Local Government Settlement
The first item of business is a statement by Angus MacKay on the local government settlement.
On a point of order. This morning I contacted my colleague Kenny Gibson, asking to see a copy of the minister's statement, which he had in his possession at 9 o'clock—but he refused to let me see it. Apparently, Labour back benchers are complaining that they are not seeing statements in advance, whereas spokespersons in other parties are. I am a member of the Local Government Committee and I think that I have a right to see the statement in advance along with my colleague. Can you do something about that?
The answer is no, I cannot do anything about that because it is not a point of order for me. I am informed that, as a matter of courtesy, the Executive gives advance copies of statements to the spokespersons of the Opposition parties and it is not expected that they be handed on further. That is an arrangement between the Executive and the parties and has nothing to do with me in the chair.
With Fergus Ewing's consent, I will steer clear of freedom of information this morning and stick to the local government settlement.
Since devolution, the Labour-Liberal Democrat Administration has demonstrated its commitment to strengthening the partnership between local government and central Government, to providing a sound financial platform to support modern and effective public services, and to ensuring that all Scotland's citizens are able to share in those benefits. I am therefore delighted to be able to announce our grant allocations to local government, which will provide record levels of support for every local authority in Scotland.
Local authorities will be notified of their provisional allocations by Executive circular today. Tables showing the settlement allocations for each council will be available from the Scottish Parliament information centre desk at the back of the chamber following the statement. Copies of the circular will also be available from SPICe. For the first time ever, the allocations cover not just 12 months, but will give councils the certainty of knowing their grant allocations for the next three years. Local authorities will therefore have the stability to plan their budgets and council tax levels, and the resources to achieve real and sustained improvements across the full range of their service responsibilities and to make the necessary investment in local infrastructure. I will also announce today the provisional national non-domestic rate poundage for 2001-02.
The spending review announcement earlier this year provided for the most sustained improvement in total support for local government in decades—an additional £1.2 billion over three years. By far the largest part of those additional resources will be directed to individual local authorities through the revenue grant and capital allocations that I am announcing today. Total revenue grant will increase by 6.2 per cent next year and by a further 5.4 per cent and 3.8 per cent in the following two years, to a total of more than £6.5 billion—increases of more than twice the rate of projected inflation in the first two years, and higher than the rate of projected inflation in the third year.
The single allocation for councils' capital investment will also receive a significant boost. For next year, the allocations total more than £311 million—an increase of more than 24 per cent. By the third year of the settlement, the total will have risen again to almost £350 million. I intend to say more about what can be achieved by local government with those substantial increases. However, I would first like to set out the structure of the settlement and say how the allocations for individual authorities have been arrived at.
I recently detailed to Parliament the new financial partnership that we have established with local government covering three-year grant and council tax levels, guaranteed grant increases for every council, a simpler and fairer distribution system, greater flexibility for councils in setting their total spending levels, and an increased focus on service outcomes. Those improvements are reflected in today's announcement.
In previous years, although three-year figures were available for total local government support, individual local authorities were advised of their allocations for one year only. The three-year grant allocations that I am announcing today for both revenue and capital will assist all local authorities to plan their budgets better and to provide their local electors with certainty about their tax commitments.
We want all Scotland's citizens to share in the benefits of improved local services and infrastructure. In the past, the local government settlement announcement has sparked debate about the relative winners and losers from the annual cycle of distribution reviews. Those discussions distracted people from the real issue of how local authorities could make the most effective use of their resources.
The distribution system was so complex that my predecessors had to announce four different sets of figures for each council. Few people understood the distinction between those figures. The system was also unfair. From year to year, individual councils could lose grant support as a result of changes in methodology or data. The first that they would know about that was in the December immediately before the April when the changes would happen.
We have made the system simpler and fairer. It is simpler in that what I am announcing today is the total revenue grant figures that each local authority will receive. Those are the figures that they will use to plan the budgets on which they will consult their electors. We are making it fairer in that individual local authorities will be able to plan for changes in their grant allocations over a longer time scale. In addition, the substantial additional resources provided from the spending review have allowed us to ensure that every local authority in Scotland will receive a real-terms increase in grant support.
In each of the three years of the settlement, we have provided a minimum grant increase guarantee or floor. For next year, every local authority in Scotland will receive an increase in revenue grant of at least 5 per cent—twice the predicted rate of inflation. For the following two years, the minimum grant guarantee will provide increases of at least 4 per cent in the second year and 3.4 per cent in the third year. The minimum grant guarantee is easy to understand and it is fair. It will ensure that no local authority is unduly disadvantaged relative to other councils in terms of its total grant increase. It also provides for a far more stable distribution of grant between local authorities over the three-year settlement period.
