Funding will help but won’t stop more cuts

Comhairle nan Eilean Siar has said that a new package of ‘financial flexibilities and extra funding for councils’ announced last week by the Scottish Government aimed at addressing the financial pressures on local authorities as a result of the coronavirus pandemic, will give greater flexibility to its budgets but will not remove the need for the authority to make savings.
The funding package won't necessarily stop further budget cutsThe funding package won't necessarily stop further budget cuts
The funding package won't necessarily stop further budget cuts

Last week, the Scottish Government announced the package of measures for Scotland’s local councils which, they say, could be worth up to £750 million.

The moves follows an agreement between the Scottish Government and the joint organisation of Scotland’s local authorities, COSLA.

Under the deal, councils will have additional spending powers, which the government says could be worth around £600m.

The government will  also establish a ‘Lost Income Scheme’ to help compensate councils and council trusts for lost sales, fees and charges from services such as sports centres and parking charges, which could be worth an estimated £90m.

The new package will also enable local authorities to use capital receipts and other measures such as debt repayment holidays and the deferral of loan fund repayments to assist with their funding pressures.

Announcing the package last week, Finance Secretary, Kate Forbes, said:  “Working in partnership with COSLA, the Scottish Government has delivered on our commitment to support councils across Scotland with a game-changing package of financial flexibilities, giving them the powers they need to make informed decisions about spending at a local level.”

But, in terms of the impact of the new package of measures on the Comhairle’s need to make savings of £6.6m over the next two financial years, and the ongoing community consultations being held in the Western Isles on a raft of service redesign and savings proposals, a spokesperson for Comhairle nan Eilean Siar said: “The Comhairle welcomes the flexibilities available, but this funding is intended to address COVID-19 pressures and not budget shortfalls.

“The share of the £90m income loss scheme will help restore balances and provide more flexibility for the Comhairle but does not remove the need to make savings.

“In relation to the other options,” the Comhairle’s spokesperson added, “the Comhairle has very limited capital receipts and faces pressure on its capital budgets, so this is not something open to the Comhairle.

“We will look carefully at the option to defer debt repayment but this will increase the burden in future years and is not something the Comhairle would wish to do unless essential.”

COSLA’s Resources Spokesperson Cllr Gail Macgregor said: “We welcome this substantial package of measures from which councils can choose, depending on local circumstances.

“Responding to COVID-19 whilst continuing to deliver essential, everyday services has put extreme pressure on finances this year.

“The pandemic has also meant substantial losses of income across a range of council services including leisure, sport, culture, and planning.

“Balancing budgets will be a real challenge and this has been fully recognised by Scottish Government who we have worked with constructively and positively.”