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Local Government Finance (Coronavirus) (Scotland) Amendment Order 2020 [Draft]

– in the Scottish Parliament on 23rd June 2020.

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Photo of Lewis Macdonald Lewis Macdonald Labour

The next item of business is a debate on motion S5M-22114, in the name of Ben Macpherson, on the Local Government Finance (Coronavirus) (Scotland) Amendment Order 2020.

Photo of Ben Macpherson Ben Macpherson Scottish National Party

The purpose of today’s debate on the local government finance amendment order is to seek Parliament’s approval to update the 2020-21 general revenue grant allocations to individual local authorities as a result of the additional funding to respond to the Covid-19 pandemic.

First, I emphasise the Scottish Government’s gratitude to local authority key workers who have continued to carry out their work during such challenging times, and I thank all local authorities for the continued support that is being provided. I appreciate and recognise the fast pace of change that we all face in this critical and challenging operating environment and the work across local authorities that has gone into dealing with that.

Today’s order seeks Parliament’s approval for the distribution and payment of an additional £257.6 million of Covid-19 funding. The additional funding includes £155 million of United Kingdom Government consequentials; £50 million in hardship funding; £22 million for a Scottish welfare fund top-up; £15 million for the food fund for free school meals; £15 million for the other aspects of the food fund; and £600,000 to enable death registration services to work over weekends and evenings.

It is worth noting that local government will also receive further support from the allocations of £23 million for the Scottish welfare fund top-up, £400,000 for community justice co-ordinators and an additional £27.6 million to extend free school meals over the summer holidays and to provide additional support to the end of September for those who are at risk. Local authorities will also be allocated a share of the £50 million that is available for a council tax reduction scheme and social security benefits top-up that is currently being discussed with the Convention of Scottish Local Authorities.

Moreover, as the Deputy First Minister has just announced, alongside the investment of £30 million to provide laptops for disadvantaged children and young people, the Scottish Government will provide a further £100 million over the next two years to support the return to school and ensure that children get the support that they need. The Scottish Government will continue to work with local government over the summer on the details, through the education recovery group.

The amount of distributable non-domestic rates income remains unchanged from the order that was approved by Parliament on 24 March, and I can confirm that the Scottish Government continues to guarantee each local authority the combined general revenue grant plus non-domestic rates income. That means that any additional loss of non-domestic rates income resulting from the Covid-19 pandemic will be compensated for by the same increase to the general revenue grant, so there will be no detriment to local government.

With regard to today’s order and to give further context, I stress that, although we are only now seeking parliamentary approval for this additional £257.6 million, the Scottish Government has been protecting local authorities’ cash flow by front loading their weekly grant payments. To date, we have provided over £340 million extra, and, by the end of July, that figure will be £455 million. The Scottish Government has also relaxed current guidance on some of the education-specific grants, to allow additional resource to be diverted to the Covid-19 response.

I emphasise that the Scottish Government understands and appreciates the role that local authorities have played in the response to the pandemic and the pressures that it has created. Alongside the measures that I have outlined, the Scottish Government will continue, with local authorities, to press the UK Government for urgent additional funding for our partners in local government, to enable them to adequately deal with the scale of the crisis.

I move,

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

Photo of Graham Simpson Graham Simpson Conservative

This is one of those debates that is not really a debate and in which there is not a great deal to be said.

Photo of Graham Simpson Graham Simpson Conservative

I could sit down, but I will not.

We should all agree to the order. Councils clearly need the money, and that is very straightforward. However, if I sat down, as Jackie Baillie wants me to, that would create a hole rather like the hole that has been left in council finances recently, which is getting bigger and bigger. As far as I can make out, the minister has confirmed that the extra money in the order amounts to just over £257 million, and he detailed what the money is for. Of course, it is very welcome.

However, councils have been doing much of the Government’s work during the pandemic, and that comes at a cost. Council finance chiefs have said that there is still a £145 million gap to be filled, and it is probably more than that now. The Scottish Government will, at some point, have to tell us what it intends to do about that. Will the Scottish Government do as COSLA is doing and turn to the chancellor to bail it out? COSLA has given up on asking Kate Forbes. The only thing that it is asking her to do now is to help it with its appeal to Rishi Sunak, who was pictured in his constituency at the weekend in the reopened bustling high street in Northallerton. We know that, here, we are going to have to wait a little longer for such luxuries.

