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Barnett Consequentials

– in the Scottish Parliament on 5th May 2020.

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Photo of Graham Simpson Graham Simpson Conservative

3. To ask the Scottish Government when it will pass on £155 million in Barnett consequentials to councils. (S5T-02130)

Photo of Kate Forbes Kate Forbes Scottish National Party

The First Minister has already made clear in the chamber, and I am happy to confirm again, that we will pass on those consequentials in full to local government. We took action quickly and have already committed to providing £175.6 million to local government. That includes a £50 million hardship fund, a £45 million Scottish welfare fund top-up, £30 million for a food fund and £50 million for a council tax reduction scheme and social security top-up. That brings the total direct additional funding that we have committed to providing to local authorities to £330.6 million.

In a meeting with me, more than a fortnight ago, the Convention of Scottish Local Authorities agreed to supply details on cost pressures. That information is still awaited. It is absolutely right that that information from councils should inform distribution methodology, to ensure that we support the areas of greatest need.

Photo of Graham Simpson Graham Simpson Conservative

I thank the cabinet secretary for that answer. It is the first time that I have heard her agreeing to give the entire £155 million to councils. She certainly did not want to do that when I questioned her last week.

Let us look at the cost collection exercise that the cabinet secretary is so keen to mention. The exercise started at the beginning of April. Templates were sent to council finance officers on 6 April. That was 12 days before Robert Jenrick’s windfall to English councils was announced, so it has nothing whatsoever to do with the consequentials from that. Does the cabinet secretary not accept that there is no link between the two and that councils should just be given the money—full stop?

Photo of Kate Forbes Kate Forbes Scottish National Party

It would be highly irresponsible to allocate money without carrying out the analysis that is necessary to understanding and determining where local authorities most require it. I agreed in good faith with COSLA, more than a fortnight ago, that we would need to see figures relating to additional pressures.

I accept, and have accepted all along, that local government has done an exceptional job in the response to coronavirus. I also accept that there are cost pressures. However, as Graham Simpson will have seen—and as I have seen—as individual councils identify what their cost pressures are, there is a variety of need. It is important that, in any spending decision, we decide in consultation with COSLA.

It is not for me to determine why that cost collection exercise has taken so long. I await it with interest; I look forward to receiving it; and I look forward to ensuring that local authorities get the funding that they need.

Photo of Graham Simpson Graham Simpson Conservative

As I have already said, the cost collection exercise has nothing whatsoever to do with that £155 million. It sounds as though the cabinet secretary wants to decide for herself how that money is allocated. Perhaps she will confirm whether that is the case. If it is not the case, will she, as she should, use the normal distribution model that councils use—[Interruption.] I am being heckled, but perhaps members should listen. Failing to do that will lead to a war between councils and a battle within COSLA. I am old enough to have seen that happen. We have seen it before. The cabinet secretary would do best to avoid that and to use the normal system, rather than deciding for herself what each council should get.

Photo of Kate Forbes Kate Forbes Scottish National Party

It is within the job description of the Cabinet Secretary for Finance to deliver a balanced budget and to allocate funding. It is for COSLA to inform and influence the normal process that Graham Simpson has identified. His position is that he wants to use the normal distribution methodology; I would rather hear from COSLA how it believes that the funding should be allocated.

Photo of Annabelle Ewing Annabelle Ewing Scottish National Party

The cabinet secretary has set out how much additional funding is being provided to local government. She referred to a figure of £330.6 million. Will she outline the further financial flexibilities that the Scottish Government has provided to local authorities?

Photo of Kate Forbes Kate Forbes Scottish National Party

To support local authorities to respond to coronavirus, we have agreed with COSLA to front load our weekly grant payments by £150 million in May, £100 million in June and £50 million in July, and to keep the cash-flow position under review and make further adjustments if necessary. We have also increased the 2020-21 general revenue grant by £972 million and reduced business rates support by the same amount, reflecting the potential loss of business rates income resulting from our support for businesses. Lastly, we have provided additional flexibility linked to the previously ring-fenced funding for early learning and childcare, the pupil equity fund and the challenge authorities and schools programme funding.

Photo of Sarah Boyack Sarah Boyack Labour

The cabinet secretary said last week that local authorities should use their reserves while she decides how much support to provide them to enable them to deliver new services and support our communities to cope with significant reductions in their incomes. In her previous answer, the cabinet secretary did not appear to get the fact that we are in the middle of a pandemic—we are not in a normal budget round. Does she accept why COSLA and our council colleagues are increasingly unhappy with the lack of support that they have received to date and that she is micromanaging? Are our councils not equipped to carry out the necessary analysis to make the best use of those resources for our constituents across Scotland?

Photo of Kate Forbes Kate Forbes Scottish National Party

It is because we are in the middle of a pandemic that we moved quickly to provide local authorities with funding to begin with, before there were those consequentials from the UK Government; I have already mentioned the £175.6 million that we have provided to local authorities.

This issue appears to me to be a storm in a teacup. My letter made clear that I was awaiting confirmation from local authorities on funding in terms of their need; that was an agreed position with COSLA two weeks ago. I have committed once again, off the back of what the First Minister said a few weeks ago in the chamber, that we will pass on that funding in full, and I believe that COSLA and local authorities, and not just members in the chamber, should inform and influence how that money is allocated.