The substantial additional resources provided from the spending review and the guaranteed grant increase are the key elements that will influence councils' relative grant increases over the next three years. That has reduced the relative importance of the distribution formula. The existing distribution system for revenue grant has been developed over many years through detailed consultation between central Government and local government. We agreed with the Convention of Scottish Local Authorities that it was right to anchor the new arrangements to the existing formula.
I am aware of speculation about other distribution options and whether they would take more account of specific factors, particularly deprivation. However, it is a myth that a different block and formula style distribution would have taken more account of deprivation. The aim of the new arrangements is to simplify the existing formula. The simplified formula that we use will continue to take account of those factors that have been identified as the key influences on local authorities' relative spending needs, including population levels, sparsity, urban pressures and deprivation.
The Executive is committed to working with local government to tackle the causes and consequences of deprivation. This year, with COSLA, we carried out a thorough review of the account taken of deprivation in the distribution system. That study was based on evidence from councils and reviewed by independent consultants.
Following the recommendations of the review, additional support is being provided within the formula to assist local authorities dealing with high levels of deprivation. For example, the consultants recommended an increase in the teachers-for-deprivation assessment of between 30 and 40 per cent. We agree with that, and have increased support for that factor by 40 per cent at the upper end of the recommendation to £41 million next year, with further increases built in for years 2 and 3. A range of other assessments to help local authorities to tackle deprivation within the population distribution formula have also had specific increases.
The effect of seasonal employment patterns on the data used in the distribution formula to measure deprivation has also been taken account of. That is of particular relevance to rural authorities.
The concerns of our cities, especially those experiencing high levels of deprivation, cannot be dealt with by the local government finance settlement alone. The ability of the Executive and its partners in local government to eradicate poverty and deprivation will depend on stronger joint action to bring to bear the full range of resources at our disposal. To assist our joint work on deprivation, we plan a series of discussions with leaders from each of Scotland's cities and from some of our near-urban authorities on how to meet their aspirations. That fits well with our commitment to the role of councils in community leadership. Separate arrangements will give new impetus to our relationship with cities, in parallel with arrangements through the national rural partnership for examining the challenges faced in rural areas. We aim to maintain an on-going dialogue with all councils. The important point is that substantial additional resources are being provided for local government as a whole. The minimum grant guarantee will ensure that every council—rural, urban or other—benefits from those resources.
The distribution arrangements will take into account the results of a number of other distribution reviews completed this year. Following a major review of the special islands needs allowance, account has been taken of the additional costs faced by mainland councils with some island-based populations. That is in addition to the support that is already provided to the three wholly islands authorities. A number of other reviews have been completed this year, all of which have been fed into the formula calculation for next year.
The impact of those reviews explains in part the slightly wider range of increases in the first year of the three-year settlement period. Local authorities will receive increases of between 5 and 8.7 per cent from this year into next. That is worth repeating—local authorities in Scotland will receive increases in total revenue grant support of between 5 and 8.7 per cent next year.
For years 2 and 3, the distribution formula will be updated using population projections, to ensure that councils that need to provide additional services to growing populations will have the resources to do so. The floor will ensure that councils with declining populations still receive above-inflation increases in grant. Without the annual process of reviews, the distributions are far more stable. Increases range between 4 and 6.3 per cent in 2002-03, and between 3.4 and 6.2 per cent in 2003-04. That means that for each of the three years of the settlement, every local authority in Scotland will receive a real-terms increase in grant.
One element of the Scottish Executive grant support to local government is income from non-domestic rates. Today I am announcing the provisional non-domestic rate poundage for 2001-02. Last year we set out to conduct the 2000 revaluation of non-domestic rates with minimum turbulence for business. That is what we aimed for and that is what we have achieved. We also gave a commitment to hold increases in the non-domestic rate poundage to no more than the increase in the retail prices index, save in exceptional circumstances. I am pleased to announce that next year's provisional non-domestic rate poundage will be 47p, which represents an increase smaller than the increase in the retail prices index.
That is very good news for Scottish businesses. We consulted business interests before deciding on the rate. Today's announcement demonstrates that we have listened to the concerns of business by keeping the increase to below the inflation rate. That will provide for further stability for business. A paper explaining how the provisional poundage has been calculated will be published on the Executive website and is available from SPICe.
