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Local Government Finance (Scotland) Order 2020 [Draft]

– in the Scottish Parliament on 10th March 2020.

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Photo of Linda Fabiani Linda Fabiani Scottish National Party

The next item of business is a debate on motion S5M-21170, in the name of Ben Macpherson, on the Local Government Finance (Scotland) Order 2020.

Photo of Ben Macpherson Ben Macpherson Scottish National Party

The purpose of the debate is to seek Parliament’s approval for the guaranteed allocations of revenue funding to individual local authorities for 2020-21; it also seeks agreement to the allocation of additional funding for 2019-20 that has been identified since the 2019 order was approved at this time last year.

The delay to the United Kingdom Government’s budget means that we still do not know the total budget that will be available to Scotland next year. We have therefore had to make assumptions around Barnett consequentials, use provisional economic forecasts and take decisions on devolved tax policy without knowledge of future UK tax policy. That position is not of our choosing, and it creates unnecessary challenges.

Under challenging circumstances, the 2020-21 budget delivers a fair settlement for local government. It is a funding package that provides local government with a real-terms increase in both revenue and overall funding to invest in our public services. In 2020-21, the Scottish Government will provide councils with a total funding package that is worth £11.4 billion, which includes revenue funding of £10.7 billion and support for capital expenditure of £778 million.

The order that is before the Parliament seeks its approval for the distribution and payment of £9.9 billion out of the revenue total of £10.7 billion. That £9.9 billion is a combination of general revenue grant of £7.1 billion and the distributable amount of non-domestic rates income, which has been set at £2.8 billion. The Scottish Government continues to guarantee each local authority the combined general revenue grant plus non-domestic rates income. That means that any loss of non-domestic rates income resulting from adverse impacts of Brexit or Covid-19 will be compensated for by increased general revenue grant.

For clarity, the remainder of the funding package will be paid out as specific grant funding or other funding that will be distributed at a later stage in-year, once it has been agreed with the Convention of Scottish Local Authorities.

Photo of Andy Wightman Andy Wightman Green

The additional £95 million of revenue funding that was secured in the budget deal with the Scottish Green Party does not appear to be mentioned in the order, given that the individual figures for each local authority are the same as those in annex L to the settlement letter that was sent on 6 February. Will the minister clarify where that £95 million is being allocated, and when?

Photo of Ben Macpherson Ben Macpherson Scottish National Party

I thank Mr Wightman for his timeous intervention. I was about to say that the overall funding package for 2020-21 includes an additional £95 million of revenue funding to further support spending on day-to-day services, as announced on 27 February, during the stage 1 debate on the Budget (Scotland) (No 4) Bill. It also includes £100 million for investment in health and social care and mental health services that are delegated to integration authorities; £156 million for the teachers’ pay award and £97 million for teachers’ pensions; and £201 million of revenue and £121 million of capital to support the expansion of early years education and childcare to 1,140 hours by August 2020. There is also £88 million to maintain the pupil teacher ratio and to secure places for all probationers who require them. The flexibility for local authorities to increase council tax levels by up to 3 per cent in real terms is worth an estimated £135 million.

Photo of Ben Macpherson Ben Macpherson Scottish National Party

I am keen to make some progress.

The 2020-21 settlement from the Scottish Government provides local government with an increase in spending for local revenue services of £589 million, or 5.8 per cent. Taken together with the potential to raise council tax income, that means that councils had access to up to a total increase in spending power of £724 million, or 7.2 per cent, to support local authority services.

All local authorities have now set their council tax levels for next year. It should be noted that, had all councils taken up the opportunity to increase council tax revenue by 3 per cent in real terms, a further £8.3 million would have been available for local services. It is clear that those councils that have not taken up their full council tax flexibility consider that they have a fair settlement.

There remains a further £51.9 million of revenue funding that will be distributed once the necessary information becomes available, and that funding will be included for approval in the 2021 order. The amounts involved, which were agreed with local government, are as follows: £37.6 million in respect of the 2020-21 teachers induction scheme; £11.9 million in respect of the balance of the discretionary housing payments; £0.5 million in respect of mental health school counselling services; £0.4 million in respect of implementing the Barclay review of non-domestic rates; and £1.4 million in respect of the customer first top-up.

In addition to the revenue funding that is contained in today’s order, there is specific revenue funding that is paid directly by the relevant policy areas under separate legislation, which amounts to £709.7 million. That includes £120 million of pupil equity funding, £86.5 million for criminal justice social work funding, £487.3 million of funding for early years expansion, £11.5 million of additional support for northern ferries and £4.4 million of Gaelic funding.

The order also seeks approval for changes to funding allocations for 2019-20 of £327.3 million, which have been added to fund a number of agreed spending commitments. The full list of changes, which can be found in the report to the 2020 order, include the provision of £141 million for teachers’ pay; £60.1 million for teachers’ pensions; £37.5 million to support the 2019-20 teachers induction scheme; £29.5 million for free personal care for the under-65s; £15 million for additional support for learning; £12 million to provide counselling services in schools; and £2.1 million to allow free access to sanitary products in our schools.

In summary, the total funding from the Scottish Government to local government next year amounts to £11.4 billion. The funding proposals continue to deliver a fair financial settlement for our partners in local government, which will be strengthened by continued joint working to improve outcomes through first-class public services.

I move,

That the Parliament agrees that the Local Government Finance (Scotland) Order 2020 [draft] be approved.

