Local authorities are being forced to take cash from their reserves to combat a funding drop of 7.6% in real terms since the 2013-14 financial year, according to a new report.
The Accounts Commission found Scottish Government funding to councils has dropped more significantly than other services, which have seen a 0.4% drop in real terms since since 2013-14.
The gap between other areas and local authorities reduced from 2017-18 to 2018-19 but there was still a difference of 7.2%.
To battle the funding gaps, more authorities are being forced to dip into reserves when savings are not able to be made.
Over the last three years, 23 of Scotland’s 32 local authorities have drawn from their reserves, with a net reduction in the amount held by councils of £45 million at the end of last year, the second year in a row when council savings have seen a net reduction.
READ MORE: Local authority funding crisis: how councils are fighting the cuts
For next year, the funding gap is expected to stand at 3% – around £500 million – and will be consistent with the gap from 2018-19, increasing pressure on councils dealing with an already growing older population in need of services.
The report also raised concerns over the state of Scotland’s Integration Joint Boards (IJBs), bodies put in place to bring together health and social care, with the chairman of the Accounts Commission saying the position of the boards is becoming “increasingly unsustainable”.
According to the report, IJBs struggled to balance their budgets, with 19 of the 30 relying on extra funding from partners to ensure they would not be left with a deficit.
Without the extra cash injection, the boards would have lost £58 million last year.
The Accounts Commission also said the pace of integration was too slow, something that may be rooted in the inconsistency wrought by a third of senior staff at IJBs in the last year being replaced.
Graham Sharp, the chairman of the Accounts Commission, said: “We urgently need much faster progress in the reform of our health and social care services.
“The current position is increasingly unsustainable.
“There’s a need for councils to continue rethinking how they deliver services, as well as look at ways to increase their income.
“For some councils in Scotland, finding ways to do this is getting more and more difficult as their current income doesn’t match demand.”
Scottish Tory local government spokesman Alexander Stewart accused the Scottish Government of “cutting local authority funding to the bone”.
“Under the SNP, councils are increasingly raiding their rainy-day fund just to keep things going,” he said.
READ MORE: Council funding for pupils falls by hundreds of pounds
“That’s unsustainable and before long these reserves built up over decades will be gone.
“That’s what happens when you have an SNP Government which has cut local authority funding to the bone.”
He added: “The Nationalists need to start getting their priorities right.
“They’ve been in charge of local government for more than 12 years and are entirely responsible for this terrible state of affairs.”
Gail Macgregor, the resources spokeswoman for local authority body Cosla, said councils had “borne the brunt” of Government cuts, adding: “We make key financial decisions for our communities every day.
“How can a council do all it can to tackle child poverty, combat the climate crisis, improve well-being and foster inclusive economic growth if our hands are tied by financial constraint?
“This cannot continue. For the benefit of communities across Scotland, the Scottish Government must make the choice to invest in Local Government.
“We need fair funding for councils and a return to local democratic decision-making as quickly as possible.”
A Scottish Government spokesman said: “Despite further UK Government cuts to the Scottish budget, we have ensured our partners in local government receive a fair funding settlement, delivering a funding package of £11.2 billion for all local authorities in 2019-20 – a real-terms increase of more than £310 million, or 2.9%.
“Contrary to the Accounts Commission’s claim that local authority revenue funding reduced by 0.7% in real terms, Scottish Government revenue funding in 2018-19 increased by 0.3% in real terms compared with 2017-18.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel