Good afternoon. The first item of business this afternoon is a debate on motion S4M-09274, in the name of John Swinney, on the draft Local Government Finance (Scotland) Amendment Order 2014.
On 6 February, Parliament approved the draft Local Government Finance (Scotland) Order 2014, which enabled Scotland’s local authorities to set their revenue budgets for the forthcoming financial year, 2014-15.
Local authorities were asked, in return for the full funding package available, to agree to freeze council tax levels for a seventh consecutive year and to maintain teacher numbers in line with pupil numbers, while securing places for all probationer teachers who require one. I made it clear that if any local authority took the decision not to set aside funding in its 2014-15 budget to enable those two commitments to be fulfilled, that authority must have written to me before 10 March, setting out the position that it intended to adopt. I can confirm to Parliament that I have not received any such letters. In fact, the decisions that local authorities have arrived at are entirely consistent with the two points of commitment that I have just set out.
I am therefore pleased to say that all 32 local authority budgets contain provision to enable both of those commitments to be fulfilled. The continuation of the council tax freeze for a seventh year will be particularly welcome news for hard-pressed council tax-paying households across Scotland.
In view of the 2014-15 budget process having been concluded, the draft amendment order seeks approval for the payment of each local authority’s share of the £70 million that has been set aside to compensate councils for the council tax income forgone as a result of the continued council tax freeze.
Today’s draft amendment order also seeks parliamentary approval for the £274.4 million that represents the initial 80 per cent allocation of the council tax reduction scheme funding for next year. The arrangement of distributing the majority of the funding until such time as more up-to-date information becauseomes available has been agreed with the Convention of Scottish Local Authorities, which repeats the process that was first introduced for the current financial year. Linked to that, the amendment order also includes more than £7 million for council tax reduction scheme administration costs, which are distributed to local authorities.
There is also an extra £400,000 for councils as part of the establishment of the single fraud investigation service. Following receipt of more up-to-date information that was made available by the Department for Work and Pensions, we are able to reallocate the £20 million of discretionary housing payments money for next year on a more accurate basis.
It should be noted that the draft amendment order does not include the funding for free school meals and the extension of childcare to two-year-olds, as was set out in the debate in January, as discussions on the distribution of those sums are continuing.
Taken together, the changes will add almost £352 million to the amount of general revenue grant that we will be distributing to local authorities next year over and above the sums included in the original 2014 order. That means that the total revenue funding in 2014-15 will be almost £9.85 billion, and the overall total funding package, including capital, will be over £10.6 billion.
I take this opportunity to make one further adjustment to the 2013-14 revenue funding allocations since the draft Local Government Finance (Scotland) Order 2014 was approved on 6 February. Similar to the position with the 2014-15 financial year, we have received more up-to-date information from the Department for Work and Pensions, which enables me to distribute the £70.2 million that represents the 20 per cent of the first year of the council tax reduction scheme that we had held back until such time as we had sufficiently accurate and detailed information to enable us to distribute the resources on an accurate basis, local authority by local authority, to meet the needs of and demand for the council tax reduction scheme.
Those final additions mean that local government will have received a further £70.2 million this year, on top of the net increase of £20.4 million that was included in the February order.
Although it is not part of the amendment order, I take the opportunity also to update Parliament on the position relating to the distribution of the 2015-16 local government finance settlement. On 21 February, I wrote to all COSLA leaders, setting out that I was minded to approve COSLA’s proposal not to uprate the relevant indicators but saying that I considered that in the interests of transparency council leaders should be aware of the implications of such a course of action. I received the COSLA president’s reply on 3 March, in which he informed me that COSLA leaders had agreed collectively to reconsider their position at their meeting on 25 April, once they have had the opportunity to scrutinise the detailed calculations behind the two sets of figures. My officials have now provided COSLA with all the relevant information that is required to enable that consideration to take place. Further discussions are under way with COSLA in relation to those particular points.
I remain of the view that the needs-based indicators should be uprated. However, in line with the importance that I attach to our joint partnership working, I have indicated that I would be prepared to accept the COSLA leaders’ proposal not to uprate the indicators until after all local authorities have had the opportunity to consider the financial implications in a transparent way and in light of all the relevant facts.
I am aware that this distribution issue has been linked to a number of local authorities indicating a desire to leave COSLA. Membership of COSLA is a matter for individual councils to resolve. The Scottish Government remains committed to working in partnership with COSLA and we firmly believe that that is what people across Scotland would expect from both their central and local government organisations.
