Local Government Finance (Scotland) Order 2008
The next item of business is a debate on motion S3M-1256, in the name of John Swinney, on the Local Government Finance (Scotland) Order 2008.
The overall funding to local authorities for 2008-09 was agreed as part of the Budget (Scotland) Bill yesterday. This motion seeks Parliament's agreement to the detail of the allocation of revenue funding to individual authorities as set out in the Local Government Finance (Scotland) Order 2008.
The order provides for the distribution of more than £9.2 billion in general revenue grant for local authorities in 2008-09 and seeks agreement for payment of an additional £128.3 million for 2007-08 to support a range of specific commitments that are delivered in partnership through local authorities. I will return to the detail shortly.
Yesterday's agreement of the Government's budget plans for a more successful Scotland signals a new, joined-up approach to public spending in Scotland. It means that the money that we spend will work better, because it will work to deliver on clear national outcomes, across our strategic objectives and in support of the Administration's core purpose. We have been clear that the Government is spending to improve, and we are investing more than ever in local authorities, as we recognise the key role that they play in delivering our strategic objectives.
If this is a generous settlement for local authorities, why is the cabinet secretary's party colleague in Aberdeen, Councillor Kirsty West, saying that her authority is closing schools because the council has insufficient funding from the Government?
The Government is giving record sums of money to local authorities, each of which must take appropriate decisions. The Government will not micromanage local authorities in the inefficient fashion of the previous Administration; we will take wise decisions to financially support local authorities properly, to allow them discretion to take the required decisions and to work within the framework of the historic concordat that structures the relationships between the national Scottish Government and local government in all our communities.
Since the Government's spending review announcement in November and the publication of our concordat, we have been working positively and constructively with our local government partners. It gives me great pleasure to update the Parliament today on some of the progress that we have made already. We have heard positive recommendations from all parties on the benefits of the concordat. The Cabinet Secretary for Education and Lifelong Learning and I have already met the presidential team of the Convention of Scottish Local Authorities to maintain momentum on the work of implementing the concordat. We are well on the way to putting in place single outcome agreements with each council. I expect them to be in order and in place by 1 April 2008. We have been working closely with COSLA to ensure that the Local Government Finance (Scotland) Order 2008, for which we ask approval today, is the fairest and best package that we can deliver for local government in such a tight financial context.
We are moving forward together to make this a more successful Scotland. We are entrusting local authorities to develop approaches that are right for their local areas. Together, we have created a new opportunity to develop public services that fully and effectively meet the needs of people in their local communities.
In December, I announced the indicative resource allocations for local government, which began the formal consultation period with COSLA on the terms of the settlement. I can confirm today that the final allocations confirmed in the order have been agreed with COSLA.
Over Christmas, some unfounded allegations were made in some quarters about disputes between central Government and local government over the allocation of funding. Desperate claims had been made that the concordat between central Government and local government was unravelling, but nothing could be further from the truth. I assure Parliament today that the discussions that we have had, and will continue to have, with COSLA are a reflection of how well this Government chooses to work with local government. We listened to local authorities' comments and worked with them to ensure that the resources provided in the order are what is fair and best for them.
I am able to confirm that local government will benefit from a package of provision amounting to £11.2 billion in 2008-09, £11.6 billion in the subsequent year and £12 billion in 2010-11. Total funding over the three-year period will amount to more than £34.8 billion and by 2010-11 funding from this Government will have increased by 12.9 per cent from the equivalent amount in 2007-08.
The total provision includes the general revenue funding and the distribution of non-domestic-rate income, which are set out in the order, along with specific grant funding and other funding where distribution has still to be confirmed, as well as the sums set aside to deliver a council tax freeze.
As I announced yesterday, we considered the Finance Committee's recommendation on the budget to increase funding for police recruitment. Those revisions will be deployed through the police central grant, but there must be close involvement for local authorities, through police boards, in achieving the Government's objectives—and the Parliament's objectives—in increasing police recruitment.
We also listened to the Finance Committee's recommendation to accelerate the business rates reductions for small businesses. The introduction of the bonus scheme will be brought forward and fully implemented a year earlier, by 2009-10, and the phased rollout planned in 2008-09 will be accelerated from 50 per cent to 80 per cent for our smallest businesses. That will provide a direct competitive contribution to the growth of small businesses in Scotland and the vitality of our towns, villages and cities.
The allocations set out in the order as part of the total funding package that this Government will make available to local government will provide the funding required to improve education and the learning experience for our children and young people, expand pre-school provision, reduce class sizes, extend free school meals and give more pupils the chance to experience vocational training. It will also allow councils to provide allowances to kinship carers, increase standard payments levels for free personal care and deliver more respite weeks to support carers. It also funds the essential local services, in a general sense, on which we all depend.
The total funding package also provides support for capital funding to local authorities. As I set out in December, that support will rise to £975 million in 2008-09—an increase of £115 million, which is 13.3 per cent in one financial year. Over the three- year spending review period 2008 to 2011, the total support for capital investment will amount to almost £3 billion for local authorities. That substantial increase gives local authorities the opportunity to increase their investment in their assets, which are central to the delivery of quality local public services such as schools, houses, flood prevention and roads.
I have also announced our proposed allocations to support local authorities to freeze their council tax rates at 2007-08 rates. I am delighted to know that so many councils have already agreed to do so and I look forward to seeing all councils accept our support to lessen the burden on the Scottish public. Some £70 million has been set aside to cover this pressure for 2008-09 and once councils have set their rates I will bring a revised order to Parliament to allow that support to be issued.
I realise that I cannot give a speech on local government finance without mentioning ring fencing, which has featured so significantly in the debate around the budget. I welcome the Finance Committee's broad support, in its report on the budget, for reducing ring fencing and local authorities' appreciation that less ring fencing means more flexibility and freedom for them in allocating their resources.
I understand the concern about a relaxation in ring fencing, but the Government is putting in place a different arrangement to ensure that we have focus in the work we undertake with local authorities and can assess the contribution that is made by the resources we allocate to local government. That new approach is founded on national outcomes and indicators, and the implementation of the concordat will be central to that approach.
I should also mention the proposal to give the city of Edinburgh capital city status. That will be dealt with outwith the local government settlement, and will inform my contribution to the budget in 2009-10.
As part of its consideration of the order, the Parliament is asked to agree sums of money that are additional to those approved in the 2007 order for funding in 2007-08. Because of additional spending commitments that councils have received over the past year, we are, in this order, seeking Parliament's approval to make available £128.3 million in revenue support additional to that approved in February last year. I am sure that that significant package of additional support for local government will be welcomed by local authorities and, more important, by people in communities throughout Scotland who will benefit from the increased services that the funding will provide.
The additional sums include £14.5 million for pre-school education, £33 million for community safety partnerships, £29.7 million for school public-private partnership projects and £15 million for helping parents in disadvantaged areas. The full list of redeterminations to the 2007-08 order is set out in the report to this order.
Before we move to the debate, I will summarise what I am putting before Parliament. The order sets out a record increase in funding for local authorities to allow them to deliver services to their local communities and to allow us to work together with councils to deliver on our national outcomes and commitments for the people of Scotland.
By agreeing this order, we put in place the mechanism to fund local authorities to serve their public as they are elected to serve them. Without this order, we will be unable to give local authorities their increase in funding, which means that they will need to increase dramatically the burdens on local taxpayers.
I am encouraged by the way in which local government has taken on this seismic shift in its relationship with Government. It has shown its willingness to work with us and to keep up the momentum on the Government's measures. That is why the Government is committed to continuing to work and engage with our local government partners.
This order is an opportunity to ensure that we work together to create a more successful Scotland.
I move,
That the Parliament agrees that the Local Government Finance (Scotland) Order 2008 be approved.
Labour has a proud record of working in partnership with our local government colleagues. After all, it introduced three-year budget settlements, ended the two-tier workforce in local government, replaced compulsory competitive tendering with best value and introduced the power of well-being into community planning, which places our local authorities at the heart of local communities. Indeed, since devolution, under Labour, local government funding increased by 55 per cent.
Much has been said about our relationship with local government. I believe that our direction of travel remains strong and appropriate because we want to protect and deliver for the most needy people in communities. We will continue to do so throughout this parliamentary session.
The minister has quite rightly sought to present the settlement in the best possible light, but we need to get behind the rhetoric, examine the context of the settlement and look closely at comments that have been made about the budget. I am keeping a count of how many times we hear "historic concordat" this afternoon. It has been presented as a fantastic deal for local authorities, but local government itself has simply said that it is the best deal available.
Although Pat Watters said:
"the concordat was probably the best position we could achieve in negotiations",
he also pointed out:
"We told the Government that we would be able to cope if we got closer to £11.5 billion."
Of course, they got £11.2 billion.
He went on to say:
"The further we are from that figure, the more likely we are to hit"
difficulties
"in the three years."