Photo of Graham Simpson Graham Simpson Conservative

I tried to intervene on the minister because I did not think that he had fully answered Mr Wightman’s question. The minister might want to return to it, because the question was this: where does the extra £95 million appear in the order? If it does not appear, it does not appear, so the minister might want to reflect on his response.

This is a technical debate about giving local government the money that it needs. On that basis, it would be remiss of us not to support the motion because, clearly, local government needs to be funded. That does not mean that we have to like the settlement. However, it is the settlement, and we need to pass that money to the councils so that they can provide the services.

Indeed, we do not like the settlement. In the various budget debates in the past two weeks, we have said what we think about it. We think that this year’s settlement—like the one last year, the year before, the year before that and so on—does not provide proper or fair funding.

I recall having a debate with Kate Forbes’s predecessor at the Local Government and Communities Committee last year—and indeed with Kate Forbes herself—about what the definition of “fair” is. My view is that, if all councils in Scotland are having to make cuts, that is hardly fair.

Photo of John Mason John Mason Scottish National Party

I agree that defining what is fair is not always easy. Does the member think that the national health service has had too much money and he would cut that to give more to local government?

Photo of Graham Simpson Graham Simpson Conservative

I always regret letting in John Mason, because he makes the most obscure points. This is a debate about local government funding. Is he saying that the settlement is fair? I do not think that it is, because we are still ending up in a position in which every one of Scotland’s 32 councils is having—

Photo of Graham Simpson Graham Simpson Conservative

Here comes Mr McMillan. I may as well let him in, too.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

Is Mr Simpson seriously saying to the chamber that, prior to this Parliament, when the Conservatives were in power in London, no cuts were ever made to local authority budgets in Scotland?

Photo of Graham Simpson Graham Simpson Conservative

I am not saying that at all. I am dealing with the settlement that is in front of us today, which delivers cuts to every single one of Scotland’s 32 councils.

That is not fair. It has left councils on the brink. A series of leading councillors from across the political spectrum—Alison Evison, who is COSLA’s president, Steven Heddle, and Gail Macgregor, my good friend who leads on finance for COSLA—have said that in the past few weeks. There may even be the odd SNP council leader who—privately—does not like what is going on there. Scotland’s council leaders are disappointed. [

Interruption

.]

I hear Mr Lyle chuntering away, as he often does. If he has anything worth while to say—not his usual, “Oh!” from a sedentary position—let us hear it; I will let him in. [

Interruption

.] If Mr Lyle has something positive to say, he can say it. It appears as though he does not.

Council leader after council leader has said that the settlement fails to restore any of the significant cuts to local government core funding in previous years. They say that it represents a 2 per cent, or £205 million, cut in real terms in revenue funding for local government. In addition, they say that what is needed is an extra 2 per cent funding for inflationary pressures and 3 per cent for the restoration of previous funding cuts, and the restoration of the £117 million cut to the capital allocation. That is what is needed, and that is what this settlement does not provide.

Photo of Graham Simpson Graham Simpson Conservative

No. I have taken a couple of interventions. I was hoping that Mr Lyle would intervene, but he has not.

We have a situation in which revenue is going down. It will take £300 million just to stand still. That is not being delivered.

The proper funding of councils matters. It matters when we want to tackle child poverty, for example.

Photo of Graham Simpson Graham Simpson Conservative

Oh, here is Mr Lyle—we have got him to intervene.

The Deputy Presiding Officer:

I ask that it be a quick intervention, please.

Photo of Richard Lyle Richard Lyle Scottish National Party

Does the member agree with me that the Tory party has severely cut councils in England? The cuts there are greater than the cuts that Scotland’s councils have had to suffer.

Photo of Graham Simpson Graham Simpson Conservative

My word—we have the old English excuse. This is the Scottish Parliament, and in the Scottish Parliament we are cutting money to Scottish councils.

I would have thought that Mr Lyle, who represents North Lanarkshire, would have been concerned about that. He should be jumping up and down about what is happening in North Lanarkshire, not about what is happening in England. He seems to be more concerned about what is going on over the border than he is about what is happening on his own doorstep. What a position that is! Mr Lyle needs to explain to his constituents why he is taking that view. What an absurd position!

COSLA’s children and young people’s spokesman—[

Interruption

.]

The Deputy Presiding Officer:

I ask members to calm down. Mr Simpson, could you come to a close fairly soon?

Photo of Graham Simpson Graham Simpson Conservative

I would be delighted to come to a close.

This settlement does not add up for local government. It leads to cuts across the board. However, councils need the money, so we will support the motion, albeit begrudgingly.

Photo of Sarah Boyack Sarah Boyack Labour

As it gives councils a third of the money that they need to deliver Scottish Government promises, to carry out their obligations and to provide the services that their communities need, the local government settlement is nothing to celebrate.

I want to make three points, focusing on the disproportionate cuts to local government by the Scottish National Party, the Government’s increased control over the money that local government is allocated, and the impact that those two factors have on our communities and constituents.

The Scottish Parliament information centre has noted that, since 2013-14, the Scottish budget allocation from the UK Government has increased by 2.6 per cent, yet the Scottish Government has reduced allocations to local government by 3.8 per cent. As I observed in the main budget debate, the settlement falls against a backdrop of almost £900 million-worth of cuts to non-ring-fenced revenue funding since 2013-14; the loss of 10,000 full-time-equivalent jobs, which translates to 33,000 redundancies; a slashed capital budget that has left councils needing to borrow for funding for vital projects, which takes that money out of their revenue spend; and the curtailing of services, which hits those who need them.

