Local Government Finance Settlement 2011-12
The next item of business is a ministerial statement by John Swinney, the Cabinet Secretary for Finance and Sustainable Growth, on the local government finance settlement 2011-12. As always, the cabinet secretary will take questions at the end of his statement, so there should be no interventions or interruptions during it.
16:12
My statement to the Parliament will cover two areas. I will set out the terms of the provisional local government finance settlement for 2011-12. I will also report on the business rate poundage levels that we intend to set for next year.
The settlement is a central element in our relationship with local government, which is now into its fourth year. That relationship, which has underpinned the single outcome agreements that are in place for every community planning partnership in Scotland, focuses the work of national and local government on delivering for all our communities.
As the Parliament knows, we are facing the biggest reduction in public spending that any United Kingdom Government has imposed on Scotland. The draft budget that I presented to the Parliament last month addressed a financial challenge that is without precedent since devolution. In cash terms, the Scottish budget will be cut by £1.3 billion next year. Within that, Scotland’s revenue budget will be around £500 million lower and our capital budget will be £800 million lower.
In my statement on the draft budget, I highlighted the key role of our local authorities in delivering front-line services. I explained that we had agreed with the leadership of the Convention of Scottish Local Authorities a settlement for local government in 2011-12 that reflects our joint determination to protect those services as far as is possible.
The agreement that we and COSLA’s leadership have recommended to individual councils maintains local government’s share of the overall Scottish budget, provided that local authorities agree to deliver certain commitments. Those include a commitment to deliver the current single outcome agreements and the various social strategies that we have developed with local government, including giving every child the best start in life through implementation of the early years framework.
On school education, the package includes funding to maintain the pupil-teacher ratios in primaries 1 to 3 and measures to reduce teacher unemployment. It also provides for an extension of the council tax freeze into 2011-12; maintenance of the delivery of existing commitments on free personal care and work with local government to support carers; and maintenance of the total number of police officers at 1,000 more than before the Government took office.
However, the package is conditional. Although it has been agreed between the Government and COSLA’s leadership, it is now up to individual authorities to decide whether they wish to accept it. If they accept, their resource funding will reduce next year by an average of 2.6 per cent. That is a much greater degree of protection than applies in other parts of the budget, and it is superior to that for local government in England.
If authorities choose not to accept the package, their funding will fall not by an average of 2.6 per cent but by an average of 6.4 per cent. The 6.4 per cent figure is the average resource budget reduction in non-protected areas of the Scottish budget next year.
Those, in brief, are the terms of the agreement that we reached with COSLA’s leadership on the local government settlement for 2011-12.
Today I can announce the provisional funding allocations to individual local authorities for 2011-12. Copies of summary tables containing the key information in my statement are available at the back of the chamber. Assuming that all councils agree to the terms of the funding package that we and COSLA have jointly put to them, the total support for local government in 2011-12 will amount to £11.548 billion. That includes revenue and capital funding.
Under the previous Administration, local government’s share of the Scottish budget declined steadily, year on year. We halted that decline. Under this Administration, local government’s share has risen each year. It was 33.4 per cent in 2007-08. If the Parliament approves our budget, it will be 34.5 per cent in 2011-12.
Within the total that is available, support for revenue will amount to £10.9 billion in 2011-12. That includes a further £70 million to enable councils to extend the council tax freeze for a fourth year, and a further £20 million to honour the commitments on public-private partnership schools projects that were approved by the previous Administration. That support continues the removal of, or reduction in, business rates for the smallest businesses in Scotland.
Last year I reported to the Parliament the results of a joint review that was undertaken with COSLA into the needs-based grant distribution mechanism. The report concluded that the formula contained no inherent unfairness, and the Scottish Government and COSLA both accepted the report’s recommendations. Council leaders, at their meeting on 19 November 2010, just after my statement on the draft budget, agreed that the established distribution methodology should apply to the local government settlement for 2011-12. That is what we have done. As a result, if all councils accept the package that has been put to them, the average revenue reduction across all councils between 2010-11 and 2011-12 will be 2.6 per cent, with the range varying from 0.3 to 4.9 per cent.
If councils do not accept the package, however, the average reduction will be correspondingly greater. It equates to an average of 6.4 per cent across all councils, and the range by council varies from 4.5 to 9.2 per cent. Council leaders have been asked to let me know in writing by 21 December whether their council agrees to the full package according to the terms that have been set out.
