Stirling’s Labour Council Leader, Cllr Chris Kane has written a blog on the budget setting process for the coming year.
Update: The Administration budget motion was passed at a meeting of full council on 2nd March. You can watch a recording of the meeting here.
The Labour Administration have tabled a budget motion for consideration by Stirling Council on 2 March.
Given the severe financial pressures facing the council, this has been challenging – emotionally and politically – to draft.
Nobody likes cutting budgets. Nobody likes raising taxes. What we all want are decent local services.
This is a lengthy blog, but the budget is complicated and local services important, so I want to do this properly. I have linked to various documents and other sources throughout this article.
Stirling Council Services
Stirling Council provides hundreds of services. Some are obvious, like running schools and collecting bins. Others less so, like ensuring buildings are constructed safely.
Council provide support for people when they need extra help at every stage of life, from foster care to social care.
Councils are obliged by law to offer ‘statutory’ services, like educating children. Some services, such as economic development, are ‘discretionary’.
Councils provide a delivery mechanism for Scottish and UK Governments. Councils do this because, regardless of what party is in power, collectively we must work together to support our communities. If asked to deliver a national priority, we expect that the money to deliver it comes along with the obligation.
Council Funding Sources
Scottish Local Authorities receive funding for core services through two mechanisms:
Local taxes and charges (20.8% of Stirling’s budget): raised through Council Tax and charging for some of the services we provide.
Local Government Settlement (79.2% of Stirling’s budget): This is an amount given to councils by the Scottish Government. This includes a proportion of all non-domestic rates raised in Scotland.
Included in the local government settlement is ringfenced funding (4.8% of total) to deliver the national priorities referred to above. The money we receive for ringfenced services can only be used to deliver these services. If councils tried to use them for anything else, the Scottish Government would ask for the money back.
What this shows is that we are hugely dependent on the Scottish Government for the funding to deliver our local services.
The budget starting position
Our revised core budget this year following the recent Local Government Settlement is £252,067,000.
Once we factor in inflation, pay rises for staff, increased energy costs, and other pressures totalling £24,342,000, we would need an extra £17,648,000 to do everything the same next year.
For 2023/24 the Scottish Finance Secretary has told us we’re receiving an extra £2M in our ‘local government settlement’ which is 0.95% of an increase from the previous year. £1,864,000 is ‘ringfenced’ to protect policies Scottish ministers were elected on rather than the services local councils are expected to deliver.
That leaves just £136,000 extra for core services. In effect, our ‘pay rise’ from the Scottish Government is 0.05%, not the 7% minimum we require just to stand still.
The financial crisis facing local government is of a magnitude which has never been experienced before.
What Would You Do?
Your options are (1) raise council tax, fees and charges and/or (2), spend less on services.
You could do it by increasing council tax by 32% (1% brings in roughly £550,000). You could cut £17.6 million from schools, libraries, bin collection, parks, community centres, etc.
Hopefully, you try to set your budget with a mixture of both.
Scottish Government contribution
You could, and you should, also ask whether you think we are being short-changed by the SNP/Green Scottish Government.
the Scottish Parliament Information Centre noted in its Local Government Finance Budget 2023/24 update that over the last decade funding to councils has increased by 4.3% but much of it ring fenced for national priorities (see above). In the same period, Scottish Government funding has increased by 8.3%.
CoSLA, the body which represents all 32 Scottish councils, estimates that over one billion pounds of funding we would normally expect to flow to local government has gone towards national priorities.
The SNP Government also try to dictate how we spend some of our core budget. Stirling Council has been told if we reduce teacher numbers by as much as one post, we’ll be punished by a reduction in our local government settlement by around £2 million pounds.
Between 2007 and 2021 Local Authorities were told that if we raised council tax by more than 3%, the Scottish Government would reduce our overall budget by at least the same amount.
Imagine for a minute what the SNP would say if the UK Government tried to exercise similar control over Scottish Government spending?
They would be screaming from the rooftops that it was undemocratic.
Councils Across Scotland
In January all 32 Council Leaders (including 14 SNP and 10 Labour Council Leaders) wrote to the First Minister to say local government was in danger of collapse.
In December, all 32 politically neutral Council Finance Officers wrote to the SNP Finance Secretary to say local government was in danger of collapse.
We are all in agreement that the very survival of council services is at stake.
