Block Grant Changes (Impact on Local Authority Funding)

Portfolio Question Time – in the Scottish Parliament at on 22 May 2024.

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Photo of Bill Kidd Bill Kidd Scottish National Party

To ask the Scottish Government what impact the reduction in Scotland’s revenue budget as a result of changes to the block grant has had on funding allocations to local authorities in the current financial year. (S6O-03467)

Photo of Shona Robison Shona Robison Scottish National Party

The United Kingdom Government has failed to deliver for Scotland at successive fiscal events. When more support is desperately needed for public services, Scotland’s block grant from the UK Government is less in real terms in 2024-25 than it was in 2022-23.

Despite sustained UK Government cuts, the Scottish Government has increased local government’s share of the budget and the 2024-25 budget delivered record funding of more than £14 billion to councils, which the independent Accounts Commission has recently confirmed represents a real-terms increase and follows real-terms increases in both 2022-23 and 2023-24.

Photo of Bill Kidd Bill Kidd Scottish National Party

The UK Government has cut Scotland’s capital grant by 16.1 per cent. That is the reality that we have to live with. As Labour’s Wes Streeting recently said,

“All roads lead back to Westminster.”

Does the Cabinet secretary agree that it is imperative that all parties in this Parliament accept that reality and come together to speak as one in calling for an end to public service cuts, given the impact that those have on the money allocated to Scotland?

Photo of Shona Robison Shona Robison Scottish National Party

I am pleased that Labour’s Wes Streeting has recognised the reality of the situation. I am sure that his Labour colleagues here will recognise that, whether it comes to health funding or funding for local government, as it impacts the Welsh Labour Government, so it impacts the Scottish Government.

I am sure that, from now on, we will hear a lot in the chamber about Wes Streeting’s realisation of the reality that all roads lead back to Westminster.

Photo of Paul Sweeney Paul Sweeney Labour

I have a practical suggestion. Glasgow City Council has almost £0.5 billion in lender option borrower option—LOBO—loans, which run at rates of about 7 to 9 per cent, which is far higher than the Public Works Loan Board rate. A similar debt renegotiation to that done by Newham London Borough Council could save Glasgow City Council £450 million, or £11 million per year. Could that be an option for the Scottish Government to help broker debt renegotiation, cancellation and amnesties across Scottish local government?

Photo of Shona Robison Shona Robison Scottish National Party

The lending policies and the debt that local authorities have need to be responsible, affordable and sustainable. We engage regularly with councils and the Convention of Scottish Local Authorities to ensure that that is the case.

The fiscal framework that we are taking forward with COSLA will look at all matters that relate to the affordability and sustainability of local government’s finances.

Photo of Liam McArthur Liam McArthur Liberal Democrat

That concludes portfolio questions on finance, Deputy First Minister responsibilities and parliamentary business. There will be a brief pause before we move to the next item of business to allow speakers on the front benches to change.

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