The capital funding element for local government will amount to £700 million for 2011-12. This year, for the first time, we are providing the whole of that amount as capital grant. In past years, local authorities were provided with a mix of capital grant and support to enable them to borrow. By providing the whole amount as capital grant this year, we are freeing authorities from the costs of the associated borrowing that they would otherwise have incurred. They can now use the money that has been freed up to meet other priorities, including those that involve further boosting their capital expenditure.
In allocating the available capital grant among councils, we have maintained funding for specific elements within the total. We have therefore protected the funding allocations for flood prevention schemes that were approved earlier. That is why, for example, Moray Council, which has a number of significant flood prevention schemes under way, receives a smaller reduction than other councils in its overall capital support compared with 2010-11.
The reduction in grant compared with 2010-11 will clearly impact on different councils in different ways. We will work with local government to deliver on our shared commitment to protect and improve services, and we will make progress on the delivery of the national and local outcomes that are set out in the single outcome agreements.
I turn now to business rates. Ordinarily, I would confirm today the business rate poundage. The Government committed that, for the life of this parliamentary session, the poundage rate in Scotland would not rise above that in England. The UK Government usually announces the English poundage by around the end of November each year. It is late in doing so this year. I therefore regret that I am unable, in the meantime, to confirm the Scottish poundage rate, although I will do so as soon as possible after the rate for England is announced.
I can confirm, however, that the large business supplement will remain at 0.7p for properties with a rateable value over £35,000, excluding the largest retail properties.
I announced on 17 November 2010 that I intend to increase the business rates that are paid by the largest retail properties, including supermarkets and out-of-town retailers. When we compiled our draft budget for 2011-12 we decided that it would be wrong to raise council tax levels and to reduce the small business bonus scheme or the other business rate reliefs that are in place. However, we decided that we needed additional revenue from business rate taxation. We therefore turned our attention to the largest retail properties.
Our rationale is that many smaller independent retailers in town centres have to cope with higher relative rateable values than those of their out-of-town competitors. Their customers, too, often incur parking charges when they bring their cars into town and city centres. To that extent, such retailers can be at a disadvantage, particularly compared with the largest supermarket branches, many of which operate outwith town centres.
Of course, not all large retailers operate outside town or city centres. However, business rates currently account for just 2 per cent of turnover for the largest retailers, and even during the recession the supermarkets have reported higher profits. We took the view that, on balance, increasing the contribution that such large businesses make to local communities through their business rates could begin to redress the balance a little. It is only fair that they now make a greater contribution.
Today I have laid before the Parliament legislation that sets out how the large-retail levy will operate. Retail properties with a rateable value of more than £750,000 will pay a different level of large-business supplement, which will be stepped so that the properties that have the highest rateable value contribute most. I have kept our commitment to match the English poundage but I am applying a supplement to that poundage to a very small proportion of properties.
In total, the retail levy would raise an estimated £30 million in income in 2011-12, of which more than three quarters would come from the largest supermarket chains. We estimate that only around 225 occupied retail properties in Scotland, which represent about 0.1 per cent of all non-domestic property, will pay the levy. Overall, only 30 companies will pay a greater contribution to the local services that they receive from councils through business rates.
The additional resource can be used to maintain front-line services that councils provide to businesses and to contribute towards the cost of the small business bonus scheme, which has reduced or removed the rates burden for tens of thousands of small and medium-sized enterprises, including many independent town-centre businesses. The scheme has benefited 74,000 properties in Scotland. More than a third of all non-domestic properties benefit from a rates bill reduction through the scheme, and some 64,000 pay nothing at all and enjoy average savings of more than £1,400.
More businesses are benefiting from the small business bonus scheme this year. Jim Mather reported to the Parliament that he had visited the Ardmaleish Boatbuilding Company during the summer. Previously, that business, which supports 25 local jobs on Bute, including a number of apprentices, had not qualified for the small business bonus scheme. Following the revaluation and the uplift of the scheme, it now receives a welcome cash boost. I am pleased to confirm that, despite an overall reduction in the amount of resource that is available to me in 2011-12, I will maintain the small business bonus scheme at the same level in 2011-12 as it is at present.
