Meeting of the Parliament 06 February 2014
With the Parliament’s approval of the Scottish Government’s budget yesterday evening, I can confirm that the Scottish Conservatives will support the order, as it addresses the distribution of the £10.5 billion of local government moneys that have already been agreed. However, the debate provides a useful opportunity to consider the broader issues that surround the funding of our local authorities, particularly the transparency of the process.
We face challenging times as a consequence of the necessary action to deal with the deficit and, although welcome signs of strong economic growth are coming through, the Local Government and Regeneration Committee heard much evidence of the financial pressures on all local authorities. Scottish Conservative support was crucial in bringing about the council tax freeze and we have supported its retention to date, as it has proved a lifeline for many hard-pressed and struggling families. That said, a burden has been placed on councils to maintain both the freeze and the front-line services for which they are responsible and, given such circumstances, there is an even greater need for full and frank disclosure of local authority spending priorities. Councils must be accountable to taxpayers.
The committee heard evidence that councils are already balancing the delivery of so-called statutory services and discretionary services. However, the cabinet secretary rightly made the point that, instead of choosing which services to deliver, we should be examining how we deliver them. That said, it is critical that decisions on prioritising services are completely transparent.
In that respect, there is room for improvement. As the body that represents local authorities, COSLA should be leading by example, which is why its lack of engagement with the committee on its budget discussions was so regrettable. We need to have a dialogue with the organisation if we are to get the fullest picture of what is actually happening on the ground.
Indeed, significant shifts are already taking place in councils’ use of fees and charges to fund services. That was not immediately clear from published data, and it took last year’s Accounts Commission for Scotland report to disclose the increasing use of charges as a cash generator. The report revealed that income raised in that way equated to more than half that raised through council tax and was worth £1.3 billion last year. However, the committee found that councils were using net expenditure data, which did not include details on revenue raised from charges and fees. That is neither acceptable nor good practice. We must have clarity on that point and the Government must ensure that councils report fully on where their income is coming from.
We also need transparency if we are to monitor local authority progress in growing the income base and encouraging business. I welcome the projected 8.3 per cent real-terms increase in non-domestic rates income, which has been helped in no small measure by the UK Government setting the pace in support for businesses by capping the increase in business rates at 2 per cent. That move has undoubtedly forced the Scottish Government’s hand; indeed, it raises the question of what could be achieved if the Scottish Government were to commit to more of a business growth agenda.
That brings us to the business rates incentivisation scheme, which I have to say is an incentivisation scheme like no other for the simple fact that it is bereft of any incentives. Mr Swinney regularly tells us that his hands are bound by COSLA and the local authorities, although one suspects that it might be a bond of convenience. Given that the 2012-13 targets are still to be revised and the 2013-14 targets have yet to be published, the goalposts have been not so much shifted as locked away in the changing rooms.
Although we support the order this afternoon, we also seek action from local authorities and the Scottish Government to improve accountability in and transparency of future funding.
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