Last week, SNP ministers made great play of the fact that there would be no tax increases for people on low and middle incomes. However, they passed on the difficult decisions to councils. Grappling with gross underfunding, councils have to use the levers that are available to them to balance the books: raising council tax and increasing charges for services. We have long argued—and, I understand that the SNP has recognised this, too—that council tax is a regressive tax, as it is those who are least able to pay who are hit the most. Data from SPICe shows that, even after the relief schemes, the lowest 10 per cent of earners pay 17 per cent of their income in council tax, compared with the 1.5 per cent that those in the top 10 per cent pay. If we add to that increased charges for services that councils provide, we can see that lower-income households will be priced out of services that they are already struggling to access.

There is also the issue of comparing this year’s level of local government funding with last year’s. There has been a reduction in capital but an increase in ring-fenced capital allocations. There has been a reduction in the general revenue grant but an increase in specific resource grants.

The minister told us today that COSLA agreed with the decisions to ring fence core expenditure, but I believe that, this year, the Scottish Government has gone too far. In the days before the Parliament was established, we used to have a Scottish Administration, with its policy and funding set at a UK level. What an irony: we now have a Scottish Government that, increasingly, is turning local government into local administration.

Photo of James Dornan James Dornan Scottish National Party

Does the member recognise that there is much less ring fencing now than there was under the previous Labour-Liberal Democrat Government?

Photo of Sarah Boyack Sarah Boyack Labour

That was happening at a time when, through Gordon Brown’s interventions, the money was being doubled. We are talking about a reverse in approach. We now have a Scottish Government that is turning our local government colleagues into administrators, leaving them all the tough decisions. That approach gives the Scottish Government little pots of money to allocate throughout the year, which is much better for photo opportunities, but it means that our constituents suffer.

We need to pay attention to the human stories behind all of this. Take social care as just one critically important example of a council service that is facing cuts. I want to share the struggle of one of my constituents who is trying to get a basic care package to enable them to go about their daily life. My constituent was assessed as having a care need in May last year. They came to me for help in November and, this week, I have found out that, still, no appropriate care and support is being offered, as there is no agency to provide the care, and there have not even been any basic safety measures installed.

It is a case riddled with lack of resources and high staff turnover, demonstrating the crisis in social care in our local authorities.

That is not the only such case; we know from statistics that such problems are widespread. The cuts to local government are now so severe that even statutory services such as care and education are at a breaking point and under huge pressure. That is the human cost of underfunding local government. Waiting six months for a care package is unacceptable, no matter how the Government spins it, as is the pressure on the staff who are trying to provide services, who we know are having to take sick leave.

It is clear from the order that is in front of us that our councils do not have the resources that they need for the long term. Lack of investment in our communities ultimately costs all of us. It increases poverty and undermines our communities, so it is time for change. What we need are bold, transformative policies to deliver real results by creating jobs, ending poverty and tackling climate change. Sadly, that is not what the order is about.

Photo of Andy Wightman Andy Wightman Green

As members have said, this is an important debate about allocating more than £9.8 billion to local government, but giving it an hour barely does it justice. Nevertheless, as members will know from my previous contributions in the chamber, the Greens believe that it is fundamentally

“better for all of us if decisions about” local authorities’ finances

“are taken by the people who care most about” that local authority—that is, the people living in the local authority.

Alert members will recognise that that turn of phrase was used in the yes campaign for the 2014 independence referendum. What is argued by some to be a right for Scotland should also be a right for local authorities. Thus, it is a matter of regret that so much of the capital and revenue allocations for councils continues to be determined by the Scottish Parliament.

While that remains the case, the Greens will continue to do all that we can to ensure that the funding settlement is adequate. We have secured hundreds of millions of pounds in extra revenue over the past few years, although I freely admit that the settlement before us is not one that we would seek to secure if we were in government. For one thing, despite the historic decline in ring fencing, the financial settlement continues to be bedevilled by ring fencing and by terms such as “protected funds” that are still not clear and that compromise the scrutiny of the budget that we in the Local Government and Communities Committee have been able to make.

That is true to the extent that this year’s additional commitments were not even fully funded, despite a Government commitment to that effect, which is why filling the £95 million hole was an important achievement in this year’s budget. I would be grateful if the minister could provide extra clarity in his closing remarks as to when that £95 million will be delivered and why it is not in the order. As I understand it, the order was laid on 19 February and we had the stage 1 debate on the budget on 27 February, when we reached agreement on that quantum of £95 million.

Despite differences of opinion on the sums of money that are outlined in the order, we should all vote for it tonight, as it provides the legal basis on which the Scottish Government can transfer substantial sums of money to councils, which rely on it to deliver vital public services. The decisions on how that money is spent are made by councils. One of the interesting things in recent years, following on from a Green initiative in the City of Edinburgh Council, is that citizens now have the opportunity not only to scrutinise council budgets but to be actively involved in the process, through participatory budgeting. By law, from 2020-21, at least 1 per cent of council budgets will be subject to participatory budgeting, which directly involves the public in how money is spent. We do not believe that 1 per cent is enough, but it is worth noting that it is more than the percentage of the Scottish budget that is allocated by any participatory budgeting, because that percentage at the moment is zero. The Scottish Government should consider participatory budgeting in future.