Councillor Watters also said:
"we do not think that it is the best financial settlement but in the circumstances … we believe that it is the best that we could have negotiated"
The cabinet secretary mentioned the role of the Local Government and Communities Committee. In evidence to that very committee, Martin Booth, the head of finance for COSLA, said that the settlement
"is a lower percentage increase than previous settlements since devolution."—[Official Report, Local Government and Communities Committee, 5 December 2007; c 331-35.]
When asked whether the settlement was below average, Mr Booth replied, "Compared with previous settlements".
In effect, when it is combined with funding for the council tax freeze—which in itself raises very important questions about the way in which the figures have been calculated and presented—this funding settlement represents a centralisation in financial control over local government. Local government is now even more dependent on central Government grants, and the imbalance of funds raised locally and nationally has shifted towards central Government.
The new centralisation is fraught with difficulties at a local level. Indeed, we are already beginning to see serious cuts. Richard Baker has already raised the example of school closures in Aberdeen, and at First Minister's question time today we heard about some of the decisions that are being taken in education: either new schools are not being opened when they should be, or existing schools are being closed.
People have said that ring fencing is a bureaucratic process, but I genuinely worry about the army of civil servants and local government officials who will have to monitor the single outcome agreements. First they will have to define them, then they will have to monitor and review them to ensure that they are being met. They will also be audited by central Government. We have a serious concern about the weight of bureaucracy that will cover the single outcome agreements.
We should not forget that the settlement is the worst since devolution, with growth of only 1.5 per cent for spending on services over the three-year cycle, compared with 5.1 per cent growth in the budget as a whole. Under Labour, the average increase was 4.9 per cent in real terms, which allowed council tax increases of 1.8 per cent over the same period.
There has been a lot of talk about council tax levels. The Scottish band D level fell below the English average for the first time in 2002-03, and it is now £1,149 in Scotland compared with £1,321 in England. We have to put where we are in context: let us not forget that local government will face sizeable challenges.
There is a black hole in the funding settlement. COSLA estimates that the money available to fund service growth is £175 million over the three years, but £55 million of that has been top-sliced for police recruitment. All the commitments that are set out in the concordat are drawn from the Scottish National Party manifesto and were costed by the SNP at £848 million. Having done some work with local authorities, we believe that that figure should be about £1 billion.
The Scottish Government has failed to cost any of the commitments during the budget process. It has added up a substantial amount of money and tried to present it as enough to deliver the manifesto commitments, but we all know—from debates in this chamber, discussions with local government and ministerial responses on, for instance, class sizes—that the money to meet the pledges simply does not exist.
If we look at this year's settlement and discount from it inflation, the money for the council tax freeze and the growth in capital spend, we see that councils are left with £14 million of growth money. That is £2.80 for each member of the public.
So what will councils achieve? How will they balance their books? How, for instance, will they restore the balances considering the £40 million that was drawn down last year to restrain council tax levels? Mr Swinney says that they will do that through increased flexibility in managing savings of £200 million. When that policy was presented, our assumption was that it would be about allowing councils to invest in front-line services rather than making up for gaps in the past.
There are questions about the desire of Government around the efficiencies. When I was Minister for Finance and Public Services, I was aware of the limitations in cash-releasing savings. Our cash target was 0.7 per cent. Under Mr Swinney and the SNP, it is 2 per cent. We have access to some of the papers that are going before councils, and we are seeing not cash efficiencies but cuts in public services. That is the reality of the budget settlement for our local authorities throughout Scotland.
The efficiency targets are based on some spurious logic. For instance, how can police forces save 2 per cent per annum on costs when staff costs account for 85 per cent of their budget and they are having to retain and increase the number of police officers? That simply does not add up. If we add police pensions into that dilemma, we see the potential for the budget to fall into crisis. We are told by the police that there will be a £17 million shortfall in 2008-09, a £52 million shortfall in 2009-10 and a further £35 million shortfall in 2010-11. That is a grand total of £104 million in that budget.
Interestingly, the police were also able to tell us, in a letter to Pauline McNeill, that their grant-aided expenditure allocations for pensions are set at £181 million for each of the next three years. How can police officers have access to GAE information that was denied the Parliament? I found that admission interesting, and I believe that we have been denied the figures because, if we had them, we would put the numbers together and realise that the budget is not all that it seems—it is not the perfect world that Mr Swinney presents.
In some local authorities, services are under pressure. Argyll and Bute Council already spends 6 per cent more than GAE and says in its papers on the budget that
"a case is being made to try and secure additional funding for police pension costs",
but even with the highest increase, the council's funding will fall short by £5.75 million in 2008-09 and that figure will rise to £8 million in 2010-11—which is after sizeable efficiency savings of £2.2 million.
We will have more to say throughout the debate. At one level, the budget appears to allow services in communities to develop, to expand and to be invested in, but that is not the case everywhere. Many examples will be given, but I raise again what is happening here in Edinburgh, where the Evening News says, "City Charities Face £870K Cash Grab" from the council.
The budget presents challenges. I worry about our communities, about social justice and about our local authorities' ability to deliver on a budget that is tight and is not what the Cabinet Secretary for Finance and Sustainable Growth presents.
Andy Kerr's speech was measured and thoughtful. If he had delivered yesterday a speech on the shortcomings of the local government settlement and part of the budget, he might have secured more than one vote against the budget. However, we have moved on from yesterday's phase, which was all about heat, and I hope that today's debate will provide more light.
Speak for yourself.
Indeed.
The only aspect of the local government settlement that will capture the public's imagination is the council tax freeze, which is one of the main aspects of the budget settlement that has penetrated the public's consciousness. There are many arguments about the freeze, but I will nail some of the spurious arguments that have been used against it, principal among which is that it will involve horrific distributional sleight of hand by which the rich will gain and the poor will not. All that a council tax freeze will do is hold back growth in the tax.
I ask Derek Brownlee to contemplate this. Someone who lives in a big house in Morningside and pays a high council tax level will receive a huge freeze—
Alistair Darling.
Okay, it could be McLetchie—David, sorry.
We can contrast that person with someone who lives in Pilton and who already does not pay council tax because of their income level. That is the difference that we are pointing out.
I ask Labour members to reflect on this. One of Labour's proposals in the budget process was to abolish water rates for pensioners. I presume that the same effect is true of that policy—would it not benefit people who pay more in water rates more than those who pay less? Is that not exactly the same distributional analysis issue? Where is the logic in making a great stand against the council tax freeze while making a proposal that would operate in the same way, albeit with a different set of charges, although the numbers for that proposal did not add up? The Centre for Public Policy for Regions did a good analysis of all the manifestos at the time of the election—
Steady there.
Tavish Scott was not as keen on the analysis of his party's manifesto—and I can understand why.
I recall that the Labour Party promised a 50 per cent reduction in water rates for pensioners, which the CPPR said would cost £75 million. If members check annex A to the Finance Committee's stage 2 report on the budget, they will see Tom McCabe's proposal to abolish water rates for pensioners, which was costed at £75 million. I presume that that is why Andy Kerr, not Tom McCabe, is to chair a Holyrood Communications conference on Government statistics in the next month.
When we are talking about the council tax freeze, it is important to remember that holding down the council tax is an important measure. The simple fact that people who pay more council tax would benefit more in cash terms is not a reason to oppose the freeze. Of course, the Labour Party has the opportunity to bring the right-wing alliance to its knees and to stop the council tax freeze, because it can always vote against the second local government finance order. Labour can stop that in its tracks. Alternatively, all Labour councillors could reject the inducements in the historic concordat and impose council tax rises the length and breadth of the country, if they chose to.
I want to move on to more fundamental questions about how we chart a course through scrutiny for local government over the next few years. Whatever view one takes on the concordat, things are changing and the scrutiny methods will have to change, too. I am encouraged by the fact that we shall see single outcome agreements by the beginning of April.
We need to get the scrutiny mechanisms for single outcome agreements spot on. The Finance Committee did not, for other reasons, pay a great amount of attention to that in its report on the budget, but it made a number of recommendations on the matter. It is fair to say that the Government's response to some of those recommendations is not particularly promising. For example, we recommended that local authorities should report on major changes in patterns of expenditure. The Government's response was:
"We do not consider this type of reporting to be appropriate and feel it is more important that our focus remains on securing better outcomes".
There is certainly a strong case for focusing on the securing of better outcomes, but it would be interesting to know how those outcomes related to the resources that were put in.
As a Parliament and through the parliamentary committees, we can discuss how we can get the scrutiny mechanisms right. Nevertheless, we need to focus carefully on the following. Local government is asked to carry out certain functions, some of which arise out of statute. Authorities have no choice but to deliver those services. Some of those functions arise from the outcome agreements and will, I presume, be national and common to all councils. Some of those functions will, I presume, relate to local actions that are specific to individual councils. On top of that, there will be other elements that are entirely discretionary. At the very least, in considering how we scrutinise and how local government reports, it would be helpful if we could understand, on an authority-by-authority basis, the extent to which our councils are spending money on their statutory functions and on the agreed outcomes and how much discretion local authorities have in practice. That is an issue for local authorities as much as for us, but we need to get that right if we are to have meaningful discussions on local government finance in the future.