I am also mindful of the concerns of small businesses. I intend to make a further announcement later this month about the point that we have reached in our consideration of a small business rates relief scheme.
In previous years, besides announcing the settlement allocations, we would have advised local authorities of the assumed average annual increases in council tax that are built into the settlement and guideline calculations. Last week, I confirmed that we will not issue explicit guidelines for local authority expenditure. We expect councils to continue to show restraint in setting their council tax levels and to take account of benefit implications, which impact on the assigned budget. However, it will be for each local authority to set its council tax level, taking account of what local electors are willing to accept.
Today I am also announcing the capital allocations that will support local authority investment in local infrastructure for the next three years. As with the revenue settlement, we will provide a guaranteed increase in capital allocations between this year and next. No local authority will receive an increase in its capital allocation of less than 20 per cent. Allocations will simply be uprated for the following two years, so that councils will receive the percentage increase that corresponds to their formula allocation for 2001-02. By 2003-04, the total allocations will have increased by nearly 40 per cent. That is a 40 per cent increase in the single allocation that local authorities spend according to their assessment of local needs.
There will be further support for local authority capital investment through the public transport fund and the strategic waste fund, and from resources set aside for priorities such as school buildings and flood prevention. Where they have not already done so, colleagues will make separate announcements about those allocations.
It is important that we focus not only on the raw statistics that I am announcing today—the percentage increases and grant totals—but on the good that those resources can do for the communities and people of Scotland. My ministerial colleagues have already made a number of announcements about specific policy initiatives that we are working with local government to deliver. The substantial provision that we are making available today will enable local authorities to make significant improvements to care services for older people, to increase police numbers to record levels, to improve education opportunities for our young people and the physical environments in which they learn, to provide free, local off-peak travel for older people, and to make substantial additional capital investment in the local road network. Those are just some examples of the real improvements that can be achieved through the increased allocations. By far the largest part of the allocations is not ring-fenced for specific purposes. It is for each local authority to consider how best to use the allocations to meet its commitments.
In addition to the allocations that I am announcing today, separate strategic funding will be made available for a number of other initiatives. Those include additional support for deprived communities, better-integrated services for vulnerable children and local improvements in waste management. In due course, separate announcements will be made about each of those funds.
Copies of the provisional allocations for each local authority should now be available at the back of the chamber. The Parliament will have the opportunity to debate the final allocations in the local government finance order early next year.
I hope that members will acknowledge the substantial additional support that the Executive is providing for local government over the next three years. The allocations reflect our aim for a simpler and fairer distribution of grant that will provide real improvements in the quality and range of local services and increased investment in local infrastructure, from which all Scotland's citizens should benefit.
The spending commitment marks a step change in funding for councils in Scotland. The additional money is available for investment because of the outstanding success of the UK Labour Government and Gordon Brown's economic policy. The spending announcements have been made possible by the Labour and Liberal Democrat Administration's support for local government. Today we present councils with a positive challenge—not how to cut budgets, but how to invest the real-terms increases. From Fife to Falkirk, from Aberdeen to Ayrshire, the Administration is delivering more money for better services, more financial stability for councils and council tax payers and more autonomy for councils. This is a very good day for councils and for everyone who relies on the services that they provide.
That was inevitably a long and detailed statement, so I will allow questions to run on until about 10.15.
I thank the minister for providing me with a copy of his statement an hour ago. I have guarded it with my life.
I came here this morning hoping to hear from Santa Claus in pre-election mode. However, although Angus MacKay may not quite be the Grinch that stole Christmas, he is not quite the man in red either. Notable omissions from his statement were extra statutory responsibilities and new burdens that may be imposed on local government that would also have to be paid for through the additional resources that were announced earlier today.
Despite the above-inflation increases that Mr MacKay gleefully announced, will he concede that there is still a long way to go before local government again enjoys the resources that it had before reorganisation and prior to the massive hikes in council tax that were endured following that Tory-inspired debacle?
Will the minister explain what the settlement will mean, in relative terms, for local authorities such as Glasgow, Inverclyde and Dundee? Does he agree with Charlie Gordon, leader of Glasgow City Council, that the rejection of the block and formula system, which is advocated by local authorities that are in the greatest need, will mean that Glasgow loses £10 million of much-needed resource and will place an additional burden on the hard-pressed council tax payers of that city and similar authorities?
Does the minister agree with Councillor Gordon's view that the Executive decision on the funding formula over the next three years means that
"ministers would be seen as walking away from their own social justice agenda"
and that
"the Executive is failing to recognise the impact of poverty on the delivery of services like social work and education"
having been browbeaten by more prosperous local authorities?