Following the 2010 revaluation, the number of properties that are potentially eligible for the scheme has increased by 12 per cent, from 102,000 in 2009-10 to 114,600 in 2010-11. In light of such a significant rise in potentially eligible properties, we have taken steps to raise awareness of the scheme, to ensure that everyone who is eligible applies. This month, the First Minister is writing to 19,300 premises that could be eligible for the scheme, to encourage them to participate. That should further increase the number of recipients.
I expect that the small business bonus scheme will reduce the tax burden for Scotland’s small and medium-sized enterprises by an estimated £128 million next year—that is up on the estimated total of £117 million for 2010-11 and is by far the most generous rate relief of its type to be available in the United Kingdom.
I also confirm that we will maintain charitable and disabled persons relief at the same levels as in the rest of the UK. We will continue to offer more generous relief for empty properties than is the case in England, and our renewable energy generators will continue to benefit from the only relief scheme in the UK to reduce or remove the rates burden for that vital and expanding sector.
The budget allocations to councils that I am announcing today offer them a choice. If they opt in, they will have access to a funding package that is significantly better than that for local government in England and better than for non-protected areas of the Scottish Government. The settlement will include a further £70 million to enable councils to freeze council tax once again. I hope that all councils take up the offer and deliver a much-needed boost for hard-pressed families in these tough times.
Of course, councils will continue to face competing pressures on their budgets in 2011-12. That is why, through our on-going partnership, we will continue to work with local authority leaders to deliver on our shared commitments. That dialogue will continue as we look ahead to the challenges in 2012-13 and beyond.
Today marks the start of the normal consultation period with local government on the provisional allocations for 2011-12. I will bring the final figures to the Parliament as part of the debate on the local government finance order early in the new year.
The cabinet secretary will now take questions on the issues that were raised in his statement. We have until exactly 5 o’clock for those questions, after which we will come to decision time.
I thank the cabinet secretary for early sight of his statement. It is clearly more interesting for what it omits than what it tells us.
We will study in detail his proposal on a supermarket tax to assess what damage it will cause but, regardless of what statistical trickery he employs in the local government settlement, the cabinet secretary cannot disguise the fact that it is a bad package for our local councils.
As he has decided to threaten to cut budgets by 6.4 per cent if councils do not comply with his coercion, the cabinet secretary has removed the pistol that he has pressed against the heads of local councils for the past three years merely to replace it with a blunderbuss. So much for respecting local democracy.
In spite of the gloss that has been placed on the funding package, we should make no mistake about its consequences: police numbers will fall and teacher numbers will continue to plummet.
Ha, ha!
The Minister for Parliamentary Business may laugh but, as we see from press reports today, social and care services will be decimated by the settlement. The cabinet secretary can hide the figures but he cannot run from them.
Councils are presented as contributors to the national purpose and five strategic objectives but no data are presented to validate those assertions. Will the cabinet secretary produce a performance report on those outcomes since 2007 so that proper assessment can be carried out?
The cabinet secretary claims partnership working with councils on targets and outcomes, so will he explain why, overall, the national performance framework reports progress on only three of the 11 purpose targets and 19 of the 45 national performance indicators?
No costings are provided for spending commitments on policing and teacher numbers, unlike in the 1999 to 2007 format, so will Mr Swinney explain why that vital information is missing?
The table on specific grant funding has been removed. With £1.1 billion of spend, including police grant, it is essential to scrutinise the reality of the cabinet secretary’s policy assumptions. Will he now produce the table on specific grant funding?
Mr McMahon contradicted himself in asking me to publish a performance report on national outcomes by then citing the performance report on outcomes, which is available any day of the week—24/7—on the Government’s website. It is under “Scotland Performs”, and all the indicators that are part of the national performance framework are updated regularly when new statistical information appears, in line with a statistical protocol that is agreed by statisticians and not ministers. Therefore, a performance report on outcomes is currently available on the Government’s website.
There will be a number of indicators that demonstrate that performance is not what we want it to be. I readily concede that. For example, performance on the business start-up rate, which has either been updated or is about to be updated, shows that performance is not improving. That is a matter of concern for the Government. We are working to support improvement in business start-ups and have set out initiatives to try to do that, so that information is publicly available.