It is long past the time to increase the fiscal autonomy of local government. That is why we are pleased to have secured longer-term reforms, including the important commitment to a fiscal framework: a rules-based framework that provides clarity and predictability for the funding settlement and that, I hope, will take some, if not all, of the political dynamics out of it in future years. Earlier this week, I was interested to receive a letter from Gail Macgregor, COSLA’s spokesperson for resources, which I am sure other parties have received and which outlines COSLA’s thinking on how the fiscal framework might operate. I was interested in particular to note a reference to article 9 of the European Charter of Local Self-Government, as I will shortly introduce a member’s bill to incorporate the charter into Scots law.

If local government does not have the autonomy that it needs, it can serve its citizens no better than this Parliament could if it did not have sufficient powers. In turn, lack of agency erodes trust between citizens and the local state. I do not feel comfortable sitting in this Parliament voting on how much money local government should receive. However, we are where we are, so we will support the order at decision time.

Photo of Willie Rennie Willie Rennie Liberal Democrat

I am grateful to SPICe and the financial scrutiny unit for giving members the detailed breakdown of the allocations to local authorities.

I am sure that you will remember, Presiding Officer, that we have been debating these matters for some time and, in particular, the shortfall for Aberdeen City Council, Aberdeenshire Council and the City of Edinburgh Council under the local government financial settlement. Previously, those councils did not get anywhere near the level of grant that other local authorities receive, so the SNP Government pretended to listen and enacted the 85 per cent rule to ensure that every local authority got at least 85 per cent of the average. That did not work either, because councils such as Aberdeen, Aberdeenshire and Edinburgh often still did not meet the rule.

Photo of Willie Rennie Willie Rennie Liberal Democrat

Not just now.

Each of those councils was deprived of millions of pounds every year. It was not untypical for Aberdeen to lose out on £20 million in one financial year, but SNP MSPs from Aberdeen, such as Kevin Stewart and Maureen Watt, still voted for that.

To get round that embarrassment, ministers changed the rule. They did not increase the funding; instead, they changed the rule. It had been based on the average of all councils in the country, but it was changed to include all councils except Orkney Islands Council, Shetland Islands Council, Western Isles Council, Argyll and Bute Council, West Dunbartonshire Council and Inverclyde Council—so it was all the councils, except not all the councils.

However, that still did not quite work. Taking out a fifth of the councils was not enough, so the Government changed the formula again and lumped in council tax revenue on top of Government grant. Finally, the jiggery-pokery worked: all councils met the rule, but without receiving one single penny more in funding. The City of Edinburgh Council only just meets the 85 per cent rule, even though it is still millions of pounds short. Therefore, the big question this afternoon is: will Ben Macpherson stand up for his city, in the way that Maureen Watt and Kevin Stewart did not? Will the minister stand up for Edinburgh or will his city get the same treatment as Aberdeen?

Photo of Willie Rennie Willie Rennie Liberal Democrat

Not just now.

Can Ben Macpherson explain why he is short-changing Edinburgh through the Government’s formula? The difference is worth £116 per person, which would amount to £60 million across the city. When we look at how the SNP council in Edinburgh is cutting teacher numbers in nursery schools and threatening support for community policing, we wonder why the Government is not taking the issue much more seriously. The council estimates that it will have to make savings totalling £100 million by 2022-23.

Aberdeen City Council is used to that. It has been kept at the bottom of the table for a decade, without its SNP MSPs lifting a finger to help. This year, it is the same again. The council is £57 per person below a true 85 per cent floor, which means that it is almost £13 million short.

Let me go back to what Ben Macpherson is going to do this afternoon. Will he stand up for his Government and its rigged formula, or will he stand up for his city?

The Deputy Presiding Officer:

We now move to the open debate.

Photo of James Dornan James Dornan Scottish National Party

I am delighted to speak in the debate which, thankfully, comes at the end of a budget process.

I put on record my sincere admiration for how Kate Forbes, our new Cabinet Secretary for Finance, along with her team, steered the Government through difficult budget negotiations.

Photo of James Dornan James Dornan Scottish National Party

Sorry, I woke Richard Lyle up.

Kate Forbes and her team secured an agreement that boasts support for young people, police, climate action and local government.

Despite being set against a background of heightened uncertainty and risk that has been created by the Tory Government, following its decision to delay the UK budget until only this week, the Scottish Government’s budget provides local government with a substantial funding package worth £11.4 billion in total.

I know from my local authority, Glasgow City Council, that local government faces financial challenges. So does central Government—from continued Tory austerity and cuts to our budget.

Chancellors, including the last one, Sajid Javid—who, by the way, did not manage to produce even a single budget—promised an end to austerity in 2018 and again in 2019 and failed to deliver. I do not hold out any hope for an end to austerity tomorrow, either. To be honest, does any member?

Scotland’s discretionary resource budget allocation in 2020-21 will be 2.8 per cent or £840 million lower in real terms than it was in 2010-11. That obviously has a knock-on effect on central and local government finances. Nonetheless, the relative protection that we have been able to provide means that our council budgets are under considerably less pressure in Scotland than those of councils in England where, despite their wanting to hide it, the Tories are in government.

This year’s local government finance settlement, which delivers the highest annual revenue budget increase since this Administration came into power, will boost day-to-day spending for local services by £590 million in cash terms, which is a real-terms increase of 3.9 per cent.

The settlement will allow councils such as Glasgow City Council to deliver on the expansion of free early learning and childcare provision; to protect the most vulnerable in our communities; to ensure improved outcomes with the integration of health and social care services; and to maintain the pupil teacher ratio. On that last point regarding teacher numbers, Labour’s budget in Glasgow would have cut 200 teachers from our schools at a time when we are making huge progress on overcoming our poverty-related attainment challenges. As I have admitted, there are—of course—pressures on our finances; however, whether it is central Government or local government, Scottish Labour’s priorities continue to be all wrong.