I ask the cabinet secretary to focus on a point that has been raised by my colleagues in local government. It concerns supported borrowings. Can he give us any detail on whether the allocation method for supported borrowings, in particular, is likely to change over the three-year period of the concordat?
The order will achieve a number of outcomes that Liberal Democrats support. We support in principle the reduction of ring fencing. On the council tax freeze, no one wants to pay more tax, but we want to see the Government's proposals on abolition of the council tax. The cabinet secretary will also need to explain to Parliament how a freeze is affordable without cuts being made to services—an issue to which, I am sure, many members will turn today.
We also support the allocation of additional resources to local councils, although I accept the analogy that Mr Kerr used earlier in terms of the overall balance of the settlement. I am sure that Mr Swinney will accept—not on the basis of my figures, but on the basis of local government's figures—that year 2 in particular will be extremely tight and must, even at this stage, pose serious questions for local government throughout Scotland.
Questions remain, so I ask the cabinet secretary to answer several questions that local councils have raised with me. The questions reflect a broad theme to which Derek Brownlee referred a moment ago, concerning the amount of information that is available and the clarity of the position on numbers, indicators and, especially, outcome agreements. That information is not available as councils set their budgets, which must be a significant issue for all local authority members as they come to grips with a changing financial position. I have raised the matter before with the cabinet secretary and I do so again. I ask him to ensure that the entirely legitimate and fair points that have been put to his department by councils throughout Scotland are answered in detail.
The cabinet secretary said earlier that the changes are significant. If they are significant, surely local government deserves as much clarity as it can possibly have in the budget-setting process. That is important. Does the cabinet secretary commit to the changes being flexible, or does the Government plan more of a straitjacket on local government? Some people in local government fear that an outcome agreement could be simply a return to ring fencing, but in another form. I am sure that the Government accepts that local councils have democratic mandates and that people vote for different issues at local and national levels. It follows that councils must be given the necessary flexibility, within the outcome agreements, to construct local solutions to local problems.
I am sure that Parliament and its committees will want to scrutinise outcome agreements in depth on that issue when the agreements are published—which the cabinet secretary said would be before 1 April—given that that will affect many of the arguments that all our communities will face about making cuts versus making savings in expenditure. I trust that the cabinet secretary will accept that as an important principle of local democracy; after all, that sits with the principle of reducing ring fencing.
The cabinet secretary will surely also accept that councils are not clear on certain budget areas, including regional transport partnership funding, the strategic waste fund and—this issue was raised with me this morning—flood protection. How can the Government ensure co-operation among councils following the changes to the previous system of a specific grant funding mechanism, which will no longer be available to local government? It strikes many of us who have looked at the new system that, if councils are to work together on issues, such as flood protection, that cross local government boundaries, there must be some way of allowing such co-operation to be built into the process. If those moneys are simply part of the overall settlement, it is not clear to me—nor, more important, to many councils—precisely how councils will be able to ensure that strategic planning over a number of years will be facilitated.
I hate to raise again the issue of efficiency savings—I was roundly condemned by the cabinet secretary for doing so yesterday—but I will have another go. Is the cabinet secretary prepared to accept the reality that not all councils will achieve the 2 per cent efficiency savings that will be expected of them? I accept that councils that achieve the target will be able to keep those sums—I welcome that—but what will be the position for councils that do not hit the target? Will they be allowed to keep cash savings below that target? In budgeting terms, that might not necessarily be an issue in the coming financial year but I suspect that it will be a significant issue for finance directors and local members in years 2 and 3 of the settlement.
On class sizes, although in principle it is perhaps more important today to consider the generality of the order rather than the specifics of policy areas, councils are saying that they have not been given one penny more to meet the national policy. Despite the concordat—which, by my reading of it, is crystal clear on the issue—no new money has been provided to lower class sizes. I presume that the policy will be implemented only by authorities that have a reducing school roll. How will that be addressed in outcome agreements in circumstances in which a council has real difficulties in achieving that?
Finally, the cabinet secretary will know that the distribution formula is of concern not only for Scotland's capital city. If I heard him right, he said that capital city funding would be dealt with outwith the financial settlement: in other words, it will be dealt with outwith the normal distribution formula that local government understands. How will he deal with other councils that have expressed concerns about the formula? I am sure that my good friend and colleague Mr McArthur will mention Orkney in that context, but I know that other councils have similar concerns. I imagine that the cabinet secretary does not plan a complete recasting of the distribution formula—otherwise, he would have mentioned that in announcing the settlement today—but does he plan any changes in that regard?
Overall, it is surely vital that Government does not blame local government for local services issues—that fundamental agreement must exist—but councils are saying that they are £400 million short, so how are they to deal with the tightness of the settlement? How will the Government accommodate the realistic, fair and reasoned arguments that councils are making?
We move to the open debate, in which speeches should be of a tight six minutes.
It is but a few short weeks since Gavin Brown described me and the Cabinet Secretary for Finance and Sustainable Growth as the new Romeo and Juliet of Scottish politics. How my heart leaped to hear those words. However, love is fickle and often unrequited. In my case, it has been made bitter by the certain knowledge that, in recent days, Mr Swinney has devoted himself not to me but to seducing a mysterious and demanding woman in the east known only as Margo, whom he has wooed assiduously with gifts of a substantially pecuniary nature. Nevertheless, I pledge my undying devotion to the quaint document that has been laid before us, which one may call the Local Government Finance (Scotland) Order 2008.
It appears that 32-nil is the score in terms of the number of councils that have signed up to the Scottish Government's proposals. No matter how many effigies of Councillor Pat Watters he has burned or how many voodoo dolls he has stuck needles into, Andy Kerr has failed miserably to browbeat Labour councillors into rejecting the SNP's local government settlement. Councillors know which side their bread is buttered on, and they will not toe Mr Kerr's now discredited line. That hardly augurs well for him in Labour's forthcoming leadership contest, which is now looming as Wendy Alexander suffers political death by 1,000 resignations or, on today's evidence, by 1,000 First Minister's question times—or even a budget vote or two.
We now know that, for the first time post devolution, the proportion of total managed expenditure will increase, which shows the importance of local government in Scottish National Party thinking and delivers a substantial real-terms increase in funding, with improved flexibility, over the next three years.
Will Mr Gibson join me in welcoming the statement by the Electoral Commission, which exonerates Wendy Alexander totally?
To be honest, "exonerates" is a bit far fetched—"lets off the hook" would be a more accurate description of what has happened.
We have heard from Mr Kerr about how councils will struggle financially under the SNP settlement, but he seems to forget that Westminster sets the level of the Scottish block. Until that situation changes by our securing the re-emergence of Scotland as an independent sovereign state, we will always be at the mercy of London to some extent. Of course, our hard-pressed council tax payers, unlike people in the United Kingdom as a whole, will benefit from what the Scottish Government is doing. As the publication of the "Why do we feel so broke?" report reveals, in the past year alone the disposable income of the average family in the UK has fallen from £16,305 to £15,231, after five consecutive years of decline.
As members will recall, recently we have heard much from Labour members about the need to protect vulnerable children. No doubt there will, therefore, be a queue of Labour members demanding the resignation of Councillor Janet Cadenhead, leader of Clackmannanshire Council, after an independent report that was published today condemned its appalling record on services to its most vulnerable children. In the past six months, Labour-controlled Clackmannanshire has also received damning Audit Scotland reports on best-value performance and its housing and homelessness services, which were called "poor and deteriorating". In addition, recent local media reports describe the council as being nearly bankrupt, with reserves of only £9,000 remaining for this financial year.
Today's report from HM Inspectorate of Education highlights flaws in Clackmannanshire Council's children's services, including "systematic weaknesses" in monitoring and helping children who are exposed to long-term harm; the highest referral rate to the children's reporter in Scotland—double the average of comparable authorities; a 33 per cent vacancy rate for children's social workers, which the local authority
"had not engaged fully with its partners in a collective approach to consider";
and a lack of joint working with the police, the national health service and other partner agencies. Only Midlothian Council, also under a Labour administration, has received a worse overall report for services to children. Both the deputy leader and social work director of that council resigned in February 2007 as a result.
It is said that a society can be judged on how it treats its weakest and most vulnerable members. Some young people in the care of Clackmannanshire Council have lived without electricity or education for four or five years at a time. That is an absolute disgrace. Labour MSPs have been banging on sanctimoniously about how councils cannot be trusted to run local services and should have most of their spending dictated to them. Now we know why—they have been talking to their own councillors.
On 13 January, Wendy Alexander told the BBC's "Politics Show":
"I have no doubt that Labour councillors, indeed Labour councils, have spent their life looking after the homeless, women's aid, all of these poor, weak, vulnerable groups that we came into politics for. But I frankly can't have the same confidence that a Conservative-controlled council, or perhaps even an SNP-controlled council or an independent council will, for example, meet our obligation to women suffering domestic violence."