To be fair, the Treasury has been slow off the mark in passing on the consequentials—the £155 million that we have debated in the Parliament that has not yet come. If there are consequentials, they need to be paid quickly.

We cannot go on with the annual tussle in which the Cabinet Secretary for Finance offers councils nowhere near enough, forcing them to hammer residents in the pocket by increasing the council tax. Even before the coronavirus pandemic began, the Scottish National Party was slashing councils’ capital budgets—it happens every year. Every single year, the block grant increases but councils’ budgets are reduced.

As I said, the debate is fairly straightforward, as the order is simply the mechanism by which councils will receive the funding from Government. We are happy to support the order, but we need councils to be backed for the work that they do without having to fight for that.

Photo of Sarah Boyack Sarah Boyack Labour

However disappointed we might be with today’s proposals, we will not vote against them, because we do not want to do anything to jeopardise the additional funding that is going to local government. Local authorities have already experienced a decade of underfunding, cuts and austerity, and that has held them back in being able to deal with the pandemic.

We have a centralising SNP Government that has been micromanaging in a crisis rather than trusting its local government colleagues to get on with protecting their communities. There could not be a more important issue to address during the pandemic. Our priority is to get funding to local authorities now, so we will support the motion.

Last week, COSLA alerted us to the fact that Scottish local authorities are already £145 million short because of coronavirus-related spend. They have had to transform their services, whether that is in keeping their waste pick-ups and recycling going, tackling homelessness, administering a massive amount of vital grants on behalf of the Scottish Government to local businesses, feeding low-income families or in working with local support agencies to keep our communities safe and well.

Let us be under no illusion: they face a massive crisis. It is a cliff edge. My local authority is already making a £30 million cut for each of the next three years, and it is drawing down £20 million from reserves this year—an action that is viewed by the council as unsustainable—to meet the cost of the coronavirus, which has already been identified as around £85 million. That is my council alone.

Although we welcome the additional funding that the Scottish Government has allocated to date, there needs to be more. Last week, Scottish Labour called for the underspend to go towards funding local authorities, but that was dismissed by SNP ministers. Today, we have had the new announcement on school services that all is well and everything will be working fine by 11 August, and some extra money has been announced. Last week, I heard the announcement of £1 billion for additional investment in education by the UK Government.

The challenge is that the decade of underinvestment that we have had means that a lot of our schools are full. We have already seen staff numbers cut, and the community centres that, last week, John Swinney wanted to be used for blended education and the delivery of food support have already been hit by a loss of income due to the pandemic.

We have seen the health crisis that has been caused by the pandemic, which the country is working through, and the brutal impact of the historic underfunding of care services. Those issues sit there for councils to deal with as they move into the next phase of managing the pandemic. However, we have not yet seen the full impact of the economic recession that has already started—the impact on our town centres as well-known retailers close shops and our hospitality industry struggles to work out how to reopen, and as businesses cannot keep going.

Yesterday, the advisory group on economic recovery published its report “Towards a Robust, Resilient Wellbeing Economy for Scotland”. It highlighted a need for intense collaboration between enterprise bodies and urgent work by local government, Skills Development Scotland and the education sector to prepare now for an increasing demand in the coming months to deliver skills training and retraining opportunities to get people back into work. Again, that is new work for our local authority colleagues to deliver through the pandemic, but it is vital work to target investment in the local needs of our local communities. It all needs to be funded.

We are not celebrating the passing of this order. We acknowledge that more money is being added, but it is not enough. We ask the Scottish Government to fund our local communities; to acknowledge the massive contribution of local government staff that is vital to getting us through this pandemic and building back better; to act now to make sure that we have jobs and training opportunities available for our young people; and to invest in supporting the most vulnerable in our communities, to build a better, fairer and lower-carbon Scotland than the one that we currently have. The order will not do it today; we need more money in the future. I hope that the Scottish Government will listen to the pleas from our local authorities across the country.