The approval of this amendment order will authorise the distribution of a further almost £352 million for 2014-15 and a further £70.2 million for this year to local government to support the essential services that our local authorities deliver for our communities. The approval of the amendment order today is absolutely vital, as the funding included in it has already been taken into account by local authorities in setting their 2014-15 budgets. The loss of over £422 million in funding would have serious consequences for all local authorities, the communities that they serve and the people of Scotland who rely on those vital services.
Given that I have not received notification that any individual local authority has not budgeted to fund the Scottish Government’s commitments relating to the council tax freeze and the maintenance of teacher numbers in line with pupil numbers, which I outlined earlier, I take that to mean that local government is satisfied with the overall funding package and the specific commitments that this Government asks for in return. A vote against this amendment order would go against the wishes of each and every local authority across Scotland and would deprive local authorities of over £422 million of essential services support to assist in the provision of education, social work services and the council tax reduction scheme and to protect those most at risk from the bedroom tax, as Parliament intended in its budget earlier this year.
I fully accept that in an ideal world of endless resources local government could make use of extra money, but I firmly believe that Scotland’s local authorities have been treated fairly. I think that my view was very clearly underlined by the chairman of the Local Government Association, Sir Merrick Cockell, who said following the 2013 UK spending review:
“Every year I meet my opposite numbers in Scotland, Wales and Northern Ireland and they listen to us in wide-eyed disbelief at the budget cuts we are enduring and they are not.”
The distribution of funding set out in the amendment order is essential to enable Scotland’s local authorities to implement their approved budgets.
I move,
That the Parliament agrees that the Local Government Finance (Scotland) Amendment Order 2014 [draft] be approved.
14:38
Last year when we discussed the local government settlement, I moved a reasoned amendment on the bedroom tax. Scottish National Party speakers completely ignored the Labour amendment. They made no reference to it in their speeches and they voted it down without a word. I moved that amendment last year because I had received briefings from my colleagues in local government about the impact that they feared the bedroom tax would have: playing havoc with their budgets and those of housing associations, and playing havoc with the finances of social housing tenants. They predicted that even tenants who had never been in debt would be pushed into debt, indignity and hardship. Their predictions, sadly, came to pass.
That is why we made sorting out the bedroom tax our top priority in this year’s budget, so we welcomed the deal that John Swinney agreed to. However, pressured local government faces real underfunding and centralisation. The key issues raised with me this year by local government colleagues are the underfunding of the school meals pledge and the pledge on extra childcare, and the long-running issue of rural schools. COSLA has made representations on all of those to the Cabinet Secretary for Finance, Employment and Sustainable Growth.
The common denominator in those three issues is the Cabinet Secretary for Education and Lifelong Learning. I hope that the finance secretary will ask his colleague to accept the reality of funding those new commitments and to work with COSLA to sort out the problems.
Last week, I asked the finance secretary whether he felt that it was acceptable to pit council against council with the estimates that he had produced on local government funding rather than address the yawning gap between the rising costs of local government services and the underfunded settlement that he proposes this year. He responded by challenging the figures that I quoted to him and demanding that I write to him to explain myself, yet he wrote to me within hours to correct the figures that he used in his reply.
We are voting today on an order that we cannot amend. However, we can raise concerns, and it is our job as the Opposition to do so.
If the member had the power to amend the order, from where would she take money to give local government more?
Commentators, research institutes and organisation after organisation have made the point that the SNP has left council finance in a completely unsustainable position. That issue must be addressed in fixing what is happening in local government.
Throughout the past year, I have challenged SNP assertions about local government finance. My questions have been formulated as a result of research and reports from the Joseph Rowntree Foundation, Audit Scotland, Unison and the Scottish Parliament information centre, among others. A raft of organisations is asking pertinent questions about the unsustainability of local government funding.
Nearly 40,000 jobs have gone from local government since the SNP came to power, and front-line staff are under increasing pressure.
Will Ms Boyack give way?
No, thank you.
There are the growing challenges of supporting people on low incomes, deprivation and providing care for the increasing numbers of older people who need it.
Last year, the finance secretary claimed that he had allocated a flat cash settlement in his plans in the autumn. However, analysis from SPICe of the year-on-year impact of the cuts—whether we take the period from 2008-09 to 2012-13, not including police and fire funding, or the period from 2007-08 to 2014-15—shows that, on the basis of its best estimate of the reality of the figures in relation to the general resource grant, local government finance has been hit. As the First Minister said today, we want to look not just at one year but at the general trend.
