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Chamber and committees

Meeting of the Parliament

Meeting date: Tuesday, December 5, 2023


Topical Question Time

Local Authorities (Risk of Bankruptcy)

To ask the Scottish Government what steps it is taking to protect local authorities from the risk of bankruptcy. (S6T-01678)

The Minister for Local Government Empowerment and Planning (Joe FitzPatrick)

Despite a decade of austerity under the United Kingdom Government, Scottish local government revenue funding is 2.6 per cent higher in real terms than it was in 2013-14. Scotland is facing the most challenging budget since devolution as a result of a UK Government autumn statement that failed to deliver the investment that is needed for Scotland’s public services—an autumn statement that delivered a real-terms cut to vital public services, including NHS England.

This Government will do all that we can within our powers to ensure that public finances are on a sustainable path. Work is on-going with the Convention of Scottish Local Authorities to establish a new fiscal framework through the Verity house agreement, and decisions on the local government budget for next year will be confirmed in the Scottish budget.

Mark Griffin

Yesterday, the Institute for Fiscal Studies challenged the assertion by the Government that local authority funding is increasing in real terms. It—not I—said that the figure being asserted by the Government is

“highly misleading”,

because it compares apples with pizza:

“It compares updated 2023-24 funding (AFTER additions for pay) to original 2022-23”

figures that were announced in December 2021.

A month ago, Shona Robison said that the amount that is needed to fully fund a council tax freeze would be figured out by negotiation. However, neither the Deputy First Minister and Cabinet Secretary for Finance nor the Minister for Community Wealth and Public Finance, has been able to tell me what “fully funded” means. Yesterday, COSLA said that it needs £14.4 billion to stand still—with £300 million for the council tax freeze. Will the councils get that funding to prevent the bankruptcy that is being warned of?

Joe FitzPatrick

The budget process is under way and discussions are on-going with COSLA. We go into this budget round in one of the most difficult and challenging times that we have seen. I know that the Deputy First Minister’s door will be open to suggestions from the Labour Party and the Conservatives as to how Scotland’s pot of moneys can be increased or distributed in a different way. The Deputy First Minister will be keen to hear any suggestions from Mark Griffin.

Mark Griffin

The minister says that the funding settlement is “challenging”, but “challenging” does not cover councils saying that they could go bankrupt. They have already considered sweeping cuts to libraries and leisure services. The Scottish Housing Regulator has warned of “systemic failure” in homelessness services. When councils threaten bankruptcy and people are being failed by repeated cuts, the Government must surely see that local government services are breaking down. That will fall to the Government. What has it set out on what bankruptcy will mean for a local authority? What preparations has it made for that taking place? Would it step in to provide services in that area?

Joe FitzPatrick

Mark Griffin may be getting ahead of things. Local authorities in Scotland have a different framework from those in the rest of the UK. A number of local authorities in England—not just Birmingham and Nottingham city councils, and including those led by all the main English political parties—have gone bust because of UK Government austerity.

In Scotland, however, things have been different. In an interview on “Good Morning Scotland” on 6 September—the day that Birmingham City Council announced that it was going bankrupt—Dr Jonathan Carr-West, chief executive of the Local Government Information Unit, made the point that Scottish councils have not seen the same sustained austerity that English councils have seen over the past 13 years—that we are starting from a safer place. That does not take away the challenges that we all face across public service. We will have to make difficult choices. Are Mr Griffin and his party prepared to make some of those choices? If so, I ask them please to come to speak to us, and let us see what we can do for public service across the country.

Thank you, minister. There are a number of supplementary questions.

Kenneth Gibson (Cunninghame North) (SNP)

Given that the Labour leader, Sir Keir Starmer, has said that he will not

“turn on the spending taps”

if he comes to office, does the minister share my concern that, ultimately, Scottish local authorities will continue to be at the mercy of Westminster’s spending decisions, regardless of which UK party is in power, and that transformational change will come only with the full powers of independence?

Joe FitzPatrick

The challenges that are posed by the current cost of living and climate crises require additional funding. The autumn statement delivered the worst-case scenario for Scotland’s finances. It is deeply worrying that Labour’s leader, Keir Starmer, has indicated that he is likely to follow austerity. That makes it all the clearer that only the full fiscal powers of independence can ensure that the people of Scotland continue to receive the high-quality front-line services that they expect and deserve.