Photo of Andy Wightman Andy Wightman Green

I start with a rather boring and pedantic technical question. The motion before us asks

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

However, the order is called the Local Government Finance (Coronavirus) (Scotland) Amendment Order 2020. I do not know whether that matters or is pedantic, but the motion technically asks us to agree to an order that does not exist.

On a question of process, I was frustrated that I was in a committee all morning and there was no information for members about what lies behind the numbers. My researcher asked the Scottish Parliament information centre, but it did not have the information. I understand that normally a report on the order goes to the Delegated Powers and Law Reform Committee and the papers are then available for other committees to scrutinise. I presume that the Local Government and Communities Committee, too, would look at this order.

Photo of Graham Simpson Graham Simpson Conservative

I agree with Andy Wightman. I got the figures that the minister announced by asking councillors in the Convention of Scottish Local Authorities. He is absolutely right that the figures were not made available to MSPs.

Photo of Andy Wightman Andy Wightman Green

I am not suggesting that that is a routine failure. It probably derives from the fact that we have brought the order straight to the chamber, but in a debate on whether we will support an order, I want to know what the numbers are and what they mean. I am pleased that SPICe eventually got me the local government finance report by ministers. I am just warning that, if we do this again, we will need the information in the hands of members a decent 24 or 48 hours beforehand.

Nevertheless, like other parties, the Greens will support the order. We welcome the fact that it has been made and the various funds that it provides for, so we will vote for it.

However, Greens are concerned about the longer term. I think that we will find that local government finances are shot to pieces. Councils face huge challenges—this year, a £250 million shortfall is projected. As I said in the most recent debate that we had on a local government settlement order, I am not comfortable about Parliament voting on how much money local government should receive. Local government should have much more fiscal autonomy in order to raise its own cash. We have centralised control of non-domestic rates and have refused to hand that money back, and we continue to vote to cap the council tax, so local authorities have no freedom—no fiscal autonomy—in those areas. If the UK Government were, in such a manner, to take away similar powers, as the Scottish Parliament and Scottish Government have, ministers here would be jumping up and down with rage. I certainly would be.

It is time to treat local government finance in the mature fashion that it deserves, and to end the culture of councils being dependent on decisions that Parliament takes. Nevertheless, as I said, we will vote for the order.

Photo of Willie Rennie Willie Rennie Liberal Democrat

Liberal Democrats will also support the order. Andy Wightman is right to say that we have not been provided with the details, although we knew broadly the sums of money in question because they have been pre-announced at various stages. In fact, they have been repeatedly pre-announced on numerous occasions. We certainly knew about the figures.

I have genuinely been overwhelmingly impressed by the performance of council officials and staff, who have risen to the challenge during the pandemic. They have managed to get money out the door in a short time and in a very impressive way. They have shown an amazing amount of discretion and have worked all hours of the day and night; it has not been uncommon to receive replies from council officials on a Saturday evening. Therefore, I think that they deserve our appreciation for rising to the challenge, for making a difference and for delivering new services.

We have heard about the efforts that have been made to deliver blended education over the past few weeks. That has not been easy, as I know from my 16-year-old son, who has been going through that process.

Council staff have also delivered grants and other services. Changes have had to be made to existing services, including refuse collection. It seems that an extra truck has had to be provided to follow refuse trucks. Many innovative ideas have been tried in order to ensure that workers are safe. Council staff deserve our appreciation for that work.

The relationship between local government and central Government has been knocked again. That was unnecessary. The £155 million of Barnett consequentials, which forms part of the order that we are debating, should have just been handed over to local government. I think that the questions about auditing and the further delay that was caused were unnecessary, especially when councils had risen to the challenge and had delivered when it really counted. It was a real confidence blow that the Government was not there when local authorities needed it to deliver that finance. In the future, it would be helpful if the Government were to stop the games and antics between it and local government, and instead to have a mature and grown-up relationship, in the way that Andy Wightman outlined. Local government needs to have much more autonomy and control over its own finances, in the way that the Parliament has.