Mr McMahon made a number of remarks about the agreement between the Government and the political leadership of COSLA. It was not immediately obvious to me which parts of that agreement he objected to. The agreement provides, for example, for the maintenance of 1,000 extra police officers on Scotland’s streets. I am not sure whether the Labour Party agrees or disagrees with that; it is an interesting point. I am also not altogether sure whether Mr McMahon agrees or disagrees with the council tax freeze. I cannot keep up with the Labour Party’s thinking on that.
The proposed package reflects the priorities of the Government and local authorities and takes account of the financial reality that I must face, which Mr McMahon’s questions skirted past. Whether I like it or not, the Government’s resource budget will fall next year. I have addressed the question of what we will do to take account of that. I have made my decisions and published them in the draft budget. I have not heard from Mr McMahon or any of his colleagues what change they would make to any of that.
Show us the figures.
Mr McMahon says, “Show us the figures.” I have published a document that runs to about 200 pages and which has loads of numbers. He made a point about the individual grant distribution. One change to local government finance that we delivered was the abolition of a substantial amount of ring fencing that constrained local authority activity and built in inflexibility and inefficiency. As a consequence, local authorities have more flexibility to deal with the financial challenges that they face. That is why I hope that, in a difficult financial settlement, local authorities will endorse the approach that the Government has agreed with COSLA’s political leadership.
I, too, thank the cabinet secretary for early sight of his statement. We Conservatives certainly welcome the intention to freeze the council tax for a further year and the commitment on police numbers.
The cabinet secretary’s statement did not make clear the consequences for individual local authorities should they choose not to accept the deal that is on offer. If any local authority chooses not to accept the offer, where will the resource that it is assumed will be allocated to it end up? Do contingency plans exist for spending that money elsewhere?
Given how much the cabinet secretary made of preserving the share of the budget that is given to local government, will the longer-term indicative figures that he will produce after Christmas show that that share will be maintained, will increase or will decline?
Mr Brownlee’s first question was about where resources in the settlement would be allocated if local authorities did not accept the Government’s proposal. The Government would decide on that in the light of any such response by local authorities. I hope that we do not have to address that scenario.
As for the share of the Scottish Government’s budget in the longer-term plans, as I explained to a number of members yesterday, the Government will consider in detail all questions that relate to the numbers and publish that information before the stage 1 debate in January.
The very mention of the word “concordat” used to raise a cheer from the Government back benches, but it has not even been used today.
The definition of a negotiated agreement is warped when more than £300 million will be held back unless council leaders write to the Government by 21 December to say that they will do the Government’s bidding. It was curious that, although John Swinney ended his statement by saying,
“Today marks the start of the normal consultation period”,
he said that council leaders had to write to him by 21 December to say that they would do what the Government wanted them to do.
In 2009, the Government said that the 5 per cent increase in Scottish business rates would be damaging, so it allowed businesses to defer payment, which was to provide
“vital breathing space in these tough economic times.”
Given that next year’s inflation increase is set to be 4.6 per cent, will the Government provide the same mechanism for deferring payments?
Will such a mechanism be detailed in the questionable letter from Alex Salmond to 19,300 businesses? Given the lack of a transitional relief scheme and the fact—which the statement failed to mention—that 80 per cent of properties that pay rates are appealing their valuations, perhaps he could include an apology to businesses.
My final point on business rates relates to John Swinney’s announcement in his budget statement of a surcharge on out-ot-town retailers. Now he has clarified that it cannot be applied only to out-of-town retailers, so it will hit Princes Street, Sauchiehall Street and Union Street. Is not the imposition of a Princes Street penalty an odd thing to do, given that when the figures showed that retail was performing worse in Scotland than it was in England, Jim Mather called for more powers to help retail? The Government is to use its own powers to charge retailers more.
Mr Purvis makes a number of points about the Government’s relationship with local authorities. I stress to him that, as I made clear in my statement, the Government attaches significant weight to the arrangements for joint working that exist between local government and national Government. The various social strategies embody such joint working, which is a product of the concordat between the Government and the local authorities. If Mr Purvis is at all concerned about the issue, I assure him that the Government’s relationship with local government is extremely healthy. I appreciate the dialogue that we had with local authorities across Scotland over the summer.
Mr Purvis asked about the business rate inflation increase. As I made clear in my statement, I am reserving the Government’s position until the UK Government has announced what the poundage rate in England will be. I am determined to maintain the Government’s commitment to ensuring that the core business rate poundage is no higher in Scotland than it is in England.
