SCOTTISH councils are facing a £767 million bill to tackle the Covid-19 crisis amid a warning the Government has only covered up to two thirds of the pressure.

The analysis by the Accounts Commission comes two days before Kate Forbes delivers her draft Budget at Holyrood – with the umbrella organisation for Scottish local authorities, Cosla, calling for “fair funding” to mitigate the “unprecedented strain” on budgets.

In the new study, the Accounts Commission said that funding handed over to councils from the Scottish Government increased by £500 million in 2019/20, but warned that almost half of the uplift “was to fund the expansion in early learning and childcare”, an SNP commitment.

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The stark report highlights that the financial cost of Covid-19 on councils in the current financial year “is estimated to be £767 million”, adding that more than half of that amount is due to lost income such as parking revenue and leisure services being forced to close.

It adds that the Scottish Government funding announced by November last year only “meets 60 to 70 per cent of the cost pressures identified by councils”.

The report adds that over the last six years, funding for councils from ministers fell by 4.7 per cent – compared to just 0.8 per cent for “other Scottish Government revenue funding”.

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Cosla’s resources spokesperson, Gail Macgregor, said: “This report lays out why we need fair funding for local government in Thursday’s Budget. The trend of recent settlements for local government needs to change because on top of existing pressures, the Covid pandemic – as the Accounts Commission report recognises - has placed unprecedented strain on the finances of Scotland’s councils this year.

“Sustaining this lifeline support is placing extreme pressure on already strained budgets and without fair funding for local government this year, the consequences for the most vulnerable in our communities would be unacceptable.

“That is why we need fair funding for 2021/22 that respects our communities. Without this, there will be further cuts to services, reductions in spending locally, increases in the inequalities exposed by the pandemic and a much slower recovery.”

Scottish Conservative local government spokesperson, Annie Wells, said: “The Covid pandemic has only heightened the pressure on councils and the SNP must use this weeks’ budget to give them a fair funding deal once and for all.

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“The Scottish Conservatives have called for a fair funding deal for councils to be enshrined into law and ministers should urgently heed these calls.”

Scottish Labour local government spokesperson, Sarah Boyack, added: “Make no mistake, Scotland’s local authorities are on their knees. With the pandemic hitting councils in the pocket to the tune of £767 million, it is simply unthinkable that the SNP continues on its course of underfunding local government.

“Communities across Scotland are paying the price of nearly a decade and a half of brutal cuts to councils. At the coming budget, Scottish Labour will fight for a fair deal for councils and the communities that they serve.”

 A Scottish Government spokesperson said: “When the 2019-20 local government finance settlement was set, the Scottish Government’s resource budget from the UK Government – excluding health – was 7.8 per cent lower in real terms compared to 2013-14.

“The Scottish Government remains committed to passing on every penny of additional health resource from the UK Government which has a direct impact on all other areas of the Scottish Budget.

“Despite a decade of UK Government austerity measures, Scotland’s local authorities have enjoyed a cash-terms revenue budget increase of 3.6 per cent over the period 2013-20. English local authorities have faced a cash-terms revenue budget reduction of 14.7 per cent over the same period, equivalent to a real-terms reduction of 22.8 per cent.

“The pre-Covid-19 2020-21 settlement of £11.4 billion, provided a real terms increase in local government day to day spending for local revenue service’s 3.9 per cent.”