Liz Smith (Mid Scotland and Fife) (Con)

Nonetheless, bankruptcy is something that Scottish councils are talking about. Does the minister understand just how angry councils are that, two months after the First Minister announced that there was going to be a council tax freeze without, apparently, any consultation, we still do not have the details of how that will be funded? That is impacting on councils as they come to crucial decisions.

Joe FitzPatrick

The council tax freeze will help people right across Scotland. It surprises me that the Conservatives do not support the council tax freeze, which is making sure that Scotland continues to be the part of the UK with the lowest council tax. It is really important that, with the cost of living crisis, we do everything within our powers to support hard-pressed families.

We have said that we are speaking to COSLA to work out a fair settlement that meets the criteria for full payment for the council tax freeze. I would have thought that the Conservatives—of all parties—would support the Government in taking that action.

Willie Rennie (North East Fife) (LD)

Today’s programme for international student assessment analysis shows the worst performance ever for Scottish education. Does the minister believe that 16 years of council underfunding has been even partly responsible for that decline?

Joe FitzPatrick

I refer the member to my first answer, which made the point that local government finance in Scotland is 2.6 per cent higher in real terms than it was in 2013-14. The Scottish Government is working hard with our colleagues in COSLA to look at how we can loosen the ring fencing that is applied to that funding, to make sure that councils can make more decisions that suit their local needs better.

The difference between what is happening in Scotland and what is happening in the rest of the UK in terms of local government financing is black and white.

Nuclear Power

2. Edward Mountain (Highlands and Islands) (Con)

To ask the Scottish Government, in light of the declaration by more than 20 countries from four continents at COP28 to triple nuclear energy capacity by 2050, recognising the key role of nuclear energy in reaching net zero, for what reason it is reportedly discounting nuclear power. (S6T-01673)

The Cabinet Secretary for Wellbeing Economy, Fair Work and Energy (Neil Gray)

We are doing that because it is not safe, it is expensive and it is not wanted in Scotland. In addition, it is not needed in Scotland. We have abundant natural energy resources and capital that can contribute and are contributing to our energy mix.

As we are all seeing from experiences elsewhere in the United Kingdom, new nuclear power takes years—if not decades—to become operational, and it will push up household and business energy bills even more. Under the contract awarded by the UK Government to Hinkley Point C, the electricity that will be generated will be priced at £92.50 per megawatt hour.

We know that the Tories care little these days about achieving a pathway to net zero, but the Scottish National Party Government still does. We believe that significant growth in renewables, storage, hydrogen and carbon capture provides the best pathway to net zero for Scotland.

Edward Mountain

At the weekend, we had very cold weather, with not a gust of wind. We relied on nuclear power to keep the lights on in Scotland. Given that, why is Scotland’s Government so hypocritical, being happy to import nuclear power and allowing our jobs and investment in the industry to go abroad?

Neil Gray

The National Grid Electricity System Operator conducted a study of the effect of the earlier-than-expected closure of nuclear generation in Scotland, which concluded that the system would be secure.

On the cost of nuclear power, compared with what I want to see, which is greater investment in pumped hydro storage, we can see that, in August, the UK Government announced a further £341 million investment to be made available to speed preparations for construction at Sizewell C, in addition to the £870 million stake that already exists. I would far rather see a market mechanism for the support for pumped hydro storage. Imagine if we had funding support for pumped hydro storage that was equivalent to that which is given to nuclear power. That would allow us to see power from the glens rather than white elephants from Westminster.

Edward Mountain

I was going to thank the cabinet secretary for that answer, but it was not an answer to the question that I asked. Maybe it was an answer to one that he thought that I had asked in his mind.

I went to Torness the other day and saw a very safe nuclear power station that employed plenty of people in Scotland. I asked them what they would change if they were to redesign the nuclear power station. They said, “Nothing,” because what they do is good for Scotland and keeps jobs in the local economy. Why will the minister not accept that? Why does he believe that safety is the paramount failing of nuclear power, when no one else agrees with that?

Neil Gray

The evidence of the alleged hacking of Sellafield this week and what we have seen from Russia’s invasion of Ukraine point clearly to the worries around safety. We in Scotland are not the only ones who have such concerns: many colleagues in the European Union are either moving away from or continue to oppose new nuclear power.

