that the levy will have any impact. However, the Scottish Government has failed repeatedly to carry out a business impact assessment on the retail levy. That is not a difficult concept—it is Government policy to carry out such an assessment in relation to most orders and other legislation that it introduces. It has carried out impact assessments on many other orders that would have a much smaller impact on the economy. It is beyond belief that it has failed to carry out an impact assessment on the levy.
For just about any order that the Scottish Government makes, it produces a business and regulatory impact assessment, which determines the effect on businesses and the potential cost or gain of a particular measure in terms of jobs. When the Scottish Government announces that it has invested a couple of million pounds in a business or scheme, it is able to tell us accurately how many jobs that scheme will create. However, when it extracts £94 million it appears to be unable or unwilling to tell us how many jobs will be lost.
In closing, I request that Derek Mackay specifically address this in his winding-up speech. A number of members are worried that the assumptions about non-domestic rates collections are a little optimistic. I know that the cabinet secretary has dealt with that issue in the past, but it was a recommendation of the Local Government and Regeneration Committee—backed up entirely without division by the Finance Committee—that there ought to be regular reports on performance regarding the collection of non-domestic rates. I point out gently that Mr Mackay agreed to that when he was a member of the Finance Committee. Will he confirm to the Parliament that those regular reports will be published, and will he tell us how regularly they will be published?
It has been an interesting debate. Across the chamber, we all agree that it is crucial that we use the power of local government spending to help local communities and businesses to weather the storm. However, one of the key ways in which we could do that would be to get a better settlement for local government. The order that we are debating does not do a good job. Even with yesterday’s last-minute changes to the budget, which the cabinet secretary has mentioned—
No, I will not. I took a number of interventions in my opening speech. Let me respond to the debate, thank you.
Even with yesterday’s last-minute changes to the budget, the SNP Government is making huge cuts to housing, our colleges and the services that people rely on locally. The new money for local government is putting back some of the money that was previously cut, returning some of the capital spend money that had been delayed and reinstating some of the housing money that had been cut, but it is still nowhere near enough to deliver the 6,000 social rented houses that the SNP promised last year. I would be interested to hear from the Minister for Local Government and Planning, in his winding up speech, whether the SNP Government still stands by the promise of 6,000 social rented houses that it made in its election manifesto just a year ago, given its 30 per cent cut in the housing budget. Also, adding in money for broadband on the local government line does not save services that have already been cut in order to enable the cabinet secretary to spend the money elsewhere.
The Minister for Local Government and Planning will have to put on a brave face in handling the budget, his first order and the prelude to his own local government election campaign. He has been dealt a bad hand by John Swinney and the problem is that this is not a game of cards; it is a real debate about the future of our communities and their ability to provide local services—the whole reason for having local government.
John Mason talked about crumbling schools in Glasgow, which shows that there is a problem with capital spending. I could show John Mason a school only five minutes away from the Parliament that is equally crumbling and that has a leaky roof—that is a problem across Scotland. When local communities ask why they are losing services, we will point to the priorities that the SNP Government has adopted. In last year’s election, the SNP promised to protect people from the excesses of the Tory Government, but today the SNP is passing on cuts to local authorities that are twice the level that it received in real terms.
We know that the way in which councils spend their money can make a huge difference to the local economy. In Edinburgh, we campaigned against the wholesale privatisation in our local council that the SNP-Liberal Democrat administration proposed to save money. That process cost £4 million before it was scrapped. As I said in response to an intervention from the cabinet secretary, even with the application of the 85 per cent floor, the City of Edinburgh Council has a current debt level of more than £1.5 billion. Councils across the country, regardless of whether they are Labour controlled, SNP controlled or run by a coalition, will be taking tough decisions because of the local government finance order that will be passed today. It piles on severe pressure.
I return to the intervention that I made earlier. I ask the member to use her time to tell us how much more resource the Labour Party would allocate to local government and where the money would come from. We have not had an answer to that question throughout the debate.
It is simply not possible for us to delve into the SNP budget on the basis of our finance spokesperson having had a half-hour meeting with John Swinney. We are not in control of the budget—the SNP has majority control of the Parliament, so it is the SNP’s budget. We cannot even propose amendments to it. John Swinney knows the answer to his question as well as I do.
No, not again. The SNP is in control of the budget—it is the SNP’s budget.
