News round-up: Scottish councils’ negotiating rights, council expenditure & borrowing, pension mandates and Welsh budgeting
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Council revenue expenditure falls
Local authority revenue expenditure fell 1.5% to £94.5bn in 2015-16, according to new figures from the Department for Communities and Local Government. During the year, councils used £400m of their reserves, equivalent to 1.6% of the total. The largest reduction in spend to services is within education – falling from £34.5bn to £34.2bn, driven by schools changing status to academies.
Fall in net borrowing surplus
Local government net borrowing for the financial year to July was estimated to be in surplus by £4.9bn. Figures from the Office for National Statistics show that this was a £1.5bn decrease in surplus on the same period last year. A report by the ONS said: “This decrease in surplus was largely due to decreases in grants received from central government, particularly in April, being partially offset by decreases in expenditure on goods and services.”
Scottish councils demand access to financial negotiations
Four councils are threatening the Scottish Government with legal action if it refuses to grant them negotiating rights on the 2017/18 local government financial settlement. Glasgow, Aberdeen, Renfrewshire and South Lanarkshire have been told that the government will only talk to the Convention of Scottish Local Authorities, which they all left last year. Aberdeen council leader Jenny Laing said that legal action would be “seriously considered”.
Greenwich awards two pension mandates
Royal Borough of Greenwich Pension Fund has awarded two mandates worth £1.3m to two investment managers. The first contract, worth £700,000, is for a multi-asset absolute return pooled fund solution, awarded to Invesco Perpetual. Another £600,000 deal has been awarded to Fidelity for a global emerging markets equity mandate.
Council buys solar farm
Forest Heath District Council says that it will generate up to £700,000 from a new solar farm which it has bought for £14.5m. Using capital reserves, the council has purchased the 12.4MW solar farm near Lakenheath. The council said that even after the capital outlay has been recouped, the council will generate at least £300,000 in the first year, rising to £700,000 by year 10 of the 25-year project.
North Lanarkshire to boost housing spending
North Lanarkshire Council has announced plans to boost its housing programme by adding a further 1,000 homes. Investing an extra £159m will bring the total number of council homes to be built in the next 10 years to 1,800, the council said. Councillor Barry McCulloch, convener of housing and social work services, said: “It means we can deliver a wide range of housing, including housing for older people, disabled people and young people setting up home for the first time.”
Welsh auditor identifies room for improvement
Councils in Wales are strengthening their financial planning processes but have room to improve how savings are identified and delivered, according to a spending watchdog. A Wales Audit Office report said that spending within budgets is proving to be a challenge for some authorities. Auditor general for Wales, Huw Vaughan Thomas, said: “Whilst I am pleased to see councils making progress in strengthening their financial planning, they need to do more in response to the challenging environment and our recommendations to both authorities and Welsh Government will help councils move forward and ensure that services are run as efficiently as possible.”