Does the minister accept that a simplistic reallocation of additional resources, primarily on a population basis, will inflict a disproportionate burden on poorer councils? Those areas often lose employed skilled residents and are left with a higher percentage of the socially excluded population which is desperately in need of higher- quality services.
When will capital allocations again reach the levels, in real terms, that they were a decade ago? Will we be able to question the minister on his pre-Christmas announcement on a small business relief scheme, or will it be leaked to the media through another planted question?
That was a satisfyingly muted series of questions from Kenny Gibson, which tells me that the announcements that we made today are a substantial change on previous years for local government.
I invite Kenny Gibson either during questions—I am not sure whether he is allowed back in—or at some other point in the day to apologise to me for suggesting on Radio Scotland this morning that I am refusing to intervene in the local government pay dispute because I am a Unison-sponsored MSP. I am not a Unison-sponsored MSP. I am sure that Kenny Gibson will clarify that matter.
You were.
No. I have never been a Unison-sponsored MSP. Kenny Gibson has a spade; he should keep digging.
Kenny Gibson raised several important points about the settlement, especially to do with Glasgow. I will address them face on.
It beggars belief that anybody could cavil at or complain about a settlement for local government that amounts to a 10.5 per cent increase over the next three years. It is not just the extra money, welcome though that is—I speak as someone who was a finance convener in local government—it is the stability of knowing that the settlement is over three years. That flexibility, with the additional money, allows local government to make decisions, not about cutting budgets but about investing in real-terms increases. That is what will make such a difference to people.
I will address the specific points about Glasgow. If Kenny Gibson is advocating that we should have gone back to a block and formula system rather than a population system as a method of distributing the local government settlement, he had better explain to Shona Robison, who I understand is a predominantly Dundee-based MSP from his party, that that system would have left Dundee—a city with serious deprivation problems in anybody's terms—worse off than will the population-based system that we have adopted.
There is a fundamental difference between how the two systems deliver for deprivation. The population formula does not distribute resources simply on the basis of the number of bodies in a local authority area; it is a matter not of how many people there are, but of what kind of people they are—whether they are elderly or young—and what kinds of services they require. The population formula reflects deprivation. More than 13 assessments in it relate to deprivation and cover more than £600 million of expenditure. This year, more than £85 million was redistributed between authorities specifically because of deprivation-related indicators.
If we had adopted a block and formula approach, Glasgow would have received £3.9 million more over the three years of the settlement than it will under the population approach. However, we have not taken simply the population approach. We have taken the population system plus the minimum threshold. That gives Glasgow £16 million more over the three years than the block and formula approach would. I will repeat that for the hard of hearing. The block and formula approach gives Glasgow an additional £3.9 million, but beyond that £3.9 million what we are doing with the population approach and the minimum floor gives Glasgow an additional £12 million plus over three years. That is a good deal for Glasgow. It is a good deal for every authority in Scotland.
I now call Keith Harding.
It would be helpful if you pressed the button.
It is pressed.
It is normal to press the button if you want to be called, but I knew that you wished to speak.
I had pressed the button.
No, you had not. On you go now.
Thank you, Presiding Officer.
I thank Mr MacKay for giving me the statement an hour ago. I spent the hour reading it, not writing a speech.
Everyone agrees that local government finance is somewhat complicated. Three-year budgeting is a welcome initiative, but the way Angus MacKay has announced it today has not made local government finance simpler. While we in Parliament will take time to dig out the details of the statement, the public will be none the wiser. We welcome much of what is in the statement, but the devil will be in the detail.
Given that the minister has not mentioned McCrone, pay increases or new burdens and pressures that have been brought about by ring-fenced spending, does he agree that his plans will ultimately result in more cuts in essential services or yet more years of well-above-inflation council tax increases?
I am left almost speechless by Keith Harding's contribution. It is so far removed from reality that it would have given me some concern if I had not heard some of his previous speeches when we have given good news and the Conservatives have had difficulty welcoming it.
If the worst thing that the Conservatives, or anyone else, can say about the local government settlement is that it does not appear to make understanding local government finance easier, I am happy to take that kind of criticism. The truth of the matter is that the settlement has led to substantial increases for local authorities. The idea suggested by both Keith Harding and Kenny Gibson, that there are secret, hidden burdens—neither of them has identified what they are—that will impact on the settlement is a nonsense.