We have heard that 89 per cent of the cuts in the budget are to local government. We talk about preventative spend, but the health service’s money will be used to shore up gaps in local government spending on some of the most vital social care services, which I mentioned in my opening remarks.
It is not scaremongering. In Edinburgh, we had to force our local council to remove proposed cuts in its budget that would have affected the most vulnerable people in our community. Those are the people who deserve and need local government services. If those services are cut, the issues will have to be picked up through spending on the health budget line, which will make preventative spending all the tougher.
Last week, the Local Government and Regeneration Committee produced a report on the living wage, which is another interesting challenge for local government. John Mason said that we have to wait for independence before we can really discuss that, but that committee report is on the table now. Will consideration be given to enabling local authorities to make progress on the living wage for their staff and through procurement processes, or will authorities be left to find the cash without Scottish Government support, as has happened on so many issues? One of our jobs as MSPs is to ensure that we get fair deals for our constituents, and not just for those who are well organised or vocal, but for those whose daily lives are a struggle and who depend on local services to support their relatives, such as adults with learning disabilities, children with special needs or older members of the family.
The test of the local government finance order will be its impact on budget settlements across the country. We regret the fact that, far from protecting the most vulnerable people in our communities, the Government’s budget settlement will make their life harder and will result in tougher choices for every local council. Our amendment merely draws attention to the fact that the SNP Government has more than doubled the budget cut from the Tory Con-Dem Government. It will be up to SNP candidates across the country to explain that to hard-pressed constituents. We lodged our amendment so that, although the order will be passed, that point can at least be made clear to people.
The most vulnerable people in our communities will not look at the finance secretary’s detailed calculations. In Fife, they will look at the 6.6 per cent rise in council tenants’ rent this year. Preventative spending will be harder because of the budget. I hope that colleagues from all parties will support the amendment in my name. In the budget that the minister proposed yesterday, 89 per cent of the cuts were passed on to local government. How is that fair?
It is unfortunate that the Labour Party’s contribution to the debate has been so predictable; it has been negative, with a complete absence of ideas about how to approach the local government budget settlement. I note, too, the absence from the chamber of members who have made a number of commitments over a period of months. They have not been in attendance today to tell us how they would pay for such commitments, particularly in their local areas.
I am satisfied with the budget settlement for local government in view of the resounding mandate that the Scottish Government received at the elections, when one issue was protection of the health budget, which had a resounding endorsement from the people of Scotland. If we exclude the health figures, with the clear mandate that the Government had for that, the share of spend on local government is actually growing, contrary to what the Labour Party has said this morning.
Further, on Gavin Brown’s challenge, there is not a reduction in the cash settlement but a broad, consistent and moderate cash increase over a three-year period, so local government will experience a flat cash settlement.
What the Labour Party says on the share of local government spend is completely different from what it did when it formed an Administration with the Liberal Democrats. Under that Administration, the share of spend for local government decreased; whereas under the SNP Administration it has increased.
Members: Hear, hear.
In the financial year 2011-12, the budget protection to local government was 2.5 per cent compared with a reduction of 6.4 per cent in unprotected budgets elsewhere. We have therefore practised a methodology that protects local government finance while maintaining the commitments that we have made to the people of Scotland.
If it is such a bad deal, why is it that all 32 council leaders have written to Mr Swinney to sign up to the financial package that the Scottish Government has outlined? That is not the case in England, where one fifth of local authorities will turn down funding for a council tax freeze. They will therefore have the worst of both worlds in England, with tax rises at the same time as deep cuts. The cuts for local government in England are three times deeper under the Administration there than those that we have experienced in Scotland. So, when the Labour Party tells us to look to Westminster for the answers on local government finance, I think that we will politely decline that request, because it would mean much deeper cuts in local government and the redundancies and council tax rises that people in England will suffer.
We can consider, too, what the Labour Party has done in Wales. Its broad settlement there for local government is very similar to that of the Scottish Government in Scotland. So, the different approach that the Labour Party suggests here is not what it is doing where it is in power.
The real-terms reduction in England will be 18.6 per cent compared with 6 per cent in Scotland. They are doing there in one year what we will do over a three-year period, which shows that our settlement for local government is far more generous.
