CASH-STRAPPED councils are preparing to shoulder a £300 million cut to their funding pot next week when Finance Secretary Derek Mackay announces the Scottish Budget, The Herald can reveal.
Talks are still ongoing between the Scottish Government and local authorities ahead of Thursday’s announcement but a resources spokeswoman for Cosla – the national association of Scottish councils – has been briefing members to prepare for a three per cent budget cut.
It comes after the Cosla insisted that an extra £545m would be needed “to stand still” and maintain the current level of services in the face of rising demand and inflation.
Scottish Labour leader Richard Leonard has stressed that deeper cuts to council funding would exacerbate child deprivation in a “Dickensian” Scotland as he called on Mr Mackay to help local authorities maintain services.
And research by the union Unison found budget cuts are causing Scotland's roads to deteriorate after calculating that funding has been slashed by 21 per cent since 2011/12. The cuts are "severely impacting on local authorities' ability to deliver a high-quality service," the union said.
Cosla’s resources spokeswoman Gail Macgregor confirmed she had briefed council leaders to prepare for a three per cent funding cut during a “verbal discussion” in the “strictest of confidence”, understood to have taken place at the end of last month.
She said the figure was “realistic” working on an “assumption from the information that has been gathered through Cosla,” adding: “But I think that’s a normal budget assumption anyway”.
She said: “We are in the middle of negotiations. To speculate would actually undermine the negotiations.”
Herald View: Scottish council funding must be addressed as worst case scenario looms
Ms Macgregor said Derek Mackay had been “very constructive” but had kept any figures “very close to his chest”, adding: “He has not given any clear indication for where he is going at the moment.”
However, she said a three per cent reduction would put “massive budget pressure” on local authorities, because “to stand still we actually need an extra half a billion pounds”.
She added: “Any percentage cut in local government is going to be difficult, because they have already taken so much out of local government. The reality is we don’t want any cuts at all.”
Ms Macgregor, a Conservative counsellor in Dumfries and Galloway, said councils were “reaching the end” of being able to deal with funding cuts by restructuring and shedding staff, adding: “There’s only so far you can go with that.”
A senior council source said if the funding claim proved accurate, thousands of jobs may be lost as a result.
“That is the biggest deficit Scottish local government has faced in one year and along with the accumulative impact of years of cuts the consequences are going to be horrific,” he claimed.
Herald View: Scottish council funding must be addressed as worst case scenario looms
Last week, the public spending watchdog said there had been a 7.6 per cent fall in Scottish Government funding for councils since 2010/11.
The Accounts Commission said councils were drawing on cash reserves to help fund day-to-day spending – with some set to run out of money within two to three years.
Dave Watson, head of public affairs at Unison, said a £300m cut to council funding would put further pressure on day-to-day-services and could lead to some facilities, such as libraries, closing.
Scottish Labour business manager James Kelly said the cuts would “create a near billion-pound black hole in local budgets”.
He added: "That is a level of austerity that would make a Tory chancellor blush.
“Since 2011 the SNP government in Edinburgh has cut £1.5 billion from local government budgets, directly impacting on schools, housing, social care and other vital local services.
“There’s no muscle or fat left – these cuts will go straight to the bone and it will be the poorest and most vulnerable who will bear the brunt of it.
“The only way to protect local services is to properly use the powers of the Scottish Parliament to tax the richest.”
Murdo Fraser, Scottish Conservative shadow finance secretary, said: “If this is true then councils are right to be worried about how they will provide effective services.
“Cosla’s own figures show that the local authority budget has been already cut by eight per cent since 2010 and further cuts would seriously affect front-line services.”
Herald View: Scottish council funding must be addressed as worst case scenario looms
A Scottish Government spokesman said it would not comment on speculation, but added: “We have treated local government very fairly despite the £213 million cuts to the Scottish Budget from the UK Government in real terms.
“The 2017/18 local government finance settlement, including the increase in council tax and Health and Social Care Integration funding, means that local government have an extra £383 million, or 3.7 per cent, in support for services compared to 2016/17.”
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