An element for McCrone money is built into the increases. We have said all along that we must wait on the outcome of the McCrone negotiations. If additional money is required, the Executive will find it. We have said openly that this year's settlement allows for inflation. It allows an element, for the first time in many years, to help to fund pay increases. That is no bad thing and it is not hidden.
We have adopted a formula that gives a good distribution—
I am not sure that I am allowed to take an intervention.
No.
We have adopted a formula that has a good distribution for every council in Scotland. For members to be crying "Bah, humbug", especially at this time of the year, makes it clear what their position is.
May I ask another question?
All right, I will let you in again. Your question was very short. [Members: "Oh, come on."] His question was very short.
Is the minister saying that, as a result of the budget settlement, there will be no cuts in essential services in councils throughout Scotland?
I get a bit concerned when former councillors come at the debate in those terms.
I am still a councillor.
Oh, dear—that is even more astonishing. I get a bit concerned when councillors ask questions about what the settlement will mean for specific local government spending decisions. When I was a councillor, I spent much of my time arguing that central Government should not interfere in such decisions or in pay negotiations between the trade unions and employers. We cannot say that we want to increase autonomy, abolish guidelines and give flexibility on council tax and then add, "By the way, we also want to tell you how to spend your money." Each authority will have to consider how it spends its real-terms increase in funding and what it does with its new-found autonomy and flexibility with the council tax. I am sure that local electors as well as MSPs will be interested in how local authorities readjust to the challenges of investing real-terms increases instead of making cuts, which is something that became quite familiar under the Conservatives.
As someone who was a councillor in Fife for 17 years before being elected to the Scottish Parliament—
Is the member that old?
I am.
And I thought that he was a sweet young thing.
Thanks.
I welcome the statement. Indeed, this is the first time that a local government settlement will be welcomed by every council in Scotland. That is good news for local government in Scotland and recognises the priority given to the issue by the Liberal Democrats—and, indeed, by the partnership. It makes a refreshing change from the many years of cuts that were imposed on local government by the Conservatives—
Could we have a question, please?
Does the minister share my disappointment at the response from the SNP and the Conservatives, who fail to recognise the many good things in the settlement, including—for the first time in many years—the increase in capital expenditure that will start to reverse cuts? Moreover, will he give us more information on his proposals on support for the small business rates relief scheme, on which he intends to make an announcement later this month and which will be good news for rural areas? Finally, does he share my disappointment that the SNP yet again talks about increasing money for Glasgow but does not tell us from which Scottish councils it would take that money?
Iain Smith asks whether I share his disappointment at the response of the SNP and the Conservatives. That is a tough one. My colleagues and I—and the rest of wider Scotland—will not fall over with surprise at their response. We heard the same muffled responses and saw the same upset-looking faces when we made the announcements about the contracts for Govan. Opposition is a tough business, but I am sure that the SNP and the Conservatives will have many years to get used to it.
I do not want to go into too much detail on the small business rates relief scheme, as there will be an announcement on it later this month. However, today's announcement on non-domestic rates poundage is extremely good news for business. The level is certainly lower than people expected and is below the projected rate of inflation, which must be good news for businesses facing pressure from a range of costs. I hope that we can give significant help to small business when I make my announcement later this month. After we conclude the statement, my colleagues and I will be working hard on that. I cannot say too much about the detail today, as that would prejudge the announcement.
As many members want to ask questions, I appeal for short, sharp exchanges. I call Michael McMahon.
Mr Michael McMahon (Hamilton North and Bellshill) (Lab) indicated disagreement.
Oh, sorry. I call Patricia Ferguson.
Patricia Ferguson (Glasgow Maryhill) (Lab) indicated disagreement.
No? Scott Barrie.
Scott Barrie (Dunfermline West) (Lab) indicated disagreement.
Trish Godman.
Trish Godman (West Renfrewshire) (Lab) indicated disagreement.
Bristow Muldoon?
Bristow Muldoon (Livingston) (Lab) indicated disagreement.
Call me! [Laughter.]
On a point of order, Presiding Officer. Under the circumstances, perhaps you should try some of the other parties.
You have a fair point, Mr Salmond. A Labour member has not yet asked a question, which is why I was looking for one. I will now call Andrew Wilson.
Allow me to speak for the Labour party on this matter, Presiding Officer.