Despite our challenging financial situation, in addition to protecting our local councils, we remain in a position to protect our council tax payers, too. In 2019-20, the average charge for all property bands—including E, F, G and H—is between £330 and £499 lower in Scotland than it is in England. The average band D council tax bill in Scotland this financial year is £1,251 compared to £1,750 in Tory-run England and £1,591 in Labour-run Wales. Furthermore, we are also able to maintain the UK’s most competitive business rates regime.

Photo of Bob Doris Bob Doris Scottish National Party

It is reasonable to ask for more money for local government; however, in so doing, one must say where that money will come from. Did any of the parties on James Dornan’s committee suggest how much more councils should get and where that money would come from?

The Deputy Presiding Officer:

Please speak through the chair instead of having conversations with each other, even though you are standing so close to each other.

Photo of James Dornan James Dornan Scottish National Party

Bob and I are always close, Presiding Officer.

That question was asked of almost every witness who was in front of the committee. None of them could give a positive answer as to how they would raise the money for the extra costs that they asked for, and no members of other parties could come up with a fully costed plan either.

Furthermore, we are able to maintain the UK’s most competitive business rates regime with the lowest poundage and a relief package, including the small business bonus and the business growth accelerator, that is estimated by the Scottish Fiscal Commission to be worth £744 million. Scotland’s poundage will be 49.8 pence, delivering a below-inflation increase for the second consecutive year. Limiting the increase to 1.6 per cent will ensure that 95 per cent of properties in Scotland pay a lower poundage than is the case in other parts of the UK.

Before closing, I add that our local councils will be key players in how, as a country, we tackle the coronavirus outbreak. I therefore hope that in tomorrow’s UK budget we will see additional resources to help us deal with such pressures and to end austerity. I am sure that we will all be waiting with bated breath.

As I outlined, it is absolutely clear that, despite on-going pressures from Tory austerity, this Scottish Government continues to treat local government very fairly, enabling them to provide high quality front-line services that improve outcomes for people and communities right across Scotland. I will be delighted to vote in favour of the finance order this evening.

The Deputy Presiding Officer:

Right—we are already over time in this debate. Unless others are very tight in their timing, I will have to take the time off the closing speeches.

Photo of Jeremy Balfour Jeremy Balfour Conservative

I, along with my colleagues on this side of the chamber, will vote for the order. However, I will vote for it with a deeply heavy heart as a result of the lack of ambition from the Scottish Government. We see, in not only this financial settlement but previous financial settlements, the SNP’s clear lack of prioritisation of council funding. We have seen cuts, we have seen services affected and we have seen council taxes rise.

Photo of Jeremy Balfour Jeremy Balfour Conservative

In a moment.

We sit here and quote at each other figures that, to be honest, are beyond the average person. I will give the minister an example of an individual in his constituency here in Edinburgh. This is what she wrote to me earlier this week:

“I am the parent of a child attending ... a Primary school nursery in Edinburgh ... Our excellent nursery teacher does an incredibly valuable job of laying the foundations for school years and has my full support. I was shocked to hear she could lose her post this summer and I believe that the removal of the teacher post would disrupt early years learning” in the school

“and the development of our children next year.”

I ask the minister in his summing up to apologise to that lady and the many others in this city who are losing teachers because of the settlement that he is proposing.

Photo of Jeremy Balfour Jeremy Balfour Conservative

No, I will not. The minister said in his opening remarks that he thinks that this is a “fair settlement”. How is it fair for that child to lose their teacher? The minister will say that it is his SNP cronies at the council who are making those decisions, but they are doing so because it is his Government that lacks ambition for our children and older people and cuts the funding to councils, not only here in Edinburgh but across Scotland. In his summing up, the minister should apologise to the people of Edinburgh for that shocking cut.

Photo of Bob Doris Bob Doris Scottish National Party

My question to Jeremy Balfour is the same as the one that I put to Mr Dornan. It is very easy to ask for money for councils, but he must put a sum on that and say where the money will come from. Will Jeremy Balfour put a sum on it and say, today, where the money will come from?

Photo of Jeremy Balfour Jeremy Balfour Conservative

Yet again, the SNP does not seem to understand what we are debating. We are not debating the budget; the budget happened last week and we voted against it. The SNP got the Barnett bonus and it has simply misused it. It has not given the money to local government and the people of Scotland are waking up to that. [

Interruption

.]

All the shouting from the SNP seats sums up a deep and uncomfortable feeling among SNP members.

The Deputy Presiding Officer:

There is no time for further interventions.

Photo of Jeremy Balfour Jeremy Balfour Conservative

I conclude with the words that I started with: we will vote for the motion with a heavy heart, but the message when we vote for it tonight will be that this Government and this SNP Party do not care about local communities or local funding. They are cutting local government and they should be ashamed of it.

Photo of Rhoda Grant Rhoda Grant Labour

The debate focuses entirely on the work of local government and highlights that it has borne the brunt of cuts. We all know that those cuts fall disproportionately on the poor and on women.

As Sarah Boyack said, non-ring-fenced revenue funding has been cut by £898.8 million in real terms between 2013-14 and this budget. That is the money that councils use to react to differing circumstances in their areas; it is their discretional spend. They fund such things as economic development and provide services that meet the needs of their communities. That cut shows that councils have no discretion at all.