Mr Mountain spoke of hypocrisy. The announcement comes off the back of the Prime Minister spending as much time in the air in his private jet going to COP28—the 28th United Nations climate change conference of the parties—as he did negotiating a route by which we can address the climate emergency and take advantage of the economic opportunities that we have in Scotland by making a just transition to renewables.

Let us listen to the questions and the answers, please. We have a number of supplementary questions. I will start with Ivan McKee.

Ivan McKee (Glasgow Provan) (SNP)

Because of nuclear power’s high costs and the decades that it takes to build it, notwithstanding concerns about safety and the disposal of waste, it appears that nuclear power would do nothing to address the urgent need to drive down energy prices. Will the cabinet secretary provide further details of any assessment that the Scottish Government has made of the risk of nuclear power pushing bills even higher and say why significant growth in green renewables provides the best route to affordable and clean energy?

Neil Gray

The UK Government has awarded a contract for difference for 35 years for Hinkley Point C at £92.50 per megawatt hour, based on 2012 prices. That is higher than the strike prices of £73 and £64 respectively that have been set for offshore and onshore wind in the next allocation round. For that reason, significant growth in renewables provides the best pathway to net zero for Scotland, as it is a climate-friendly energy system that delivers affordable, resilient and clean energy supplies for our people, businesses and communities.

Of course, it is only with independence that our full energy potential will be realised. Scotland’s massive renewable energy resources can be the bedrock of a newly independent country and, with independence, our economy can be the model for how an economy can transform itself by decarbonising and creating well-paid, secure jobs.

Mark Ruskell (Mid Scotland and Fife) (Green)

Nuclear energy is costly and dangerous, and it will leave a legacy of toxic waste and higher bills for generations to come. The Tories’ epic failure to deliver Hinkley Point to time and budget shows just how unreliable and costly new nuclear is. In contrast, in Scotland, we are getting on with the job by building out new wind and solar energy at pace. Will the cabinet secretary join me in welcoming the new pledge from 118 countries at COP28 to triple their renewable energy capacity? Does he agree that locally sourced renewable energy is the real solution to ending our reliance on climate-wrecking fossil fuels?

Neil Gray

Yes, I do, and Mark Ruskell is absolutely right. The Office for Budget Responsibility has estimated that it could cost as much as £263 billion to manage the legacy of the UK’s nuclear industries. That is quite the burden to pass on to future generations.

The Scottish Government’s position on nuclear power is clear. We do not support the construction of new nuclear power stations in Scotland. We welcome the commitment of so many countries to accelerate the transition to renewables. The Scottish Government’s draft energy strategy and just transition plan sets a high level of ambition for the further deployment of renewables of more than 20GW of additional generation capacity by 2030. That is enough renewable energy to power every house in Scotland for seven years. With the green industrial strategy that we will publish early next year, we will ensure that we take maximum economic advantage of the massive energy potential that we have coming through.

Stephen Kerr (Central Scotland) (Con)

The Scottish Government is anti-science; that is the bottom line. The cabinet secretary would win first prize in a whataboutery competition in The Herald. All that we have heard is whataboutery.

Nuclear energy is a clean source of energy, and it is widely accepted as such, including by the cabinet secretary’s friends in the European Union. My friend Edward Mountain mentioned Torness, where we have the last remaining nuclear power station. What about the jobs, the skill base and the high-income jobs that the nuclear industry brings to Scotland? We are about to have a statement on apprentices. How many apprentices will lose their positions at Torness when the cabinet secretary finally gets his way?

Neil Gray

There were a few questions in there from Mr Kerr.

On the position of our friends and neighbours in the European Union, in April, Germany shut down the last of its three nuclear power plants and joined other member states that have no nuclear power stations and remain opposed to nuclear power, including Austria, Denmark, Ireland, Italy, Estonia, Latvia, Luxembourg, Malta and Portugal. Several other member states, including Spain, have plans to phase out nuclear power. Perhaps that is because of the cost and the risk that it poses.

Actions speak louder than words. The fact that the Prime Minister was willing to spend only around 12 hours at COP28, where there was an opportunity to expand our opportunities—apparently, he and the Foreign Secretary flew in separate private jets—speaks louder than words. Our actions, which include those on the jobs—Mr Kerr appears to be so concerned about jobs—that we will look to harness from our green industrial strategy, demonstrate that we are taking economic advantage of the renewable power that we have in abundance in Scotland.