The theme of the minister's statement appears to be that local government under him will not be as bad as it was under Jack McConnell and that things are at last getting better, despite the past three years of pain under the Labour Administration. However, when the minister talks about autonomy, does he mean that local authorities will have greater or lesser responsibility at the end of the three-year period than at the start for raising the money that they spend? Furthermore, will we still have the highest-taxed businesses and the highest council tax rates in the UK at the end of this period? Given that the minister said that he
"expects local authorities to . . . show restraint in setting their council tax levels and to take account of the benefit implications",
will he let us know which councils will be allowed to increase their take-up of benefits through council tax and housing benefits faster than the rate of take-up in the UK? By how much will they be allowed to increase that take-up?
I thank Andrew Wilson for that extended request for the introduction of guidelines for local authorities. However, I will not be tempted. Under this Administration, local authorities will be granted increased autonomy, because we believe in subsidiarity, whether it applies to devolution and the creation of a Scottish Parliament or to local authorities. Indeed, that is not a policy that the nationalists are noted for supporting.
Andrew Wilson asked some specific questions. We have told local authorities that we want them to be mindful of the effect of benefits on council tax levels when they set those levels. However, we cannot say that local authorities should set council tax and then set guidelines on what is or is not acceptable. I have said repeatedly that council tax levels are a matter less for negotiation between the Scottish Executive and individual authorities than for discussion between those authorities and their electors. That seems a significantly more important dialogue to get under way.
As for UK comparisons on local government autonomy and council tax levels, I have to say that, when I was a finance convener in a local authority, I was not concerned about how Edinburgh or Scotland compared to the rest of the UK when local government allocations were made. I was concerned about whether we were receiving enough money to deliver the services on which people in this city depend. If we were not receiving enough money, I was concerned; if we were receiving enough, I was reasonably happy that we could get on and do the job. This settlement gives every local authority in Scotland real-terms increases in each of the next three years. It will enable them to know the levels of expenditure and support that they will receive from the Executive over that period. That gives unparalleled stability and flexibility to every council in Scotland. They will not be concerned about the kind of question that Andrew Wilson has asked, because that is not what determines how they conduct their business.
I welcome the statement and in particular the allocations for Argyll and Bute Council and for Highland Council, whose additional costs for serving island communities have been taken into account for the first time. Will the minister continue to review deprivation indicators, given that they tend to focus on urban areas and miss rural deprivation?
Many rural and island authorities are concerned—as are all councils in Scotland—that the distribution mechanism should properly assess the particular challenges that they face in their areas. Councils in city areas are concerned about deprivation, as well as other factors, and rural councils are concerned about sparsity, islandness and so on. A working group is examining some of the issues that Rhoda Grant has raised and I am certainly happy to give an assurance that we will continue to consider some of the outstanding factors.
Although the three-year settlements will provide stability to local government, it is important that the distribution mechanism that we have used for those settlements is allowed to bed in over that period. As time goes on, we can have a debate about which distribution mechanism will be most appropriate after those three years. We can also have a debate about how deprivation—however it is measured in different parts of Scotland—should be taken into account not just in local authority allocations but by the various other funding streams that the Executive has directly or indirectly to hand, including enterprise companies, health expenditure and the future of the better neighbourhoods fund. I am happy to give the assurance that we will take those factors into account. We would be happy to enter into dialogue about them.
I know that the minister is dishing out a lot of pre-election goodies, but can he guarantee that schools such as Airdrie Academy—which is in crisis, as the main block has been closed and the pupils are being bussed all over the place—will have the resources to do the job? As schools are insured only for accidental damage, not for deterioration, is provision being made for a contingency fund to take care of emergencies due to the deterioration of buildings as a result of wear and tear and the long legacy of underfunding?
Gil Paterson raises a precise point. I cannot deal with the specific circumstances of that school and that local authority, but I can reassure him on the general position of North Lanarkshire Council. The cumulative increase that North Lanarkshire Council will receive for the three years of the spending review is 16.8 per cent—which is higher than the Scottish average of 16.2 per cent—with a 7 per cent increase in the coming year. That is a significant step forward and is substantially more than twice the projected rate of inflation.
In respect of capital, which will impact most directly on the issue that Gil Paterson raises, North Lanarkshire Council will also receive a 42 per cent increase over the three years of the spending review. That will effect a substantial change in the capacity of that local authority to address capital investment in infrastructure projects of the type that Gil Paterson has mentioned.
As someone who was elected to represent a constituency in Dundee, who lives in Dundee and pays the council tax in Dundee—unlike those members who claim to be Dundee based—I warmly welcome the minister's announcement of a grant settlement that is significantly above the rate of inflation. I also applaud his announcement that he will meet the leaders of city councils throughout Scotland. Can he reassure me that those discussions will leave open the possibility of negotiations on further change, especially concerning distribution and deprivation? Although three-year settlements have many advantages, they have the great disadvantage that any injustice or unfairness that is built into year 1 will be perpetuated in years 2 and 3.