Perhaps she should have a closer look at her own councils and councillors before maligning anyone else.
Clackmannanshire Council's leader has let down employees, service users, vulnerable children and the local people. With greater freedom for local authorities comes greater responsibility. That council's housing services are a shambles and its finances are almost bankrupt. By passing the Local Government Finance (Scotland) Order 2008, the Government will allow local government more autonomy and responsibility than it has had for many years. The SNP will ensure that councils that we control are effective and responsible in the delivery of services. Perhaps Labour should consider doing likewise.
Before I call George Foulkes, I ask members—particularly those who are speaking in the debate—to check that their mobile phones are switched off.
I, too, welcome the debate, because today we can turn to the real consequences of yesterday's budget. We do not need a crystal ball to make predictions. We can already see the stark reality here in SNP-led Edinburgh. Today, I bring Parliament's attention to the catalogue of cuts that the SNP-led alliance is proposing in our great capital city. It is clear from John Swinney's speech that he is living in a parallel universe and is unaware of what is happening around him.
Back in October last year, the City of Edinburgh Council proposed a school closure programme with no consultation, no thought of the impact that the programme would have on local communities and no school building programme to compensate. The 22 schools and four community centres that were marked for closure were saved by a powerful force of local parents, unions, community groups and common sense. The SNP and Liberal councillors in Edinburgh went back to the drawing board with their tails between their legs. Sadly, they did so only to concoct an even more damaging plan.
I make it absolutely clear that the previous Labour administration in Edinburgh left £52 million in reserves and that the council has been given a clean bill of health by the independent auditors for 23 years now, so there is no black hole to fill. What I have to relate is a catalogue of cuts that has been proposed by the SNP-led administration. It includes a cut of £468,000 from supported bus routes, which will hit the elderly; a cut of £966,000 from sure start services, which will hit the most vulnerable families; a cut of £850,000 from the community learning budget, so vibrant community centres will be left as empty shells like village halls under lock and key; a cut of £50,000 from a dedicated welfare rights service for people with learning disabilities; and a cut of £27,000 from Waverley Care, which is a vital service that cares for people in the city who live with HIV. That is the reality of what is happening in SNP-led Edinburgh.
I say to Mr Swinney, "So much for your much vaunted historic concordat." The list goes on and on, but I will mention two particularly distressing areas of cuts in services—home helps and nursery provision. Last year, the Lib Dem and SNP council sanctioned a review of every person in the city who was in receipt of home help; there were 4,000 people in total. So far, 40 per cent of services have been reduced and 21 per cent have been stopped completely. Three of my constituents—one is 94 years of age, one is 97, and one is 104—have had their needs reassessed and reduced by a telephone operator in the City of Edinburgh Council. Their needs were assessed not by social worker or a trained care worker but by a telephonist who is focused on hitting their line manager's cuts target.
I turn to nursery provision. The SNP-led council has cut 320 full-time nursery places, with devastating effects on parents who have just made it back into work or secured a place at college. I have one constituent whose child's full-time nursery place was downgraded to two and a half hours. Her employer's reaction was, "Don't bother coming back to work." I know of another child who lost her full-time nursery place. Her mother is a recovering drug user and, as a consequence, she is no longer deemed to be at serious risk. Instead, we should be giving the mother every support to get back on track, to give her child every chance of a better future. We should not be ripping support away at the first opportunity.
The cuts are a catalogue of shame and should serve as a shot across the bow of any suggestion that the SNP Government cares about social justice, tackling poverty or allowing people to grow old with dignity and respect. I say to Derek Brownlee that in order to provide his council tax freeze—which helps the wealthy, as I proved earlier—the most vulnerable people in our society are going to be hit again and again.
I assume that George Foulkes will condemn his colleagues in Glasgow, who are now in their third year of a council tax freeze, for exactly the same reasons.
I certainly condemn SNP-led Aberdeen. My colleagues will deal with the point about Glasgow.
I tell Mr Adam, who is a former pupil of the same school as me, that it is not just Edinburgh that sees the ruthlessness of the SNP in government. In West Lothian, although Labour is the largest group, a minority SNP and Tory alliance has put the SNP in power. Not only does it control the executive, but the scrutiny committees, which are meant to monitor the administration, are chaired by executive members. Even Stalin did not control the Soviet Union with such a grip.
Will the member give way?
I am in my final minute.
In England, such an arrangement would not be allowed by legislation, and it should be outlawed in Scotland as well. I say to everyone who is rejoicing at Swinney's budget—I mean John Swinney's budget—and who thinks that it is going to mean a great future for Scotland, that they should be afraid: they should be very afraid. Edinburgh and West Lothian show the start of the stark reality of the SNP in power.
I have been in trouble today for not addressing ministers appropriately. Will members please remember to address people by their full names?
I begin by praising Parliament for passing the first budget by a minority Government in the Scottish Parliament. Without it, today's transfer of money to our local authorities would not have been possible. Without it, council tax payers could have been faced with a 22 per cent increase to deliver services. I will return to the council tax later in my speech.
In one respect, the fact that the budget was delivered by an SNP Government is irrelevant. Because we have a minority Government, different parties with different priorities and perspectives were forced to work together in the best way to take Scotland forward.
I know that the Scottish Green Party will not agree with all the SNP Government's priorities for local government. The passage of the budget yesterday and the transfer of funds to local authorities today will lead to a council tax freeze across—I hope—all Scotland. I also hope that we will use our fragile majority in the chamber to bring in a local income tax to replace the deeply unfair council tax. I am aware that the Greens favour a land value tax, but they know that freezing the council tax makes more likely the alternative that I support and which they do not. However, the Greens did not throw up their hands in despair and irresponsibly threaten to block the budget; they worked with the minority Government to balance the budget towards some of their objectives. For them to abstain yesterday was a mature and principled decision, although I hope for their full support in future years.
Margo MacDonald similarly represented her constituents' interests in a forceful and constructive way and, in the end, supported our minority Government's budget.
Will the member take an intervention?
No.
Given Ms MacDonald's track record in the Lothians, I sometimes wish that she would consider a transfer to Glasgow, although given her prowess at garnering list votes, perhaps not.
I assure the Deputy Presiding Officer that there is no topic drift in my speech and that I will show the relevance of my points shortly. However, I must briefly mention the Conservatives. I am sure that Mr McLetchie, my fellow Local Government and Communities Committee member, will be able to guarantee that there is no rightwards shift in my politics on our subject committee. The Conservatives voted for the SNP budget yesterday, enabling this order to be passed today. They said that the budget is not a Conservative budget, but they searched for common ground with the Government and were able to find it, and so took a mature and responsible decision to support the budget.
What can I say about Labour and the Liberal Democrats? As I intend to stay positive during this debate, I will say nothing whatever about them.
Today, money will be transferred to local government—members will note that it has taken me more than three minutes to refer to the historic concordat between the Government and local government, which is probably a record for an SNP MSP these days. In some ways, the most historic aspect of the concordat is that it was signed at all. The Convention of Scottish Local Authorities has traditionally been perceived as a Labour-dominated organisation, but it worked with an SNP Government, which it has never had to do before. It has developed an excellent, professional working arrangement and the concordat is the provable result.
The money that we pass to local government today will be better used because of the new arrangements underpinning the concordat and single outcome agreements, and all our communities will benefit as a result. A vast reduction in ring fencing will give local authorities the flexibility that they need to deliver the best services without costly and time-consuming bureaucracy. Local authorities will also be able to keep their efficiency savings for the first time so that they can re-invest in front-line services. If local authorities had had that right under the previous Executive, they would have had an additional £160 million.
Does the member recognise that, in the past, every time central Government provided services through local government—for example, free personal care or free bus travel for the elderly—we fully funded our commitments? His party has funded none of its commitments.
It is a bit rich of Mr Kerr to mention free personal care. It is our party that has increased support for free personal care, which the previous Executive failed to do.
In Glasgow, the city that I represent, the controlling Labour group has said that it will support the freezing of council tax. The extra revenue that such a freeze will give Glasgow City Council is equivalent to a 3.4 per cent uplift in council tax revenue, but it will not cost Glasgow council tax payers a single extra penny. That is because of the additional £70 million that the Local Government Finance (Scotland) Order 2008 will make available to local authorities.
The Glasgow Labour councillor who, in conversation with a reporter from the Evening Times the other day, said "God bless" the SNP might have had his or her tongue stuck in their cheek, but the reality beneath the comments on Glasgow's council tax freeze is spreading within local authorities throughout Scotland.
Local authorities are able to work with an SNP Government to provide significant benefit for their communities—the concordat is testament to that. Councillors across Scotland are able to put party-political differences to one side and work together for the benefit of all communities. Parliament partially managed to do likewise yesterday: I hope that it will do so again today. However, I genuinely believe that, throughout the budget process, the Labour Party and the Liberal Democrats have let Parliament down with their scaremongering and negative attitude. I look forward to the order being agreed to.
Mr Doris failed to fulfil Derek Brownlee's hope that the debate would provide more light than heat.