The massive investment that we will provide through the new budget finance that was approved yesterday will be welcomed across the country. However, Labour did it again today: Anne McTaggart said that Glasgow is discriminated against in favour of Edinburgh, while sitting in front of her was the Labour spokesperson, who said the opposite.
Okay, perhaps Sarah Boyack did not say it, but the Labour Party in Edinburgh says it pretty clearly. Labour councillor Ricky Henderson said that the SNP is funnelling money out of Edinburgh, but of course the Labour Party in Glasgow says the opposite. That inconsistency and hypocrisy is completely unacceptable. It is not that the SNP Administration has given up on Glasgow; it is that the people of Scotland have given up on Labour. That includes one of their own councillors—the defector, ex-Labour Councillor Rabbani—who pointed out that it seems that his party would rather pick fights with the SNP Government than stand up for the city of Glasgow. He is exposing the myth that Glasgow does not get a fair deal from the Scottish Government.
I will return to health. Glasgow will, of course, be one of the major beneficiaries of the real-terms increase in health spending, which will help to turn around the appalling levels of poor health in Glasgow.
It is clear that Jackie Baillie has not been informed that the Labour Party’s position this morning has been to abandon an increase in health spending and turn to increases in local government spending.
On what the SNP has ever done for Glasgow, there is the new south Glasgow hospital, the Commonwealth games investment, Clyde fastlink, the City of Glasgow College, further rail improvements and the M8, M73 and M74 work. There has been massive investment in Glasgow, which I am sure the people of that city will continue to welcome.
No, thank you.
If the Labour Party continues on the current track, I am sure that it will continue to lose members from its city group.
Right across the country, the Labour Party has said that the budget is unfair and that money is going to some other part of the country. In reality, the review of local government finance distribution was led by a Labour president of COSLA and a Labour finance spokesperson, and Labour unanimously approved the review when it was presented to COSLA. In fairness, I say that only Aberdeen City Council dissented, but it is now very happy with the funding package that it will receive and the 85 per cent floor that has been presented. Even in the amendment, the Labour Party makes no reference to how it would change the distribution system.
Let us talk about the realities on the ground. More budgets will be set today, this week and over next week. The doom-and-gloom world that Sarah Boyack described is not one that local government, through its local settlements and budgets, is approving. Rather, it is approving—I checked this morning—new projects for youth employment, investment in infrastructure and housing, agreements to freeze the council tax, and more support for programmes that make differences to people’s lives. That is the reality right across the country.
I have checked a list of Labour’s spending commitments—I do not have time to turn to the Tories’ or Liberal Democrats’ spending commitments. There is a 20-page list of spending commitments from the Labour Party, which include Jackie Baillie’s on kinship care, Elaine Murray’s on bus services, Johann Lamont’s on job creation and Drew Smith’s on child care. That is just page 1. I could go on at great length and wax lyrical about the number of completely unfunded promises that the Labour Party has made. The Labour Party says that we are targeting resources at our geographical areas of support, but it is pretty hard to be in the SNP and be biased about targeting resources to areas of support, because we represent every part of the country, such was the mandate that the party was given at the previous election.
The deal is a good one for local government in the circumstances, and I think that councils will continue to be positive about the arrangements and the consensual way in which we have approached the budget discussions.
Yes, I do. What is more, there is the commitment on housing investment to meet the 30,000 affordable homes target. Will that be met in this session? Yes, it will. So—yes and yes.
In summary, we have before us a budget deal that will deliver for local government and enable much progress to be made across Scotland. The Labour Party carelessly voted against it yesterday—that also goes for the Conservatives, of course. They asked about town centre support. More than £0.5 billion of rates relief in the package, which the town centres will benefit from, has been opposed by the Conservatives.
We are asking members to agree to a settlement that will take Scottish local government forward by working in partnership with others to deliver on our joint priorities: continuation of the council tax freeze, further investment in education and school building, record attainment levels, record primary 1 to P3 class sizes, maintaining police numbers, housing investment, substantial youth employment schemes across the country—before the Minister for Youth Employment, Angela Constance, makes further enhancements to the programme—a capital boost to encourage economic recovery, the tackling of the waste agenda and environment issues, investment in infrastructure, promotion of social care, and further implementation of the living wage across Scotland.
I have three seconds left. Further financial flexibility will allow local government to deliver on its priorities. In the circumstances of the drastic Westminster cuts, this is a good, fair and positive deal for local government.