I am pleased to receive that question from the directly elected representative of one of the constituencies in Dundee. I know that John McAllion has strong concerns about the city and the challenges that it faces. I also know that Dundee could have a bright future if the agencies that are working together for the betterment of Dundee and the Executive get their act together to produce some focused action. I shall visit Dundee soon, with the First Minister, to discuss with the leader of the administration and others a number of issues relating to Dundee and the way in which we might move forward.
I am happy to give the assurance that, in all our discussions with the leaders of city authorities, near-urban authorities and rural authorities, we will leave nothing off the table. We will want to hear what their concerns are and how they believe that we can best make progress. We will make a case for the best position that we think we can advance to assist those authorities and we will try to identify specific courses of action to secure material benefits not just for the local authorities, but for a range of other organisations, specifically to help the people who live in the area.
I am sure that when we conduct that meeting in Dundee—which may be next week or the week after—we will rule nothing out of discussion. I hope that we will have a fruitful discussion of the way in which Dundee City Council will be able to spend the real-terms increase that this announcement will bring to the city.
The minister has had a fair stab at making out that the Executive is no longer a centralist-style Government. The proof of that will emerge over the years.
The minister said that there was an element of funding for the McCrone recommendations and that, if there were further requirements, he would pay for that funding. Is that a firm commitment to pay for the implementation of the McCrone recommendations?
As Andrew Wilson pointed out, the minister also said that he expected local authorities to show restraint in setting council tax levels. Does he have a scheme to interfere behind the scenes? Will he establish a benchmarking scheme for the performance of councils that consistently fail to deliver public services? Will he confirm that he will monitor the way in which the money is spent throughout the system?
The minister mentioned police numbers, but gave no specific figures or cash limits. Further to his grandiose comment about roads and the infrastructure of local authorities—he will be aware that Aberdeenshire Council and Aberdeen City Council have major problems in that respect—will what he does in total this year be more than what has been announced in this morning's statement?
I am not sure that I fully understood Mr Davidson's last question, but I shall try to deal with the others.
The settlement already allows for an element of funding for implementation of the McCrone recommendations. Crucially, the spending requirements for those recommendations depend on the outcome of on-going discussions and negotiations. The trade unions will want to ballot their members on the outcome of those discussions. We will examine what is recommended in those conclusions and we will consider what additional resources may be required. If the settlement is right, the payment will be right, but we cannot prejudge the outcome of the discussions.
Significant steps forward have been taken this year on policing. Mr Davidson will know that additional in-year funding was introduced for all local authorities in Scotland. He will also know that the Scottish Drug Enforcement Agency has provision for up to 200 additional officers, of whom 100 will join local forces. Jim Wallace and I have repeatedly stated that there is now sufficient funding in the system to employ near-record numbers of police officers in Scotland. That is a significant achievement, which should be welcomed by every community in Scotland, as every community in Scotland stands to benefit from it. I am delighted that the settlement that I have announced today will go a substantial way towards realising that objective.
How often must I say that this Administration does not want to issue guidelines to local authorities on the setting of council tax levels? The whole point of moving away from guidelines and giving local authorities flexibility in setting council tax levels is to enable authorities to judge whether council tax should be increased to assist with expenditure or whether it should be decreased if taxation at the existing level is not required. Unless we leave it to local authorities to exercise that judgment, we will impose guidelines by another name. We do not have such a back-door scheme.
One of the key reasons why we are able to adopt that approach is that, over the past two or three years, Scottish local authorities have exercised great prudence in setting council tax. We welcome that and recognise the responsible approach that local government throughout the country has taken. We have entered into a partnership with local authorities and I hope that all members of this Parliament will join in that partnership.
First, will the minister give an assurance that, if more money for public expenditure is made available by the UK Government—as we hope that it will be and think that it should be—local government in Scotland will get its fair share? Secondly, although his efforts to allow more freedom for local government are welcome and contrast with what is happening in England, I hope that he will give the greatest priority to developing schemes for measuring outputs and using them to get rid of ring fencing.
Donald Gorrie is absolutely right to talk about schemes for measuring outcomes of local government activities. As I said in a previous announcement, we want to move away from ring fencing, or hypothecation, which represents approximately 10 per cent—a small proportion—of local authority budgets. However, for such a small proportion of budgets, it represents a disproportionate amount of grief between local authorities and central Government. We will consider pilot projects to measure outcomes. If and when those pilots are successful, we will move away from the current approach of ring-fencing in some areas to give the maximum flexibility to local authorities in the delivery of services.
