Scotland warns budget delay jeopardises council services
0Scotland’s finance secretary has accused the UK government of being fiscally irresponsible for setting a budget date that makes it “impossible” for the devolved nation to debate its own spending plans meaningfully after the Westminster announcement.
Derek Mackay said that Chancellor Sajid Javid’s decision last week to set out his budget on March 11 meant the Scottish Government would have to set out its 2020/21 arrangements beforehand to allow councils to finalise their spending arrangements by the legal deadline.
3rd LATIF NORTH
March 25th, 2020, Manchester
Council treasury investment & borrowing
Javid’s first budget as chancellor was originally set for 6 November, only for it to be cancelled days later when the general election was called. Last week he announced the new date – which is also the deadline for local government spending plans to be finalised.
The SNP’s Mackay said that Westminster’s failure to schedule an earlier budget was “completely unacceptable” and had shown “a disregard for devolution and a lack of fiscal responsibility” towards Scotland. He set a date of 6 February for Scotland’s budget.
“The timing of the UK budget made it impossible for us to publish our own budget after the UK Government’s without drastically restricting the time for parliamentary scrutiny,” Mackay said.
“In these exceptional circumstances, created by the UK Government, it is vital we give local authorities and public services clarity on their budgets.
“That is why we have made the decision to publish our budget in February which will allow local authorities to set their budgets and council tax before the legal deadline of 11 March.”
Mackay said his budget would contain measures to help tackle the global climate emergency, reduce child poverty and boost the economy.
“We will work closely with the Scottish Parliament to agree a timetable for the Budget Bill to allow for maximum scrutiny while ensuring certainty for Scotland’s vital public services,” he said.
The Confederation of Scottish Local Authorities (COSLA) said this month that the nation’s councils required a combined uplift of just over £1bn in revenue funding for 2020/21 to keep pace with inflation and meet new Scottish Government funding commitments for councils, which totalled £497m.
It said a “fair funding” revenue budget for councils would be £11.08bn for 2020/21, while capital budgets would require a £157m uplift on last year’s £709m.
Spending watchdog the Accounts Commission’s most recent report said Scotland’s 32 councils had faced a real terms decrease in revenue funding from the Scottish Government of 7.6% between 2013/14 and 2018/19.
COSLA resources lead Gail Macgregor said Scotland’s most disadvantaged areas would bear the brunt of a failure to adequately invest in the nation’s future.
“Without increased investment in council budgets, all of our communities will be affected but particularly those that face the challenge of poverty and disadvantage,” she said.
“Vacant shops, empty high streets, the state of our roads, and cuts to public transport mean that every time you leave your house you’ll regrettably see the result of a cut to a council budget.
“I implore the government to realise just how much damage cuts have done to councils and therefore the communities we serve, and for that to be reversed in the local government settlement.”
An HM Treasury spokesperson told Room 151 that officials shared estimates of tax and welfare block grant adjustments with the Scottish Government last month to aid budget preparations.
“We are working with the Scottish government as part of an agreed process to provide the information they need to prepare their budget,” they said.
“The Spending Round provided the biggest day-to-day funding settlement for Scotland in a decade, with the Scottish government’s block grant increasing by £1.2bn in 2020/21.”
The Room151 Weekly Newsletter covers local government treasury and pension investment, funding, development, resources and technical finance. Register here.
The LGPS Quarterly Briefing focuses purely on pension fund investment. Register here.