What can the people of the area that I represent expect from the outcome agreement between the SNP-led West Dunbartonshire Council and this SNP Government? So far, we know that West Dunbartonshire, which is the second most deprived area in Scotland, is to lose £2.25 million in real terms from the fairer Scotland fund, compared with the planned spend in 2007-08. It will lose a further £619,000 in supporting people funding, compared with its allocation for this year. Old people will face reductions in, and increased charges for, home care. Children will lose their out-of-school care, educational establishments face reductions in staffing and supplies, and libraries face closure. Those services all appear on the £14 million menu of cuts—or, should I say, efficiency savings—that the SNP Administration published in the autumn, from which it will make its selections in the next fortnight. That is what SNP government means.
Will the member give way?
I will let Mr Paterson in in a minute.
In 2006, as a member of the Finance Committee, Mr Swinney agreed that the grant-aided expenditure formula should be changed to take more account of deprivation in the next spending review period but, in government, he has done nothing about that. There is a direct correlation between the lowest increases in grant support for local government and the areas with the highest levels of deprivation. The council areas that will lose out under the Government's funding arrangements are Glasgow, Dundee, West Dunbartonshire, Inverclyde and East Ayrshire—the same litany of places that have the greatest proportion of people living in deprived circumstances and the highest concentrations of need.
How resources are distributed between councils is not the only issue. The priorities that are set by the Government are important, too. This Government's priorities are not about social justice. I am not opposed to outcome agreements, nor am I a defender of ring fencing, although I believe that ring fencing is appropriate in some instances and that Mr Swinney will regret not adopting a more measured and considered approach to reducing it. We will see how that works out.
From his time on the Finance Committee, Mr Swinney will remember that we recommended outcome agreements for a single regeneration fund. The intention was to allow increased local flexibility for targeted spend within a tightly drawn national policy framework for tackling deprivation.
Within that budget, which was vastly smaller than the total local government spend, we insisted that there should be safeguards, including the use of baselines, clear specification of objectives and the use of measurable targets. I remember Mr Swinney and Mr Mather waxing eloquent about those things—I joined in. It is regrettable that Mr Swinney's enthusiasm for tracking expenditure patterns, like his desire to ensure efficiency savings are properly specified and monitored, appears to have evaporated now that he is in government. I remind him of one bit of evidence that we took while we were in the Finance Committee. Voluntary organisations told the committee that they want to play a stronger role in meeting national policy objectives, but that they suffer badly when local government budgets are set, particularly when those budgets come under pressure. They wanted a level playing field and security of funding. However, if we look at the list of proposed closures in West Dunbartonshire, or indeed the proposed closures in Edinburgh that were referred to, we see time and again that voluntary organisations are getting caned.
In Edinburgh, Margo MacDonald has ensured a special sweetheart deal in recognition of the city's capital status. Such a political fix that will go outside the system is highly questionable. Mr Swinney is effectively saying, "We'll write the terms under which we'll give you extra money, and everybody else can go hang." Within a tight budget arrangement, it represents a net transfer away from Glasgow, West Dunbartonshire and other places. The people who purport to represent those areas should be ashamed. By the time outcome agreements are in place in West Dunbartonshire, many long-standing community-based organisations, projects and facilities will be shut, and the outcome agreements will be written without them. The people who suffer will be the poor people, who are most dependent on those facilities and most reliant on what local government and voluntary sector organisations provide.
In Clydebank, an area where council services struggle to meet the needs of a client or customer base, and with the second highest level of deprivation in Scotland, the loss of those vital services and projects will have a major effect on well-being. Of course, Mr Swinney will say, "Well, it's local decision making. The councils make their minds up. They set their priorities." I am sure that he and his colleagues will try to deflect responsibility for those unpalatable decisions.
Will the member take an intervention at last?
Mr Paterson and his colleagues will have to accept responsibility for the allocations that they make and for the choices that they are putting in place. I hope that I get the support of SNP regional list members in making the case for West Dunbartonshire. However, when Mr Swinney was due to meet West Dunbartonshire Council, Mr Robertson, the leader of the council, did not even turn up. He was not bothered. So far, the leadership of the council and the regional list members have settled for buttons. That is not good enough for the people whom I represent. In the long term, they deserve better than they are getting from the SNP.
I politely ask Kenneth Gibson and Bob Doris to tone down the compliments just a bit or, come the next election, Derek Brownlee, David McLetchie and I may have some trouble with our membership. I have complimented Mr Swinney a number of times, but I point out to him again that his Government has more money in cash terms and in real terms than any other Government in the history of Scotland. Can we please stop using the words "tight spending round"? In relation to previous budgets, it is not true. I challenge any SNP member to stand up and tell me that it is true. I will take an intervention at any point in my speech from any SNP member who takes up that challenge.
There are still one or two manifesto commitments of the Scottish Conservatives that have not yet been implemented. I shall mention some of our manifesto commitments on local government. We felt that there should be a commission on local government in Scotland to consider where we can pass power down from Holyrood to councils—what we call localism—where it is far more appropriate. In addition, we said that we should consider those areas in which local authorities can allocate power down to community councils, to try to reinvigorate the community council movement and to ensure that more decisions are taken on the ground, where they are implemented. We hope that the cabinet secretary will take cognisance of that.
We have talked for some time about the Gould report proposal to decouple the local government and Scottish Parliament elections. That would help with some of the issues that arose at the election but, just as important, it would give local issues their day in the sun. Voters would be able to analyse properly how their councils had performed and vote on that basis, while issues could be thrashed out in full view of the electorate instead of being subsumed by the Scottish Parliament elections. I know that the Government is also keen to decouple the elections, and we hope that we will get a final decision on that sooner rather than later.
The Scottish Conservatives support the reduction in ring fencing in the local government finance settlement. That was in our manifestos in 2003 and 2007, and I note in passing that it was also mentioned in an amendment in Derek Brownlee's name in the equivalent debate last year when, once again, we called for a reduction in the amount of ring-fenced money. The facts appear to be that we are moving from about £2.7 billion of ring fencing down to about £500 million. The previous regime was too rigid and resulted in 50 separate reports on 50 separate ring-fenced funds. The changes that have been outlined can give councils flexibility and allow local solutions to local problems.
How does Gavin Brown view the single outcome agreements? I understand that they have at least 360 indicators at the moment. That number might boil down somewhat, but a rigorous regime will still be in place.
The difference is that there will be one single outcome agreement and report instead of 50 separate reports in addition to the council's annual report.
I note in passing that Mr Kerr alleged that there was only a 1.8 per cent increase in council tax during his party's time in government over the past eight years, which simply does not add up—the fact is that council tax has actually increased by 60 per cent since 1997.
Having less ring fencing gives flexibility. We must also remember that councillors have the same democratic mandate that we have, and that less ring fencing provides greater accountability. Local government should not simply be central Government's delivery agent. Councils need to act as partners in governing Scotland instead of as servants, which is the position that we had before.
The Conservatives strongly welcome the council tax freeze. It is good, solid, Conservative, right-of-centre thinking that has been taken well on board. However, we question how sustainable the policy will be in future. It will clearly prove extremely popular with the voters, particularly this year, but I ask the cabinet secretary what will happen if and when the local income tax is not supported. There are clear divisions between the Liberal Democrats and the SNP on that tax, as outlined recently by Nick Clegg, who made it clear that the SNP's local income tax is simply not local at all.
It was interesting—or rather, amusing—that when Mr Clegg was up here a picture of Chris Huhne was mistakenly printed in the paper. An even more interesting fact is that nobody noticed or picked up on it, not even Tavish Scott.
We are against the local income tax and question how sustainable the council tax freeze is, but we welcome it strongly for this year. Again we urge the cabinet secretary to consider the Scottish Conservative proposal of a 50 per cent council tax discount for pensioners, which would go some way towards solving the problems and addressing the issues. The proposal would be straightforward to implement and we commend it to the Scottish Government.
I am sorry, but I will have to cut the remaining open-debate speeches to five minutes each.
Mr Swinney is clearly a revolutionary. I was going to suggest that he is a quiet revolutionary but, given how robustly he has defended not only his budget and the local government settlement but the Government's position over the past several months, quiet might not be the appropriate description. However, he is undoubtedly a revolutionary. He has brought about a revolutionary change in how the local government budget is arrived at. The concordat is highly significant.
Every year during the past nine years, just before the Parliament was asked to approve the budget and the local government finance order, regular e-mails would appear in members' in-boxes. The e-mails contained briefings from councils and COSLA, which always explained that there was a funding gap—Mr Kerr should take note—between the amount that councils were allocated and the amount that it would cost councils to discharge the additional responsibilities that the Government had placed on them.
Will the member give way?
No, thank you.
This year, we have received no such lobbying from COSLA. Indeed, COSLA's leader defended the historic concordat between local authorities and the Government, which is significant.
Will the member give way?
No, thank you.
The agreement between local government and national Government is part of the revolution—we are no longer at war.