I am not quite sure that I understood Mr Purvis’s inference when he asked about the “questionable” letter from the First Minister. I would have thought that if a business property that was not receiving business rates relief got a letter on the issue from the First Minister, realised that it was eligible and made a saving as a result, it might welcome that letter, but maybe I am wrong. The businesses that I speak to tell me that they really value the small business bonus scheme, but I know that the Liberal Democrats have never been particularly supportive of that concept.
A number of issues exist in relation to the levy that I am to apply to large retailers, the rationale for which I explained in my statement. Despite the economic difficulties, the performance of retailers remains strong. In these times, the Government must identify how it can raise additional revenue and face up to the spending cuts that have been imposed on us by the Conservative and Liberal Democrat Government in London.
I was pleased that the cabinet secretary confirmed that he will continue to provide funding for the small business bonus scheme, which helps to support some 1,500 businesses in my constituency. I know from my discussions with many of those businesses that they greatly value the scheme, even though it is opposed by the Labour Party and the Liberal Democrats.
How does the cabinet secretary’s proposed financial settlement for local government in Scotland compare with the settlement that the London Government has proposed for local authorities south of the border?
I welcome Mr Matheson’s comments on the small business bonus scheme. I know that he has been active in promoting it in his constituency and encouraging businesses to participate in it.
As far as the comparison between the settlements for local government in Scotland and England is concerned, the core local government settlement in England involves a comparative reduction of in excess of 7 per cent. The numbers speak for themselves. The settlement that has been offered in Scotland has taken due account of the significant role that local authorities play in the delivery of front-line services to members of the public.
The cabinet secretary’s statement majored on the delivery of outcomes, but it did not set out how councils will deliver those outcomes. He tells us that there are lots of numbers in the draft budget documentation, and on page 201 we have got the grant figures for 2010-11. However, the cabinet secretary’s statement still does not give us figures for 2011-12. For example, the police grant was £968 million last year, but we do not know what the current figure is. Against that background, on police officer numbers, and bearing in mind the fact that different police authorities started at different baselines and have progressed at different rates, how will each individual council’s contribution to police authority budgets be decided? How will progress on police officer numbers be monitored?
One of the obvious points that must be acknowledged about how local government contributes to the delivery of outcomes is that that will vary from authority to authority. One local authority area might face more of a challenge with drug and alcohol abuse, for example, than another authority does, and it will contribute to an outcome on that in a different way, depending on the circumstances. It is absolutely right that that should be the case.
Mr Kelly also asked about the police grant and councils’ individual contributions to the preservation of police numbers at 1,000 more than there were when the Government came to office. That is a matter for negotiation between individual police boards and the relevant constituent local authorities.
Police numbers will be monitored in exactly the same way as they are monitored just now. A statistical publication comes out every three months that sets out the number of police officers in Scotland. That is the basis on which we can determine whether the Government is reaching its objective of having 1,000 more police officers than we had when we came to office. That publication will chart that information in future also.
On the large retailer tax, how many bands will there be and what will the thresholds be within those bands? Has a business impact assessment been carried out on the large retailer tax? Does the cabinet secretary think that any jobs will be lost or not created as a consequence of the tax?
There will be five bands, beginning with a rateable value threshold of £750,000 and going up to the highest band, for rateable values in excess of £2,140,000.
I have given detailed consideration to the issues surrounding the tax, including the potential impact on the economy. I made my remarks about the motivation for imposing it on that basis. As I explained to Mr Brown in committee yesterday, my judgment is that, because the tax represents a minor proportion of the financial health of major retailers—business rates typically account for around 2 per cent of the turnover of large retailers—I do not consider that the measure will have significant economic impact.
The offer to local authorities of only a 2.6 per cent cut has more strings attached than there are in a string quartet, and many councillors have described it as unworkable. Will the cabinet secretary explain how the maintenance of 1,000 more police officers can be assured, especially given the number of councils that are involved? If even one police board reduces police numbers, are the other councils expected to pick up the slack or be penalised?
The cabinet secretary recently confirmed to the Finance Committee that he has £100 million underspend this year, which he will transfer into additional capital spend. Will he confirm today that councils will get a share of that?
If Alison McInnes will forgive me, I will spare her a reflection on the politics and leave it to local authorities to decide whether they want to participate in the Government’s proposals.
