Hansard

I welcome the opportunity to contribute to this important debate, which highlights the crucial role that local government plays in supporting our communities as we continue to deal with the current crisis and, more importantly, with how we can recover as quickly and efficiently as possible. I take the opportunity to thank all those who work in local government in these very difficult and challenging times for their tremendous efforts and for the support that they have given to their communities and others as we have worked through the pandemic.

The delay to the UK budget means that we do not know the total budget that will be available to Scotland next year. We do not yet have confirmation of Barnett consequentials that will flow from changes in UK departmental expenditure or the updated economic and tax forecasts that are needed to finalise the block grant adjustments that impact our Scottish budget.

In coming to our decision to announce the Scottish budget on 28 January, we listened carefully to the representations that COSLA made on behalf of local government about the damaging impact that any further delay would have on the delivery of public services and the practical challenges that it would pose for setting budgets and collecting council tax. Despite those obstacles, the Scottish Government remains firmly focused on achieving the objectives that we share with our local government partners to build a fairer, stronger and greener economy, all of which are firmly anchored in the jointly agreed national performance framework.

The Scottish Government’s commitment to pass on all health consequential funding from the UK Government has provided a degree of protection to our national health service. However, based on figures from SPICe that members will be familiar with, had local government’s share of the Scottish budget in 2013-14 been maintained through to 2020-21, as some have called for, that would have resulted in a cumulative reduction in the health budget of £2.3 billion. Had the same percentage been maintained in 2021-22, health would have lost almost a further £1 billion, which is clearly not realistic, given the current pandemic.

Frankly, in doing the maths for its proposal, the Tory party has not understood how percentages work, which is a point that has been well made by many other members, including Patrick Harvie. Over the period 2013-14 to 2021-22, health would have received a total of £3.3 billion less than it has been allocated. Of course, having a fixed percentage of the Scottish budget for local government could produce other anomalies. For example, on the basis of the proposal that has come from Annie Wells and the Tory party today, in 2014-15 and 2015-16 local government would have received around £500 million less than it did.

I want to focus on some of the tangible benefits that the Scottish Government has delivered for local government in Scotland. The 2020-21 pre-Covid local government finance settlement provided an increase in local government day-to-day spending of £589.4 million, or 5.8 per cent, compared with the previous year. For 2021-22, we have delivered a funding package for local government of £11.6 billion, providing an additional £335.6 million for vital day-to-day services, which is an increase of 3.1 per cent.

Including the additional £275 million that the Cabinet Secretary for Finance announced on 16 February and the £200 million for the lost income scheme, Scotland’s councils will receive £931 million in direct Covid support during 2020-21 through the local government finance settlement, with a further £259 million confirmed for 2021-22. Taken together with the additional fiscal flexibilities that were announced on 8 October, the total value of the Covid-19 support package for councils is £1.8 billion over this year and next.

In addition to those extra resources for councils, we continue to provide them with funding certainty through our non-domestic rates policies, including the enhanced retail, hospitality and leisure relief that the Cabinet Secretary for Finance confirmed on 16 February. The budget delivers an unprecedented reduction in the poundage and almost £1.5 billion-worth of reliefs. Those decisions will continue to protect businesses during Covid-19 and, unlike in England, the Scottish Government guarantees all non-domestic rates income for councils, which the Tories should reflect on when they come here and talk about local government funding.

We should compare and contrast that to how local government in England has fared under the UK Government. Over the period 2013 to 2020, Scottish local authorities enjoyed a cash-terms revenue budget increase of 3.6 per cent while English local authorities faced a cash-terms revenue budget reduction of 14.7 per cent.

Alongside the additional funding and certainty that have been provided through our non-domestic rates policies, as my colleague Aileen Campbell said, we are committed to developing a rules-based framework for local government funding, rather than imposing a blunt inflexible measure such as a fixed-percentage settlement. We will work in partnership with COSLA on that framework, which would be introduced in the next session of Parliament.

The Tories need to be honest about their plans, which would mean billions less for our NHS and arbitrary cuts to local budgets as and when the UK Government resorts to austerity. A fiscal framework for local government is a good idea, which is why we agreed to develop one last year, only for work on that to be delayed by the pandemic. However, any framework must be developed in partnership with local government and, crucially, must never put funding for the NHS at risk.

I assure all members that the Government has worked in partnership with local government, and will continue to do so, to ensure that the people of Scotland continue to receive the lifeline support and services that they expect and deserve as we move towards a healthier, greener and fairer society.