I commend Mr Swinney for his plan to monitor the new approach through local outcome agreements. It is true that we must wait and see how that works in practice. There is no doubt that all members will scrutinise the new arrangements.
I ask Mr Swinney to go further. There are concerns about the detail of the funding formula, not just this year but in general. Members have suggested that Margo MacDonald, in defending her constituents' interests, has arrived at a special arrangement that is somehow unfair to the good people of West Dunbartonshire, Glasgow and other places. Many members are concerned that funding formulas are unfair.
Will the member give way?
No, thank you.
Will the member give way?
No, thank you.
Given Aberdeen's Labour legacy of the highest council tax and among the lowest levels of rate support grant—
Will the member give way?
No, thank you, Mr Baker. Do not bother; you might have an opportunity to speak at another time.
Labour's legacy in Aberdeen is a 90 per cent increase in council tax since 1997. During that time, council tax in the rest of Scotland increased by 60 per cent, which was bad enough, but a 90 per cent increase is ridiculous. The increase came about because of the tight settlements that were forced on the city by Labour members and their Liberal Democrat colleagues. This year, for the first time since I became a member of the Parliament, Aberdeen has had a significantly above-the-floor increase—more than 4 per cent, when the floor is around 2.8 per cent. I welcome that.
However, I challenge Mr Swinney to continue his revolution by carrying out a root-and-branch review of all funding formulas in the public sector, so that we can ascertain whether the money that rightly is allocated to tackle deprivation produces an appropriate outcome. If such a helpful review had been done in the past, West Dunbartonshire would not be in the position that it is always in. We cannot continue to take the same approach and produce the same outcomes. Some of us are just as passionate as Mr McNulty is about the rights and wrongs of matters and about addressing the social deprivation that exists throughout our country, but we know that the solutions that were applied in the past have not made a difference. I challenge Mr Swinney to consider the funding formulas, to ascertain whether change can produce better outcomes than we have had up to now.
Councils and their communities and partners are always anxious at this time of year as they await the outcome of funding decisions that will directly affect the provision of much-valued local services. That is not a sensible way of going about things. Local councils ought to be able to determine what they need to maintain and develop local services. That is why Liberal Democrats support the replacement of the discredited council tax with a system of fair local income tax.
Will the member give way?
I am sorry; I have only just started.
At first glance, this year's local government settlement might seem to be an improvement, because it provides for the much-heralded council tax freeze—but at what cost? It will be cold comfort six or nine months down the line, when councils will be struggling to cope with the demands that are made of them. Councils will be pulled in two opposing directions. On one hand, they will have to make adequate provision for demand-led local services, such as home care and special educational needs; on the other, they will have to deliver SNP election pledges that we know were uncosted and unrealistic.
Accepting funding for a council tax freeze this year will make councils ever more dependent on central Government largesse in following years, because they will have raised an even smaller percentage of their total budget directly from their electorate. Any council tax freeze must be fully funded from central Government, and it must not impact on the other budgets for local government services this year or in future years.
The funding package that is on offer is conditional on local authorities' agreement to all elements of the concordat. If they do not agree to everything, they will receive a reduced block grant. Is that new respect for local government?
The budget is opaque, because many budget headings have been rolled up. Perhaps that has been done to hide the fact that there is not enough money to deliver all the things that citizens expect from local government.
I am not a great fan of ring fencing, but the unseemly haste to do away with it, the lack of real dialogue with local authorities and their partners—especially those in the third sector—and the fact that local outcome agreements have not yet been negotiated are causes for concern. More than 40 specific grants have disappeared. The removal of ring fencing might make council budgeting more flexible, but by its nature it will put at risk successful initiatives. Many local community groups have expressed concern to me that budget cuts are looming. We might not find out for some time, but we know that when they happen this Government will refuse to admit the part that it has played.
I have two specific concerns. First, the settlement has no provision for revenue support or level playing field support to continue the school building programme. What a let down that is for the young people, parents and teachers in my home town of Ellon, which, incidentally, is in Mr Salmond's constituency. Plans for a new academy have been knocked back.
Councils cannot possibly be expected to take the strain alone when it comes to investing in capital expenditure for schools: they must have support from the Scottish Government. The Scottish National Party must accept that its futures trust model is impractical and possibly illegal, and will almost certainly never take off. The previous Administration got on and built new schools. Unfortunately, confusion and delay are the hallmarks of the Government's approach. What provision is there for new schools in the budget? None whatsoever.
Secondly, the hand dealt to regional transport partnerships is particularly poor. The decision to end direct capital funding to RTPs is deeply regrettable. It will, without a doubt, prejudice their ability to deliver quickly and effectively on already agreed objectives.
At a recent Transport, Infrastructure and Climate Change Committee meeting, the cabinet secretary said:
"the strongest and clearest lesson that I have learned about any major transport or other infrastructure project in the brief time that I have been in government is that governance arrangements have to be crystal clear before a project gets under way. If a project gets under way with any uncertainty as to its direction or where the responsibility or power lies, it will be a difficult project."—[Official Report, Transport, Infrastructure and Climate Change Committee, 15 January 2008; c 361.]
That makes his decision on regional transport capital grants all the more contrary.
I could not speak in a debate on local government finance without referring to Aberdeen City Council and Aberdeenshire Council's fair share campaign. Those councils have historically had a poor share of the overall budget. The previous Administration had started, albeit slowly, to turn that around, and the councils were edging towards receiving a fairer share of the Scottish budget. This year, that has been reversed and Aberdeen and Aberdeenshire have received the worst settlement that they have ever had: respectively 85 per cent and 88 per cent of the Scottish average. That is grossly unfair. I ask Mr Swinney to explain how that has come about and to examine the distribution elements within GAE to bring about a fairer settlement.
When Parliament gives funds to local authorities, we also devolve responsibility—now more than ever—for setting priorities. In my constituency in the city of Aberdeen, local government's priorities were clear and consistent over many years: Labour-led local government invested in support for disadvantaged communities, older people and young people at school. Up to now, thanks to Labour policies set in this Parliament, many of those same priorities have continued to be delivered in spite of changes in the political leadership of the city council five years ago. Social inclusion initiatives, home zones, community enterprise and community wardens have continued to make a difference to the lives of thousands of my constituents.
In education, Aberdeen has a tremendous legacy as a result of historically high levels of spending on schools and decisions taken by the Scottish ministers in the previous Administration. At the other end of people's lives, in providing sheltered housing for older people who are able to stay in their own homes, Aberdeen has also enjoyed the benefit of many years of sustained and substantial investment.
All those services cost money, but they also depend on the vision and the priorities of those who make the decisions. Last week, the SNP and its partners in the administration of Aberdeen City Council confirmed that they will seek to close several city schools, including schools that serve disadvantaged areas such as Tillydrone in my constituency. Monday's Press and Journal revealed the financial saving that is expected from the school closures—revenue savings of £2 million a year and capital receipts of £3 million from the sale of school sites. On the same day, the Daily Record revealed that Aberdeen City Council accounted for half of all Scottish council spending on external consultants in the past three years, including more than £6 million in the first eight months of the current financial year—with the SNP in charge of council spending.
Politics is about priorities, and those reports tell us a lot about that. Politics is also about vision—it is about the kind of city that the council's elected representatives want. However, the present administration's vision for the future of sheltered housing in Aberdeen appears to be bleak. All 69 sheltered housing wardens throughout the city have received redundancy letters in the past three weeks. According to the Aberdeen Evening Express on 25 January, wardens were told that their service
"does not represent effective or efficient use of Aberdeen city council resources"
because they are
"‘inactive' for parts of their working hours."
In other words, those who make decisions in the council chamber regard having members of staff who can help, befriend and support elderly residents not as a high-priority social service but as a form of economic inactivity. Cost savings to the council are to take priority over the interests and wishes of residents.
I have mentioned only some of the services in Aberdeen that face real and imminent risk in the coming financial year. The potential losers are those who need public services the most. Of course, that is not the responsibility of ministers alone. It is true that the settlement has left little room for growth, but it is also true that it gives Aberdeen the lowest funding per head of any council in Scotland, a recent misfortune that is set to continue under the Government and which contrasts with the situation when Labour was in charge, when Aberdeen had the lowest council tax of any major city. However, what makes a difference to service users is what is done with local government funding as well as how much there is.
Local government throughout Scotland has had to cope before with tight financial settlements from ministers, most recently in the 1990s. At that time, the council leaders in Aberdeen set the right priorities to protect the vulnerable and maintain investment in schools. That is not the case today, which is why my constituents will look to the Parliament and to Aberdeen City Council to protect services that parties in the Parliament say they support. When ministers finally reach single outcome agreements, they will be accountable, alongside local councils, for the outcomes for children at school, for older people in sheltered housing and for people who live in regeneration areas. The Parliament will hold ministers to account on that. The budget debate may be nearing a conclusion, but the outcomes debate is about to begin.