Details of the impact of those new cuts are only now coming to the fore. Councils such as Moray are having to increase burial charges and charge for music tuition in schools; I fear that music tuition will soon be available only to those who can afford it, to all our detriment. Moray is also cutting funding to Women’s Aid. Falkirk Council is having to remove Christmas lights, close public toilets and withdraw the taxi card budget. The taxi card helps people with disabilities who cannot use ordinary buses to travel in taxis at a reduced fare. Those cuts show that the most vulnerable in our communities are losing out.

An increasing issue in my postbag is the availability of assistance for children with additional support needs. That is being cut and young people who require support are losing out at school. Those young people already face challenge, which is being made worse by those cuts. Parents are unable to work because they are constantly on call for their child’s school. I have cases in which police are called regularly to deal with distressed children. Other young people who are deemed less of a priority, despite being assessed as needing assistance, are receiving little or no support at school. Again, it is the most vulnerable who are being affected.

Because of the underfunding of local government, community care also suffers. That is despite the setting up of integration joint boards, which appear not to have improved problems such as delayed discharge at all. They need investment, which our councils, in the face of cuts, cannot do. Some of the saddest cases are due to a lack of care at home. People are forced to live and die in hospital against their wishes and their needs. Cuts drain the compassion out of society.

Councils are increasing council tax to the maximum that the SNP Government will allow. It was clear from the minister’s opening statement that that is an expectation, not a suggestion. People are frustrated by seeing services being cut by councils while their council tax increases.

The SNP Government came into power promising to abolish the regressive council tax, yet over a decade later it is still there and increasing faster than inflation. In last year’s budget deal, the Greens were promised talks about its abolition. Those are on-going but are making no progress. Despite pleas for change, the only information that the Scottish Government presents to the cross-party talks is on the impact of tinkering with bands and revaluation. That is not the work of a Government committed to the abolition of the council tax.

When our communities complain about rising council tax bills and falling services, it is not to their local councillors that they should complain. Their complaints should be voiced to the SNP Government. That Government has imposed the cuts and the council tax rises. Councillors are merely doing the dirty work of the SNP Government, one that refuses to invest and that is too timid to make real change.

Photo of John Mason John Mason Scottish National Party

Once again, we are dealing with another aspect of the budget, although most of the decisions were made last week. COSLA made it clear that it needed an extra £95 million, which has been found with the help of the Greens. In Glasgow, that seems to have been enough to save the Blairvadach outdoor centre, which is very welcome.

I am sure that we all agree that local government could do with more money, and it is asking for more money. The problem is that we have a fairly fixed amount of money available—in fact, even that amount will not be entirely clear until after tomorrow’s budget at Westminster. We might have been able to raise a little more income tax, but that would probably only have been marginal, and we made that decision last week. As we said then, we cannot have too much divergence from the UK on income tax. Our powers over income tax are limited, and we have no control at all over VAT, corporation tax, inheritance tax or national insurance. It makes it much more difficult to create a joined-up tax system when we have control over the few but not the many.

That means that more money for local government would inevitably mean a cut to the national health service budget. I accept that the NHS budget has been better protected than most sectors’ budgets in recent years, but we must acknowledge that the health sector faces rising demand, greater expectations from the public and particular uncertainty at this time.

No sector has all the money it could do with, so everyone has to do the best that they can with the budget they have. It may be worth mentioning that members must be careful about increasing their own budgets—for example, for staffing—beyond inflation when others are not able to do so.

As well as the size of the local government cake, there is the question of how it is divided up between councils. Glasgow City Council feels that it gets a raw deal, as its needs are more severe than those of other councils and it feels that that is not properly taken into account. At the same time, other councils may—and do—argue that they get less per head, even if their needs are not so great.

That formula and the related “floor” could perhaps be improved, but that would require agreement from COSLA and local authorities, which is never likely to be easy to achieve.

Photo of Andy Wightman Andy Wightman Green

That formula, which Willie Rennie referred to, is agreed by the Scottish Government and COSLA. Does the member agree with me that the fact that there is no parliamentary scrutiny of it makes it very difficult to challenge some of its elements?

Photo of John Mason John Mason Scottish National Party

I do not know the details, but I would have thought that the Local Government and Communities Committee could have looked at the formula and investigated it. I am not sure whether it has tried that, or whether it has not been able to do that. Everyone has said that they are open to changing the formula, but the reality is that, if Aberdeen City Council is going to argue that it needs more money because it has more people and Glasgow City Council argues on the basis of need, it is difficult to reach an agreement.

I agree with Mr Wightman that we need a radical overhaul of local government financing, which will involve deciding how local government should be funded in the longer term. Most of us agree that council tax is far from ideal, but there seems to be no agreement on what would be better. Local income tax and land valuation tax both have their drawbacks.

Again, councils are being limited as to how much they can raise council tax, which some would think is too restrictive. However, many members remember when Labour raised council tax in Glasgow dramatically year after year, and we do not want to go back to times like that.

There has been progress, and councils will have powers over the tourist tax and the workplace parking levy. I would certainly like to see local authorities being much more financially independent of central Government than they are, and that could be built into a future Scottish constitution. However, that is more a hope for the medium to longer term.

Once again, we are having to choose priorities. We would all like to give more to everyone, but this is a reasonable settlement for local government given the tight restraints.

The Deputy Presiding Officer:

We move to the closing speeches. We are really tight for time.