The position with police numbers could not be clearer. Today we have in excess of 1,000 more police officers than we had when the Government came to office. The approach that each police authority must take is to maintain staffing levels at a comparable level to the position today and to put financial arrangements in place with their constituent local authorities to enable that to happen. That seems to me to be a pretty orderly way of going about things.
The, um—
Underspend.
Thank you—sorry, I had a momentary lapse.
Alison McInnes asked about the underspend. Local authorities will not get a share of the allocation for the simple reason that it is underspend that they have not contributed to. Local authorities may retain any underspend that they have within their reserves; that is not clawed back by Government. The £100 million underspend—or carryover, as I would more accurately call it—that has been taken into 2011-12 has been identified from budgets that are exclusively under the control of the Government and do not relate to local authorities. I think that that is a fair approach.
I have fulfilled my commitment to local government to maintain the share of the capital budget that they command at 27.6 per cent. That has been honoured, and the money available to local government from the schools development project is in excess of a 27.6 per cent share of the capital budget.
Will the cabinet secretary assure me that he will keep the funding formula under review? Can he confirm that the reduction in revenue grant to Aberdeen City Council is under 1.6 per cent? What assurances has he received so far from local authorities that they are willing to sign up to his offer?
I am aware of Mr Adam’s long-standing interest in the distribution formula. It is an issue that he has pursued assiduously on behalf of his constituents with both my predecessors and me. As he knows and as I said in my statement, we considered the distribution formula once again, and I have made it clear to the authorities that have expressed concerns about it—principally Aberdeen City Council and Aberdeenshire Council—that I will consider any issues of unfairness that they wish to draw to my attention.
Aberdeen City Council’s budget reduction will be 1.59 per cent, which compares to a Scottish average of 2.59 per cent. That is a product of the distribution formula.
I said that I would pass on Alison McInnes’s more political remarks, but let me return to them. It is a little rich for me to be criticised for budget reductions when I am simply addressing the consequences of decisions taken by the Conservative and Liberal Democrat Government in London.
The minister has set a deadline of 21 December for councils to agree the deal, but his side of the bargain is to consider a number of changes to teachers’ terms and conditions that COSLA has asked for, or other changes that achieve savings of the same value, and to have a decision by the end of January next year—a month later. Considerable sums of money are involved. Can Mr Swinney tell Scotland’s 32 councils today how he will achieve his side of the bargain so that they can make an informed decision by 21 December—or do they have to plan for even deeper cuts to services to balance their books?
I will just address a point that I did not address with Mr Adam: a number of authorities have already expressed to me their intention to accept the Government’s proposals.
On Mr Whitton’s comments, I think that local authorities have all the information that they require to take an informed decision. The agreement struck with the COSLA leadership makes clear the Government’s commitment to work with local government to deliver the savings that are required in relation to teacher employment and terms and conditions. The Government will fulfil its side of the bargain.
Given that local authorities south of the border have seen planned annual budget reductions of an average of 7.25 per cent, does the cabinet secretary believe that the 2.6 per cent reduction that has been offered to councils in Scotland will better protect services and represents a strong deal when looked at against the massive cuts that are being handed to England and Scotland by the Lib Dem and Tory Government in London?
The Government has clearly established as a priority, and recognises the importance of, adequate and effective funding for local authorities. One of the points that I have been keen to stress, which is reflected strongly in the budget document, is the importance of the contribution that local government makes to the strength of local economies. Equally vital is the expenditure that we deploy through the health service. The decision that we have taken about the extent to which the local government funding settlement should be protected is a measure of the importance that the Government attaches to supporting local economies in every part of Scotland.
Last week, official statistics revealed the second-lowest number of new houses being built in Scotland since 1981. I am sure that many people will be disappointed that today, in a statement on local government finance, the cabinet secretary has made no reference to, and has given no explanation of, the reduction in next year’s housing budget. Shelter and the Chartered Institute of Housing Scotland have calculated that the housing budget is receiving a 34 per cent cut, which is one of the biggest. Does the cabinet secretary regret the housing budget that he has allocated? Does he recognise it as a huge blow to homeless people and many construction workers? When might we expect more detail on the housing and regeneration budgets?
After that question, I am left wondering whether Mary Mulligan was worried about those matters when the Labour Government was making such an unholy mess of the United Kingdom’s public finances. That, regrettably, is what we are all having to face up to—[Interruption.]
Order.
