Scottish councils are grappling with serious financial challenges, facing budget cuts and rising demands for services, according to a new report.
Edinburgh: Scotland’s councils are in a tough spot, and it’s not looking good. The public finance watchdog has raised some serious concerns about their financial future.
According to the Accounts Commission, councils saw a drop in their total revenue and income for 2023/24. This includes another hit to their funding from the Scottish Government.
They’re really struggling to find savings, and it’s getting harder every year. Many councils had to dip into their reserves just to stay on budget.
In fact, they closed a massive budget gap of £759 million this past year, but it meant making even deeper cuts. The watchdog pointed out that relying on reserves isn’t a long-term solution; it’s just a quick fix.
For 2023/24, the Scottish Government gave councils a total of £13.7 billion in funding. But even with a slight increase in funding for the next year, the financial outlook remains pretty grim.
There’s still a lot of uncertainty, especially with rising national insurance costs that could add another £265 million pressure on councils in 2025/26.
Jo Armstrong, who leads the Accounts Commission, emphasized that councils are facing significant risks and challenges. The demand for services is rising, and inflation isn’t helping either.
Even if funding goes up next year, it doesn’t erase the urgent need for councils to change how they operate. They need to be upfront with communities about the financial hurdles they’re facing.
In their latest report, the Accounts Commission noted a 3.3% drop in total revenue funding compared to the previous year. Twelve out of 29 councils had to use their reserves unexpectedly to manage budget issues.
They stressed that councils need to step up their transformation efforts to ensure they can stay financially stable. Plus, it’s crucial for them to be transparent about how they’re using their reserves and making cuts.
Local communities need to be involved in these discussions more than ever, especially when it comes to how budget decisions will affect local services.
Scottish Conservative finance spokesman Craig Hoy didn’t hold back, saying the report paints a bleak picture. He accused the SNP of starving councils of resources, leading to crumbling public services.
Scottish Labour’s Mark Griffin echoed those sentiments, warning that the SNP can’t ignore the financial timebomb in local government.
On the other hand, a Scottish Government spokesperson highlighted that the upcoming budget will provide record funding for councils, allowing them to meet pay rises for local government workers.
They also mentioned targeted investments in education and climate initiatives. Cosla has been asked for their take on the situation.