There is a little of the after-the-lord-mayor's-parade feel about the debate. Those of us who sat through the full three hours of stage-managed drama yesterday have cause to feel that more than most, so I commend Mr Swinney for putting in yet another opening and closing shift. It is tempting to ask what reservations he has about the competence of his deputies, when today they are not even allowed to sit on the front bench with him.
The tone of today's debate could not be more different from that of yesterday's debate on the budget, as epitomised by Derek Brownlee's offer to Andy Kerr at the outset of his speech of what looked like an olive branch—although, as I am no gardener, it could have been poison ivy. However, as members have rightly pointed out, this debate is important. We are debating the vital delivery of a wide range of key local services throughout the country. In previous debates, and again today, Liberal Democrats have indicated our support for the principle of further lifting local government finance ring fencing. We believe that the principle of increasing the power of local councils and councillors to make decisions about how best to meet the needs of those whom they are elected to serve is sound, but applying that principle in practice is not always straightforward, as I am sure the cabinet secretary would concede.
It is not good enough for Government ministers simply to denounce as scaremongering the concerns that a range of bodies that support some of the most vulnerable in our communities have raised. As I mentioned in yesterday's debate—I reiterate this for Bob Doris's benefit—whether or not someone is scaremongering appears to depend on which party or organisation they represent, rather than which concerns they express.
Ministers need to acknowledge that there is genuine uncertainty and concern among many groups. In my constituency, those who are involved in supporting people with mental health issues are particularly apprehensive about the consequences of the budget and the settlement. That is a fact. At a different time, however, that point would have been trumpeted in full technicolour glory by many of the members who are now sitting on the Government benches.
It may be that some of the concerns that have been expressed are part of the natural process of positioning with local government and of ensuring that councils resist any temptation to divert funds away from specific local services. I entirely accept that, in many cases, concerns will be allayed in due course. However, the absence of a clear sense of how the single outcome agreements will operate is fuelling those concerns. Derek Brownlee and Tavish Scott, among others, spoke about that.
Ministers are overfond of heralding the "historic concordat" with local government, but it is the way in which the single outcome agreements function—how councils manage the almost inevitable tension between meeting real local priorities and delivering the Government's grand manifesto promises—that will provide the true test of the concordat's historic significance. Derek Brownlee was right to highlight the recommendations that the Finance Committee made in its budget process report, to which the Government's response was rather curmudgeonly, as it was to other recommendations that were made to it.
Back in December, when Mr Swinney first made an announcement on the settlement, I made it clear that, for all the spin and assertion, I did not believe that a proper judgment could be made then, nor even in February, when councils take decisions on their budgets. With due respect to the now absent Lord Foulkes, an objective assessment will be made over the longer term. Our concerns are now on record.
I accept that local authorities, in keeping with many other bodies, will always say that more money is needed, almost irrespective of the generosity of the settlement. However, ministers will be aware of the concerns in my constituency about the disparity in the level of funding for Orkney compared with other island authorities. It will not surprise ministers that the settlement for the next three years, which effectively locks in and exacerbates that disparity, has been met with anger by many of my constituents.
I tackled Rory Mair of COSLA on that point when he appeared before the Finance Committee in December. I asked him about the timeframe for taking forward work to unwind the disparity in funding per head of population between the island authorities. In response, he said:
"Examining the distribution mechanism is such a huge issue that we have said to the Government that we need to give councils certainty of funding for the next three years. We must work during that period to prepare plans."—[Official Report, Finance Committee, 4 December 2007; c 179.]
I would welcome an assurance from the cabinet secretary—as would Orkney Islands Council and my constituents—that he will do everything in his power to ensure that those plans are drawn up as a matter of urgency.
In the meantime, there is the not insignificant matter of the £1 million for Orkney's internal transport needs, which has been raised with the cabinet secretary by me and by the convener of Orkney Islands Council, Stephen Hagan. I know that the cabinet secretary has undertaken to review the situation. I hope that in the very near future, if not in winding up the debate, he can provide some reassurance that the reduction in Orkney's budget will be reversed. Without that £1 million, critical lifeline ferry and air services to some of the remotest and most fragile communities in my constituency are at risk.
Liberal Democrats believe that there are many positive aspects to the settlement. The reduction in ring fencing is welcome, as is the flexibility that it will provide councils. However, there remains a great deal of uncertainty about its implementation and immediate impacts. There are few answers for councils on the missing millions from the waste fund, on the management of funding to tackle flooding and on a viable legal alternative to public-private partnerships that will enable schools throughout Scotland to continue to be built and refurbished. There is also uncertainty about the single outcome agreements and how the Government intends to spin its way out of the hole that it has dug by promising smaller class sizes while not delivering a single extra penny to fund that pledge. As we have heard from many members, there are real concerns throughout Scotland that local government is looking down the barrel of damaging cuts to services.
The Local Government Finance (Scotland) Order 2008 is not without its good points, therefore Liberal Democrats will not oppose it. However, given the concerns and uncertainty that I have described, we cannot in good conscience support it.
Today's debate has been a much lower-key affair—but also a more thoughtful one—than yesterday's debate on the budget as a whole. When I reflected overnight on the extraordinary outcome of yesterday's debate, I could not help but think that Wendy Alexander and Nicol Stephen are very much like the Duke and Duchess of York—but not so much Andy and Fergie as the "grand old" version who marched them up to the top of the hill and marched them down again.
However, that was yesterday's debate. Today we are debating local government finance. The SNP is to be congratulated on its bold attempt to change the relationship between the Scottish Government and local authorities by ending ring fencing of a significant proportion of the grant allocation. That was also advocated by the Conservatives in our election manifesto and, since the conclusion of the concordat with COSLA, it has been widely welcomed across the political spectrum in Scotland. It is interesting to reflect that the Labour Party's criticisms of the change have become more muted since the local government settlement was announced. Labour's focus has shifted towards achieving clarity in outcomes—a welcome shift in position, which was reflected in the excellent contribution from Des McNulty.
I have no doubt that a council tax freeze is popular. However, it cannot seriously be suggested that the amount reserved by the Government in its budget to recompense councils that agree to freeze their council tax will be sufficient to cover the inflationary increase in council tax levels that we would otherwise have expected. However, that is only one side of the equation. The key question is not whether councils have the finance to freeze the council tax but whether they have sufficient funding from their grant allocations to meet their responsibilities and the obligations placed on them by the single outcome agreements, which have still to be negotiated on a council-by-council basis. That is the great unknown, because the nature of those obligations has still to be clarified.
Today at First Minister's question time, the First Minister told Johann Lamont that councils will be required to achieve a particular target—as yet unspecified—in respect of private landlord registration. That is one tiny part of councils' statutory obligations. Andy Kerr suggested that there might be as many as 360 in the outcome agreements. If there is to be an attainment target for landlord registration, just how comprehensive, and, more important, just how onerous will the other targets and outcomes be? If the outcomes in relation to performance vary widely from one council to another, that might be a fair reflection of the different needs and priorities of councils and, in particular of authorities' different starting points, but what will it mean for the achievement of consistent standards of service throughout Scotland? Differences in standards are regularly branded in this chamber as a postcode lottery and I have made that criticism in relation to the delivery of free personal care. However, at what point, and in respect of which services, is a postcode lottery unacceptable because we demand a national standard, as opposed to simply being a pejorative term for legitimate differences in levels of service, which should be acceptable to us because they reflect the different priorities of our councils? That is the question that we should ask ourselves.
Will the member take an intervention?
No. I am sorry.
In the years to come, experts in public finance will, no doubt, try to analyse the different approaches of the previous Executive and the present Executive to the relationship with local government. That is of far more than academic interest; it will be interesting to note how the Scottish Government manages to initiate a new policy that uses councils as delivery agents without resorting to a ring fence to ensure that services are delivered. That will be a challenge.
It is also legitimate to identify potential liabilities that are clearly not factored into the settlement that has been reached. Quite fairly, the Labour Party has spoken about police pension costs. We might also highlight free personal care, not just in relation to what the Auditor General for Scotland has said, but in relation to the financial consequences that might flow from the Sutherland review and other changes in councils' interpretation and implementation of the law. At present, there is a wide discrepancy throughout Scotland.
When Mr Swinney was in opposition he used to sit up at night worrying about the hundreds of millions of pounds of potential liabilities that councils faced in respect of single status agreements and equal pay claims, but since he ceased to be a member of the Finance Committee and moved into Government, he has apparently decided that the situation is to be tolerated with equanimity and a casual assurance that it is all just up to the councils to sort out.
Then there is the question of inherited deficits. In the City of Edinburgh Council, the new Liberal Democrat-SNP regime inherited from the out-going administration a £9 million deficit in its children and families account. I have a lot of sympathy for the council but, as George Foulkes pointed out, its response was to try to close 22 schools in the city. Can we now be satisfied that those schools will be saved, or will the closure plan reappear in modified form?