Labour members have suddenly sprung into action with the usual muttering because they do not like being reminded of the truth. Let me remind the Labour Party of another truth: the housing budget is not falling by the numbers that Mary Mulligan is talking about. Our capital budget has been cut by the Conservative and Liberal Democrat Government operating—
It is Shelter saying that, not me.
I think that Mary Mulligan should listen to this point. The Conservative and Liberal Democrat Government is cutting our capital budget by 25 per cent, but it is simply carrying on the capital budget cuts that the Labour Party produced. I cannot criticise the Conservatives and Liberals for that, as it is the responsibility of Mrs Mulligan and her colleagues. Our capital budget is falling by 25 per cent and the housing budget in Scotland is, regrettably, falling by the same amount.
Of course, I would like the housing budget to be larger. However, if I increased the housing budget, one of Mrs Mulligan’s colleagues would complain about some other capital budget being cut to pay for that. At some stage between now and 9 February, the Labour Party will have to tell us what it will support or not support in the budget and what changes it would make to the financial provisions that the Government is putting in place.
I very much welcome the support that the council tax freeze has given to hard-pressed families since the SNP Government came to power. How much has the average family saved under the Scottish Government’s council tax freeze? Will the cabinet secretary give us an assurance that he will continue to do everything in his power to minimise the burden that is placed on families throughout Scotland by that unfair tax during these difficult times?
The average band D household in Scotland has saved £322 a year because of the council tax freeze, which is a welcome contribution to household finances around the country. Of course, I give Mr Maxwell my assurance that I will do all that I can to maintain that approach. That has been an implicit part of the settlement for local government that we have put forward, and I hope that local authorities will agree to co-operate with us in that respect.
I listened carefully to the cabinet secretary’s statement and I am disappointed that low pay in the local government sector has not been addressed. Can he really be satisfied with a situation that means that a worker who earns less than £21,000 for looking after an elderly person in a hospital setting will receive a protective payment of £250 while their equivalent who looks after an elderly person in the community setting will not? Given that a Tory-led Government in England—which we have heard much of today—will ensure that low-paid workers right across the public sector, including those in local government, will receive the £250 protective payment, why can we not expect the same of an SNP Government in Edinburgh?
I might stand to be corrected on this point, but I think that Duncan McNeil is giving the Conservative Government in London more credit than it is entitled to, because I am not quite sure that the £250 payment will be applied to local authority employees south of the border. In light of Mr McNeil’s remarks, I will check to see whether I am correct on that point—I hope that I have put enough caveats on the record.
Local authority remuneration is, properly, a matter for local authorities to determine within the financial settlement that has been made available to them. Their ability to support low-paid staff is made a great deal easier by a budget settlement that reduces the budget by only 2.6 per cent compared to the much more significant reductions that are taking place in English local government and other parts of the public sector in Scotland.
Having had an opportunity to look briefly at the figures that the cabinet secretary referred to, I believe that this looks like a favourable settlement for West Lothian. Could he confirm my mental arithmetic, which suggests that there is a reduction of only 0.35 per cent in that council’s budget?
Given the severe weather that we have had this week, I want to ask about winter maintenance budgets. Last year, West Lothian budgeted for £2.2 million but spent £3.9 million. Can the Government accommodate hard-pressed local authorities in any way, particularly if not all local authorities sign up to the generous settlement?
Angela Constance highlights the fact that there is a range of reductions in local authority budgets, which is driven by the distribution formula. That formula is underpinned by population, which is growing in West Lothian. I confirm that the West Lothian budget is reducing by 0.32 per cent. However, there will be greater demands on the council as a result of increased population.
The Government has maintained the national routine and winter maintenance budget in the financial settlement that is proposed to Parliament. I appreciate that the burdens of winter maintenance, last year and this year, are significant for local authorities. I allocated an additional sum of money to local government in the spring of this year to take account of the additional costs that local authorities had to meet last year and, of course, I will keep the issue under review.
West Lothian Council contributed considerably to the maintenance of the subsidiary road network over the past few days, when the M8 was closed. I wish to put on record the Government’s appreciation of the co-operation that was displayed by the staff of West Lothian Council in maintaining a number of routes, which allowed movements between the east and the west of Scotland on the local road network when, unfortunately, the M8 was affected by the significant challenges that we faced earlier this week.
16:58
Meeting suspended.
17:00
On resuming—