I reiterate that the local government settlement that the Government has put forward is based on a strong series of financial settlements that we have put in place for local government. The analysis that I provided to members was that, between 2007-08 and 2012-13, the Scottish Government’s income increased by 6.4 per cent, but the local government budget increased by 8.9 per cent. I will explain matters quite simply. That demonstrates that local government’s allocation of resources has grown at a faster rate than the Scottish Government’s overall budget. To me, that is a good settlement for local government.
Sarah Boyack talked about reductions in capital. I do not know whether the Labour Party has missed the fact that the United Kingdom Government has dramatically reduced capital expenditure budgets across the United Kingdom. I cannot allocate money that I do not have—I have frequently gone round the houses on that point with the Labour Party. Local government was assured that it would have 28 per cent of the capital budget available to the Scottish Government as part of the spending review settlement, and I have fulfilled that assurance.
I am glad that Sarah Boyack has acknowledged that the Government’s leadership on the living wage is encouraging more participation by local authorities in taking up that priority. On behalf of the Scottish Government, I unreservedly welcome the number of local authorities that now pay the living wage, and I am delighted that our partners in local government are working with us so effectively in that respect.
On local government’s approach to borrowing, it has a prudential code to follow in borrowing for capital investment purposes. The First Minister and the president of the Convention of Scottish Local Authorities, Councillor O’Neill, wrote jointly to all the local authorities in September to encourage the maximisation of investment in capital projects. I have seen a number of very helpful and positive responses from leaders of local authorities in Scotland of all political persuasions, and I welcome the contribution that they have made to the process of strengthening the capital expenditure provisions in Scotland in such difficult financial times.