Those are all legitimate questions at national and local level and I suspect that the Government does not know even half of the answers. The relationship is an evolving one, with the agreements yet to be signed. That is broadly acceptable in the context of a new system and a new relationship and, for that reason, the chamber should approve the order. However, in doing so, we should also remind the Government that we will keep it under the closest scrutiny. The concordat and the outcome agreements are about a shared and not an abdicated responsibility.
I agree with the issues that Mr McLetchie raised and that the concordat and single outcome measures pose interesting challenges. Given the many references to yesterday's debate, today's debate has a bit of a morning-after-the-night-before feel to it. Indeed, Mr Doris made yesterday's speech today, which I found somewhat confusing. Nonetheless, the debate has been a fairly good one. Members have tried to raise issues that relate not only to the order but to local concerns that constituents around the country have raised with us.
In his opening remarks, Mr Swinney spoke of the need for a clear national outcome. We do not have that as yet. We are spending £11 billion and yet we do not understand what the clear national outcome will be. Mr Swinney talked about understanding members' concerns. We want to hear his response to the concerns that members all round the chamber have raised on the deep service cuts that are now taking place.
The SNP needs to inject a bit of honesty into the debate on ring fencing. Its manifesto included commitments in relation to which it said that it would ring fence resources. I found two—on drugs and mental health. However, when it found that it could deliver no more policies from its manifesto commitments, it sold us the whole removal of ring fencing from local government debate. It was unwise to do things at the speed at which it moved on the issue. The single outcome agreements were formulated too quickly. The Government made no policy commitment in its manifesto to end ring fencing in local government services. We find ourselves in the position that we are in today simply because the SNP could not deliver any more of its manifesto commitments.
I turn to the concordat. It contains no resources to reduce class sizes and yet Mr Salmond has told the chamber—as has Ms Hyslop—that all manifesto commitments will be met by 2011. That is not what local government is saying. As Mr McLetchie said, Government cannot hide from or shirk its responsibilities in respect of the delivery of its manifesto commitments, yet that is exactly what it has sought to do in making the concordat: it has shifted responsibility for delivery to the local level. Whenever a member raises an issue of service delivery or an aspect of Government responsibility, they are told, "Do not worry, it is in the historic concordat. That is up to local government." The Labour Party is not prepared to accept that as an answer. We will study closely the actions of Government on the matter.
We heard some interesting speeches in the debate. I look forward to hearing a serious speech from Kenny Gibson one day; we have not had one thus far. George Foulkes outlined some of his concerns on care services and nursery and school places in Edinburgh. Mr Swinney needs to tell the chamber what his Government will do in response.
Members have rightly described Des McNulty's speech as passionate. Other members made speeches in which their passion on other issues was clear. When home care charges are increased, out-of-school care is withdrawn and real cuts in services are hitting real people, our responsibility is to be passionate in raising those concerns.
In saying that we should not kid ourselves about the so-called tightness of the settlement, Gavin Brown made a good point. Scotland has double the money that we had when devolution began. More resources are made available to the Parliament than was ever the case in the past. Our job as MSPs—which, of course, is also the job of the Government—is to ensure that the money is spent wisely. I am not sure that the Government has done that thus far.
Brian Adam described Mr Swinney as "a revolutionary" and went on to call him a "quiet" man. However, I question a revolution in which we have no idea how £11 billion is being spent and no monitoring system in place. We are facing the sort of dangers that members including Mr McLetchie raised.
I am extremely concerned about the poor settlement that Scotland's six most deprived councils are getting. The settlements reflect neither social justice nor need.
Mr Kerr talks about the poorest areas. Does he not realise that, in the eight years in which Labour was in power, Glasgow City Council, which has half of Scotland's poverty, actually received the worst settlement? If it received the same share of funding in the current year as it did in the first year of devolution, it would have an extra £102 million to spend.
I do not accept that. The council received the highest inland settlement and the Government directly invested a number of other resources to tackle some of the issues. As was recognised by Iain Duncan Smith's report on Glasgow, some significant measures have been taken to tackle poverty, and many of them were taken by the previous Government.
Lewis Macdonald correctly pointed to the issues faced in Edinburgh, and he also entered into the discussion on a subject that we all share concerns about—outcomes and how to respond to those issues.
When we consider Scotland-wide issues of flooding, PPP and strategic waste management, we see the challenges for Scotland's local authorities in working together effectively to tackle national infrastructure problems without the centrally allocated resources that previously existed. If our local authorities do not sort out those issues, they will face problems, such as sizeable fines from Europe if we do not resolve the strategic waste issues. I am concerned that our approach to funding will lead us into problems.
We have looked at what is happening in councils in Scotland and we see the challenges that they face. Savings have to be made on school budgets, school transport, welfare rights staff and residential care. Councils are closing swimming pools and laying off sports development officers. We also see the lack of resources in the poorest areas in Scotland.
Unlike the Liberal Democrats, we will support the order today. We see the approach as valid, in that local authorities must receive the resources. However, I repeat the commitment that many members have made that this is not all over yet. We must see how the settlement works and we will need to reassure ourselves that the structures that have been haphazardly put in place respond to the needs of communities throughout Scotland.
Let me begin with Andy Kerr's final remark. There will be nothing haphazard about the arrangements that the Government puts in place to monitor the performance of local authorities and the implementation of the national outcomes. The Government has negotiated a concordat with COSLA that, for the first time, gives an agreed set of outcomes that both local and national Government are trying to achieve together. That will be translated into single outcome agreements, which are currently under development with local authorities. That work will be taken forward in advance of 1 April. I give that commitment to Parliament today, and I am happy for it to be scrutinised because the Parliament should be able to satisfy itself on how public money is spent.
Mr Kerr and others have implied that we are somehow handing over £11 billion with no ability to question how it is spent and what performance is delivered. I simply point out to them that, before the outcome agreements, the previous Administration merrily handed over £7 billion to £8 billion, ring fenced about £2 billion and had no ability to scrutinise the performance that that provided. We will be conducting a more comprehensive assessment of how work is undertaken.
Tavish Scott made a number of points and I will address first the question of regional transport partnerships. I had a constructive discussion with the chairs of those partnerships, and I was struck by their willingness to work with local authorities to bring to a point of agreement projects that have cross-boundary implications. That suggested to me that there is an ability to draw authorities together to a common purpose, and the Government will support such work. The regional transport partnerships provide a good model that can be applied to other subjects.
Mr Scott referred to the distribution formula. The Government inherited the report of the three-year settlement group, which was a joint venture of the Government and COSLA, and I have progressed several changes as a result. We are bringing much change into the system in one go, so it is important to have some stability in the funding formulas. We have provided that so far, but we will continue to monitor the distribution formulas in the period ahead.
Even in those circumstances, the situation is still worse for the north-east. Aberdeen City Council is bottom of the funding table. Under the previous formula, Aberdeenshire Council was getting closer to the funding average, but under the current formula we are now further away from that.
We have applied the funding formulas that we inherited. Aberdeen City Council is getting—
Will the cabinet secretary take an intervention?
Please allow me to deal with the first intervention.
On the basis of the floor calculation, Aberdeen City Council will receive a 4.12 per cent increase in its budget. That is an appropriate development of the funding formula.
I will address Alison McInnes's point about single outcome agreements. She accused me of unseemly haste in getting rid of ring fencing. That argument bewilders me. The previous Government talked about single outcome agreements and removing ring fencing for years, but it did not happen. I have been criticised for taking decisions too quickly. I am prepared to be accused of that, because somebody must speed the decision-making process over which the previous Government presided, and this Government is proud to have done so.
My intervention is about the cabinet secretary's reply to Mr Baker's intervention. The cabinet secretary said that he just applied the funding formula. If that is the case, why has the budget of Angus Council, in his constituency, moved from 97 per cent to 115 per cent of the Scottish average?
That is because of the application of the funding formulas, to which various factors apply, not the least of which are debt charges. I gently remind Alison McInnes that her party has more stake in the running of Angus Council than my party has nowadays, so I hope that she was not implying any inappropriate application of the distribution formula in that unwarranted intervention.
Des McNulty made a passionate speech about his constituents in West Dunbartonshire. I know how passionately he cares about all the implications of deprivation for people's lives. However, I must ask him who has been running Scotland for the past 10 years. Who has run West Dunbartonshire Council for many of the past years? Who has presided over a process that led the Accounts Commission for Scotland to undertake a two-day hearing at West Dunbartonshire Council to criticise how that authority has been run over many years? Yes—my party has taken over responsibility for that council, but the challenges and the mess that have been inherited from the Labour Party will not be solved overnight. Reading out a list of purported cuts that the council has not decided on is—to be most charitable—at least premature and at worst scaremongering.
That leads me to Lord Foulkes—scaremonger-in-chief in the chamber. Before any speech that he makes on a public platform, we should all be counselled to be afraid—be very afraid. A point was made about PPP support for school projects. The Government has added to the local government settlement for 2007-08 £29.7 million to support school PPP projects, and that is what the Government will deliver.
Finally, I pass on the happy news that North Ayrshire Council became today the first authority to freeze the council tax. It is a Labour minority administration.