There have been many changes in the way that local government services are delivered. Rough sleeping has largely gone. Delayed discharge has been reduced significantly, although there are many questions about how that was done.

In addition, there has been a dramatic increase in exercise, cycling and various other forms of activity. We need to embed that in the new ways of running local government. I hope that we can learn lessons from the current period, rather than just returning to the old ways, of high levels of delayed discharge and of rough sleeping, but we need the finance to make that happen.

The final challenge is to get local government finance back to a fit and decent state. The reduction in income from charging has been dramatic. The loss of income from leisure centres and theatres has been significant. The Government must recognise that that will be a longer-term problem and so must work in partnership with local government to make sure that that is fixed so that the finances of local government are fit for the future.

We will support the order. I just hope that, in the future, the path to getting there will be an easier one.

The Deputy Presiding Officer:

I call the minister, Ben Macpherson, to wind up the debate.

Photo of Ben Macpherson Ben Macpherson Scottish National Party

I thank members for their contributions. I will come to their points in turn during my concluding remarks.

As I said in my opening remarks, the 2020 local government finance amendment order that is before us seeks parliamentary approval for the additional payment of £257.6 million in revenue support to Scotland’s 32 local authorities. That sum will replace a significant proportion of the front-loaded weekly grant payments that we have provided, and will continue to provide, where necessary. It is important to note that to date we have front loaded over £340 million of general revenue grant payments, and by the end of July the figure will be £455 million.

It should also be noted that the order will confirm our increased financial commitment to local government—despite the UK Government’s position that the current consequentials are estimates that might have to be revisited. That is because of the fact, which Graham Simpson alluded to, that the UK Government has indicated that it will seek savings from UK departments to offset some of the costs of the Covid-19 response, which could result in negative consequentials for the Scottish Government. We continue to seek to engage constructively with the UK Government on that.

For clarity, I note that we and COSLA are working together on our contact with Her Majesty’s Treasury about that extra funding, in order to ensure that the payments for local government are received by the Scottish Government, given that we are paying out the £155 million before we have received that resource from the Treasury.

For further clarity, I note that the distribution formula was not agreed with COSLA until 15 May, so June was the earliest that we could make the payments from the £155 million of Barnett consequentials. For Parliament’s information, I point out that the final instalment will be paid tomorrow, on 24 June.

The pandemic has disrupted lives like nothing before it, and has caused financial hardship and a negative impact on our wellbeing. However, as members would expect, the absolute focus of the Scottish Government, in our partnership with local government, has been to ensure that our communities are supported and protected. I was glad to hear the cross-party support and appreciation for local government in today’s debate, given the efforts that local government has made at this crucial time.

As we move into the recovery phase, we must also, while continuing to protect our communities, focus on how we can recover from the pandemic as quickly and efficiently, but also as safely, as possible.

Of course, the local government finance settlement that the Scottish Government provides to local authorities is only part of the overall funding that we provide to local government and the wider business community. I alluded to that in my opening remarks. As Parliament will be aware, the Scottish Government has also announced a £350 million fund to support our communities, alongside a £2.3 billion package of support for the business community.

Members made some important points during the debate. Sarah Boyack talked about building back better and how we can work with local government on our shared aspirations. For clarity in relation to Andy Wightman’s points, I reassure him that the order and the report were provided to the Scottish Parliament on 3 June and have been through the Delegated Powers and Law Reform Committee.

Willie Rennie made the important point that, as we move forward, we want as much collaboration as possible between, and a shared determination by, local and central Government on our shared challenges. Certainly, from my perspective—I know that my ministerial colleagues share this view—we are determined to work in partnership and collaboration with local government as we, and every community that we serve throughout Scotland, face the current challenges together. It is important that we work together, and it is incumbent on us to do so.

I am delighted that Parliament has expressed its unanimous support during the debate, and I encourage members to unanimously support the Local Government Finance (Coronavirus) (Scotland) Amendment Order 2020. That will demonstrate to our constituents throughout Scotland that we in the Scottish Parliament are united in our efforts to ensure that our communities have the support and protection that they need and fully deserve.