Photo of Sarah Boyack Sarah Boyack Labour

This is a very short debate. We have discussed some of the key issues in previous weeks, during the main budget debate, so I will highlight some of the briefings that we received in advance of the debate, because they have not been referred to much.

I was grateful for the Unison briefing, and I hope that all members will read it. Unison has been interviewing its members and looking at the pressures in local government. The briefing stresses that cuts to local government impact on the capacity of staff to deliver. In addition to the pressures that are experienced by our communities, pressure is being experienced by hard-working council staff, who are trying to fill service gaps and help constituents who are increasingly stressed and suffering from increased inequalities and ill health. Unison’s most recent front-line briefing on social work vividly illustrates the impact of cuts on staff, the challenges that they have to deal with and the impact on their health and on staff absences. That issue has not come to prominence in the debate, but it will be a key issue for our local authorities in the future.

I acknowledge the work of my Labour colleagues in different council areas, who are doing their best to work with underfunding—as a direct result not just of this year’s budget but of budgets since 2013. My colleagues have worked hard to say no to privatisation and compulsory redundancies and to make sure that council staff are being paid the living wage.

Over the past few weeks, we have also received briefings from COSLA. Its arguments have been incredibly powerful, and they have not been addressed in this debate. COSLA has highlighted the profound impact of underfunding right across local government services—on education, transport, social care and investing to deliver the climate transformation that we need. In all those areas, our local authorities are not just deliverers of services; they are also key leaders in their areas. They have the capacity to make the changes, but underfunding is forcing them to go back to core services and not deliver the range of services that are absolutely critical.

My colleague Rhoda Grant mentioned Women’s Aid, taxi card budgets and music tuition—a whole raft of councils are beginning to charge for music tuition, and some already do. Those savings will hit us in the long term, because they mean that young people are not getting the opportunities, skills and experiences that they should have.

I will turn briefly to the fiscal framework, which was mentioned by Andy Wightman. I thought that his speech was very well judged and that he was honest in saying that this is not the budget that we need; it is the budget that is in front of us. We would have wanted it is to be better, which is why we do not think it is worth supporting.

The key principles in the fiscal framework should focus our minds. We have not seen parity of esteem—if we had, local authorities would be getting not only the additional £95 million but other money to deliver core services. We should be looking at the real-terms costs and at the presumption of subsidiarity, recognising its importance—the principle that devolution should go further than the Scottish Parliament and that that should be the norm. We should also prioritise the principle of essential services being at the core, for the benefit of our communities. Would that the order delivered on those principles, but it is clear that it does not.

I say to SNP colleagues that they need to do a harder job in pushing their Government, not just in public but behind the scenes.

Photo of Sarah Boyack Sarah Boyack Labour

No, I do not have time in my closing remarks.

Having been on both sides of the chamber, I have experienced the pressure to make a difference that comes from colleagues, and it is absolutely critical. The Local Government and Communities Committee took evidence from a range of stakeholders, and a lot of people do not like to criticise the Government, because it provides the funds.

The Deputy Presiding Officer:

You must come to a close, please.

Photo of Sarah Boyack Sarah Boyack Labour

That is a key issue for us, as MSPs. We have the privilege of speaking straight to the Government, whether we are in government or in opposition, and we can say what the reality is. I hope that the Scottish Government reflects on what we have said today and thinks about that for future budgets.

Photo of Alexander Burnett Alexander Burnett Conservative

Like my colleagues Graham Simpson and Jeremy Balfour, I intend to support the motion. As has been pointed out, it is a technical motion that allows councils to receive their funding. We will support the motion so that the annual process can happen, but only on the basis that it is to show our support for local authorities receiving proper and fair funding.

As has been said, this settlement for our local authorities is not fair, and we will continue to call for better funding for our struggling councils across Scotland.

The Deputy Presiding Officer:

Excuse me a minute, Mr Burnett. Mr Lyle, please do not have your back to the chair.

Photo of Alexander Burnett Alexander Burnett Conservative

My colleague Graham Simpson made a good point when he said that this is not a wellbeing budget for local government. I am not sure how a Scottish Government that spoke about how its budget would ensure the wellbeing of this country thought that reducing local government’s total capital budget in real terms by more than 30 per cent—or nearly £335 million—would benefit anyone’s wellbeing.

Photo of Bob Doris Bob Doris Scottish National Party

Opposition members have consistently called for more money for local government. That is a valid thing to do. However, no Opposition member has put a number on that or said where the money would come from. Will the member be the exception and say where the money would come from, or are we just hearing false promises?

Photo of Alexander Burnett Alexander Burnett Conservative

I think that we have always made the point that, if we focus more on growing the economy and raising revenue, there will be more money to spend. If Scotland had had the same economic growth as the rest of the UK, there would be £0.5 billion more to put into all services, whether in local government or in the national health service.

My colleague Jeremy Balfour made the valuable point that we have a duty to ensure that the next generation and vulnerable people are being cared for. More money from increased income would help that no end, too.

The rest of the debate has been relatively consensual in that most members agree about the severity of the cuts that the order makes. Sarah Boyack highlighted the issue of ring fencing and the fact that decision making on the cuts is being passed from the Scottish Government to councils. Andy Wightman and the Greens may now be wondering whether the £95 million in the order actually exists. The minister has been asked three times in the debate to address that, so I hope that he will be able to do so in his closing remarks.

Willie Rennie made an extremely valuable contribution and, importantly, highlighted how councils in the north-east, such as Aberdeen City Council and Aberdeenshire Council, are further short-changed under the funding formula.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

I am genuinely puzzled as to why the Conservatives support the order. It is not a good order. If we vote against it, all that the Government has to do is bring back a better order and our constituents in the north-east will benefit.