Here’s what Glasgow’s SNP Council Leader Susan Aitken had to say in a recent newspaper column:
“What we cannot be is treated solely as a delivery vehicle for national priorities at the expense of local needs. Almost the entirety of the £550 million announced for local government in December has to be directed at national priorities. It did little or nothing for Glasgow’s budget gap, protecting the policies ministers were elected on rather than the services local councils are expected to deliver. Our call to remove the restrictions holding us back from setting local priorities and taking local decisions isn’t just about democracy and accountability, it’s about the very survival of these services at this critical time.”
If you don’t like the options we are proposing, that’s absolutely your choice. But our hands are being increasingly tied by the SNP/Green Government in Holyrood who either don’t realise or don’t care about the magnitude of the impact their choices are having on local government and local services.
What are we proposing in Stirling?
The Administration have worked with council officers to identify £6,486,000 in budget reductions.
Some are ‘business as usual’ reductions, where officers are content that they can still deliver a service, albeit a smaller one.
Some of the larger reductions will have profound impacts on the level of service provided. Some services may stop altogether. We have issued a call for voluntary severance to reduce staff numbers.
Every organisation we fund and every service of the council we provide will have less money to spend next year.
You can see the full list in this council report.
We’ve taken the tough decision to propose a council tax increase of 7%. This table shows the increase across the bands.
Despite all of this, we were still £9M short.
The Scottish Government has changed an aspect of Local Government Accounting rules that allows councils to account for the financing of schools built using PFI (Balfron High) and PPP (Stirling, Wallace, Dunblane, McLaren, St Modan’s and Raploch) over the life of the asset (judged at 50 years) rather than the life of the contract (fixed at 25 years) This ‘service concession’ has realised £27,358,000, of which we are using £3,712,000 to help balance this year’s budget.
We will NOT be paying any additional money to the PPP/PFI contractors, and the schools will revert to full ownership of the council once the original 25 year contracts have been fulfilled.
In addition, our earmarked reserve fund is made up of the money allocated to projects in previous budget years which are still ongoing. We’ve trimmed these projects and realised an additional £5,350,000.
The problem with using both the reprofiling and the earmarked reserves is that you can only use that money once, but the budget it is paying for will continue for years, meaning we have to either find another £9M in money or £9M in cuts in 2024/25.
The Positive News
In December, the Labour Administration proposed, and council passed, the following ten priorities:
- Improving the quality of life by providing responsive services that ensure our neighbourhoods are attractive, safe and happy for everyone
- Providing quality services people need.
- Building community capacity and empowering citizens
- Developing a competitive and thriving sustainable local economy
- Improving health and wellbeing outcomes that help our communities thrive
- Embedding digital and physical connectivity and accelerating infrastructure development
- Ensuring our young people have access to the best quality education enabling the best start in life
- Tackling the climate and nature emergency and pursuing our net zero ambition through action
- Investing in wellbeing, including sport, leisure, food & Nutrition, culture and events
- Continuing investment in housing, learning & education to address health and wellbeing inequalities
The service concession has allowed us to propose allocating some monies to assist with these priorities.
We will create a £1.5M economic development fund to help market Stirling as a place to invest and create jobs and to speed up deliver of City Region Deal projects.
We will create a £1.3M fund to develop community capacity and community wealth building principles. By investing in this way, we can help communities and third sector partners who may be able or want to deliver some of the council’s discretionary services and assets that are facing an uncertain future.
We will invest an extra £1M in our roads and pavements.
We will invest £200K to top-up the Scottish Welfare fund to help provide support to people in crisis.
We will also allocate £30K to support development work around public transport.
You can see how we intend to allocate the entire service concession from page 179 of the council agenda.
Despite the previous section, it is my assessment that the survival of Scottish Local Government is hanging in the balance with the current funding arrangements. This year we may be debating whether we can afford summer bedding plants in our parks; next year we’re on course to debate how many of our libraries and community centres can we afford to keep open. The year after that, it will be how do we provide support for our most vulnerable citizens, educate our children, pay our staff, and provide basic local services.
If we are to survive, we need a true partnership model with the Scottish Government with a fair funding settlement that allows us to deliver the services we all rely on. Given that the current SNP led Scottish Government have eviscerated local government funding in a sustained attack going back to 2007, I have no confidence that they are prepared to change course.
if we survive until 2026, Scotland must grasp the opportunity to elect a Labour Scottish Government with a history of partnership working and a great deal more respect for local democracy and local decision making than the SNP.
In the meantime, if all of this worries you, and it sure as hell worries me, then I hope you’ll join me in calling for our local MSPs Evelyn Tweed and Keith Brown to work with councillors of all parties to save our services and save Scottish Local Government from extinction.