I am delighted that Donald Gorrie acknowledges that the Labour Government at Westminster is likely to introduce more resources from which Scotland will benefit. Although I cannot give a guarantee that any specific department will benefit directly, discussions must take place in Scotland about the way in which that money should be distributed between departments and different policy priorities. Donald Gorrie can be reassured that local government will make its voice heard loudly and that it has some strong champions in the Executive.
Why does the minister deny that there are hidden extra burdens on local government? That has been the central case that COSLA has put over the past few years—perhaps COSLA has withdrawn its support for the minister.
The minister said that the McCrone recommendations will be partially funded. Will he say how much of the local government settlement is for that partial funding?
The figures that we have been given include the first example that I have ever seen of a finance table that does not present the figures in real terms—after allowing for inflation—and does not include the previous three years' figures as well as the three years to come. Has that been done to exaggerate the size of the increases and to disguise the low base on which the settlement starts?
I am sorry that Mr Salmond has difficulty understanding the tables. If he feels that there is insufficient information in them, he is, of course, perfectly at liberty to lodge parliamentary questions or to ask oral questions. Further information will be made available to him. [Interruption.] I am sorry, Presiding Officer—I cannot help but be slightly mirthful when I hear Opposition members scrabbling around somewhat pathetically to find negative aspects to such a positive settlement.
I point out to Mr Salmond that the COSLA finance spokesperson called on the Executive to make an award in excess of £1 billion in the three-year spending review. That is precisely what we have done. The spokesperson has said that that is what COSLA asked for and that it is what it got. That hardly betokens COSLA having serious concerns about the settlement.
On McCrone, I cannot give a specific figure today for the element that is allowed for the recommendations. Mr Salmond's first question was why I have denied that there are hidden burdens in the settlement. The short answer to that is that I have not.
I welcome the minister's detachment from the Michael Forsyth era, during which Scottish Westminster MPs had persistently to transport their begging bowls to Westminster. We have moved on from then.
What measures are being taken to tackle the problem in Glasgow, where an ever-decreasing council tax base is expected to support an economic infrastructure such as that which supports so many other local authorities?
As I said in my statement, the cities and the near-urban authorities face particular issues—as is the case for all local authorities. There are geographical issues that are specific to individual local authorities, such as whether they are urban or rural authorities. We want to have a dialogue with the leaders of the city authorities and the near-urban authorities to address the specific issues that relate to deprivation and the distribution mechanism, as has been mentioned. We also want to discuss with them other infrastructural problems that they face, such as transport funding.
We acknowledge that local authorities have specific issues that they want to raise. It is not always possible to ensure that all voices are heard in the discussion about distribution mechanisms. That is why we want to have continuing dialogue with each type of local authority. That will allow us to get to the heart of their concerns and to look in the medium term at how to address those concerns.
I thank the minister for his statement. I want confirmation on the Argyll and Bute settlement. The figures seem to show that Argyll and Bute will receive an increase of about £39 million over the next three years. In his statement, the minister said that the special islands needs allowance was contained in that. Will he confirm that that is the case?
Argyll and Bute Council put in a bid for extra level playing field support for waste management through a public-private partnership. Will the minister confirm whether any action has been taken to address the council's concerns on that? The council requested between £1.3 million and £2 million to help to support that project.
I can confirm that Executive officials have been examining closely the waste management scheme in Argyll and Bute. We intend to look sympathetically at the issue that George Lyon raises. I know that figures of the magnitude that he mentions—between £1.3 million and £1.9 million—have been quoted. Our officials are conversant with those figures and will examine them closely to establish what the actual requirement is before making a decision on funding.
The cumulative increase for Argyll and Bute over the next three years will be about £18 million. Those are significant additional resources for the local authority. I can confirm that in the coming year, for example, the increase in funding for Argyll and Bute will be 6.3 per cent—more than twice the rate of inflation. I also confirm that the figures include an element for the special islands needs allowance.
I have allowed the debate to run on well beyond the allotted time. I apologise to the four members whom I have not been able to call to speak, but I must protect the time that has been allotted for this morning's main debate, which is on sea fisheries. I ask members who wish to speak in that debate to press their request-to-speak buttons. On the spat between Mr Harding and me, I can say that he did press his button, but his name did not register because his card was not properly inserted in his console. We were both right.