Photo of Alexander Burnett Alexander Burnett Conservative

I take on board the member’s point, but our view is that, if we do not support the order, councils will get nothing.

James Dornan had plenty to say on Kate Forbes and even Sajid Javid but rather less to say about his colleague Derek Mackay, who actually wrote the budget.

Rhoda Grant touched on how the impacts of the order will materialise, from Moray, which will see increases in burial charges, to Falkirk, which will see cuts to Women’s Aid.

John Mason felt that the £95 million satisfies COSLA’s requirements, but, unfortunately, he thinks that everything in this debate has been a choice between local government and the NHS. As I pointed out, if more time was spent in focusing on growing revenues through a growing economy, perhaps we might have the answer.

We will support the motion, but let it be known that we are not happy about doing so. Like councils across the country, we are being pushed into a corner to make this decision.

Photo of Ben Macpherson Ben Macpherson Scottish National Party

I will reflect on a number of the points that have been made. First, however, it is important to reiterate that the order for which I seek parliamentary approval is to guarantee payment of £9.9 billion in revenue support to Scotland’s 32 local authorities, to enable them to provide the people of Scotland with the full range of services that they expect and deserve.

I will address points that have been raised by members. First, Andy Wightman made a reasonable point about a figure of £95 million. I clarify that the figures that have been presented for approval today include that £95 million. The order that was laid previously was withdrawn, then a new order was laid on 4 March. The £95 million is included in schedule 1 of the order—£45 million in revenue support grant and £50 million in non-domestic rates income. I hope that that gives the clarity that was requested.

A number of members mentioned ring fencing. It is worth noting that local authorities have complete autonomy in allocation of more than 91 per cent—£10.4 billion—of the funding that is provided by the Scottish Government, and in allocation of all locally raised income.

Photo of Andy Wightman Andy Wightman Green

I hope that the minister will write to me with clarification, because the figures that are in the order are exactly the same as the figures that were in the settlement letter of 6 February. I have no doubt that the £95 million exists, but will the minister write to me with clarification?

Photo of Ben Macpherson Ben Macpherson Scottish National Party

I give Andy Wightman the undertaking that the money does exist, but I will write as soon as possible after the debate with clarification.

A number of members mentioned the fiscal framework. Officials from the Scottish Government and the Convention of Scottish Local Authorities will meet this week to continue to discuss it. The points that Willie Rennie made—apart from their having been personal—should be seen in the context of the overall local government settlement being distributed in full using the needs-based formula that has been agreed with COSLA. As John Mason rightly pointed out, the Scottish Government is open to considering changes to the formula, but proposals must come through COSLA, which is the right forum for that.

Photo of Ben Macpherson Ben Macpherson Scottish National Party

No, thank you.

It is also important—

The Deputy Presiding Officer:

Excuse me, Mr Macpherson.

Mr Dey, will you stop having private conversations with your back to the chair? Mr Rumbles, will you stop encouraging them all?

Photo of Ben Macpherson Ben Macpherson Scottish National Party

Thank you, Presiding Officer.

Jeremy Balfour’s speech was also slightly personal. He raised a constituent’s enquiry, which is perfectly right and legitimate. On what he said, I point out that the settlement includes on-going funding of £88 million to maintain the pupil to teacher ratio. In 2020-21, the City of Edinburgh Council will have an additional £66.1 million—an 8.8 per cent increase—over what it got in 2019-20. I also subtly point out that I do not need Jeremy Balfour to relay to me the fact that I need to take constituents’ concerns seriously. I have held two open advice surgeries in the past four days—more than the neighbouring Edinburgh Central member has held in four years.

Although today’s order distributes £9.9 billion, that is not the whole story. It does not cover the £709.7 million of specific revenue grants, which includes funding for early learning and childcare, criminal justice, pupil equity funding and additional support for ferries. That represents real money for vital local services, and should not be discounted in making funding comparisons. That funding means that next year the Scottish Government will provide local authorities with a total funding package that is worth £11.4 billion. That will deliver a real-terms increase of 3.9 per cent for vital day-to-day services for all councils.

There will also be further Scottish Government support of almost £580 million to be paid outwith the local government finance settlement. That includes funding for the attainment Scotland fund, the schools for the future programme and the city region deals. It will be paid to local authorities and brings the Scottish Government’s total payment to more than £12 billion.

For context, despite Scotland’s discretionary resource budget allocation being £840 million lower than it was in 2010-11, the Scottish Government has continued to protect Scotland’s local authorities. The 2020-21 settlement will provide local government with an increase of £589.4 million for day-to-day revenue spending for local services. Taken together with the potential to raise council tax by 3 per cent, that means that councils have the potential to spend about an extra £724.4 million in 2020-21.

As Andy Wightman pointed out, Opposition members should note that failure to approve the order will result in Scotland’s local authorities—and, as a consequence, all our communities—being deprived of £589 million in additional Scottish Government investment. I am grateful to the Greens and the Conservatives for being responsible and for stating that they will vote in support of the order.

I encourage Parliament to support the Local Government Finance (Scotland) Order 2020, which will ensure that our local authorities can continue to deliver vital local services, and will finalise the significant funding package to be provided by the Scottish Government.

The Deputy Presiding Officer:

That concludes the debate on the Local Government Finance (Scotland) Order 2020. Before we move on to the next item of business, we will take a moment or so for members to rearrange themselves.