LGIU Scotland Response: 2023 Scottish Budget

Jonathan Carr-West, Chief Executive, LGIU Scotland, said:

“With one in four Scottish councils warning that they may be unable to balance their books next year, today’s budget will not offer much reassurance.

The Verity House Agreement promised early budget engagement, and it promised ‘no surprises.’ This financial settlement does not meet either of those promises or provide councils with the funding they have told us they need.

A council tax freeze funded as though council tax were increased by 5% is equivalent to the rises that councils were planning for this year, but it denies them the increase in their tax base and thus undermines their finances next year and for years to come. The “additional support” promised all appears to be ring fenced to Scottish Government priorities rather than enabling democratically elected councils to make decisions about priorities in their areas. Again, this goes against the Verity House agreement.

Before the budget, every council told us they were planning cuts to services, 97% that they were planning to increase charges, and 89% that they would have to spend their reserves. The funding announced in the settlement will not alleviate the need for these biting budget measures.

The council tax freeze this year will not help residents affected by councils’ inevitable spending cuts and it will not help residents next year, when councils’ spending power is reduced further because their council tax base can’t increase in line with the amount they need.

Our recent survey shows just how strong the concerns are across local government. Only one respondent to our survey said they were confident in the sustainability of council finances. Not a single person said they were happy with the progress that had been made on delivering a sustainable finance system. Senior council figures widely condemned how limited their involvement in the pre-budget process was, and this funding settlement confirms the suspicions that led to only 8% of respondents believing the Scottish Government considers local government in wider policy decisions.

Most worryingly, 8 separate councils (25% of all local authorities) warned us that they could be unable to fund their statutory services – the services they have to provide by law. The funding announced today will be no comfort to these struggling councils, who will now have to make even more difficult choices to make up for their funding shortfall.

For the average resident, this means their life will get more expensive and their services will get worse. For some of the most vulnerable members of society, as councils warned us, it may mean that if nothing changes then there is not enough money to fund the services they rely on.

The funding settlement is not enough for councils to provide the services that millions of people across Scotland rely on. More than that though, it demonstrates that annual funding settlements of this type are not the right way to fund councils or to empower councils to tackle their long-term challenges. Councils should be given more powers over how they raise and spend their own money. This means ring-fencing and directed spending need to be reduced, as agreed at Verity House, and councils need to be free to set their own council tax.”