The real-terms cuts come when councils face a 10 per cent increase in costs. That does not add up. There is general underfunding, underfunding of the council tax freeze and specific underfunding this year of SNP education commitments.
COSLA’s partnership with the Scottish Government works only when the Scottish Government listens to and does not disregard the concerns that local government raises. I call on the Scottish Government to acknowledge the concerns that COSLA has raised, which it agreed to put to the finance secretary at a meeting two weeks ago, about the issues that I have put on the record today. The cabinet secretary has not addressed all the Issues that COSLA put to him. The figures that he has laid in front of us will not fix the progressive underfunding of local government or the centralisation that has occurred since the SNP came to power.
The SNP Government has a track record of denying that there is a problem with funding but, when it gets representations from people who say how bad its proposals are, finding more money to put into the pot—not enough, but a bit more. That is how the SNP has addressed underfunding in housing and colleges and how it has addressed the bedroom tax.
I hope that the debate will lead to the finance secretary responding more positively over the months to the representations from local councils and our constituents. The crucial point is that our constituents and local organisations have had to deal with the impact of cuts and service reductions across the country. People are finding that services no longer exist or that they cannot afford to pay for them and therefore cannot use them.
I hope that we will get a positive response from the finance secretary. He poses a challenge with his centralisation agenda, which is leading to the loss of jobs across the country and to increasing pressure on local authority staff. We need our local councils to be properly resourced, so that they can deliver the services that they were elected to provide.
I move amendment S4M-09274.1, to insert at end:
“but, in so doing, notes the concerns expressed by COSLA about the underfunding of local government, and calls on the Scottish Government to take further action to address the real and increasing financial challenges faced by local government due to increased cost pressures, including deprivation, demographic pressures and the underfunded council tax freeze.”
14:44
Like the Local Government Finance (Scotland) Order 2014, which we debated last month, this amendment order merely formalises the transfer of moneys already agreed by the Parliament and authorises the cash held back for the purposes of the council tax freeze. For that reason, the Scottish Conservatives will support the approval of the order, but the debate gives me the opportunity to flag up once again some of the difficulties that lie ahead.
As highlighted previously, we supported the council tax freeze at the time of its introduction, as it made a difference to so many hard-pressed families across Scotland. However, we recognise that maintaining it and providing our vital front-line services is increasingly proving a challenge for councils. For that reason it is very important that in future we have transparency in the funding of our local authorities, not least as taxpayers must be able to hold them to account, and to do that there must be full disclosure of which services are being prioritised and how councils are funding them, which is not presently happening. In that respect I have some sympathy with Sarah Boyack’s amendment.
However, it was when making that very point on transparency last time that I lamented COSLA’s performance in that regard. I remind Sarah Boyack that in its consideration of local authority funding as part of the budget process, the Local Government and Regeneration Committee gave COSLA the opportunity to give evidence and highlight any concerns that it had about the budget. That opportunity was squandered, a fact that we should not lose sight of.
I note that the cabinet secretary drew attention to COSLA’s strong partnership with the Scottish Government. However, COSLA’s record on working with other partners, including members of this Parliament, is a good deal less positive. In particular, its tendency to hide behind a veil of secrecy whenever challenged or asked for information is unacceptable. COSLA, as the representative body for local government, should lead by example in setting the tone for transparency and openness across government; it should not hide.
Since we last discussed COSLA in the chamber, West Lothian Council has become the seventh local authority to confirm its intention to leave the body, further throwing into doubt its future. The crisis facing COSLA must be in part a reflection of growing disquiet over local government funding in Scotland. As I have said before in the chamber, we cannot ignore the fact that councils are signalling their intention to leave, nor the implications of that. If more than a quarter of the population is not resident in a COSLA-represented council, COSLA cannot continue legitimately to represent local authorities when dealing with the Scottish Government. However, to date there seems little willingness on the part of the Government to accept that or make any contingency plans.
Aside from its legitimacy, COSLA’s credibility has also taken a hammering. As my Local Government and Regeneration Committee colleague and convener, Kevin Stewart, pointed out in relation to Aberdeen City Council last week, representatives of Labour-led authorities have been voting for the so-called flat cash settlement, which would see so many of them lose out—albeit that the position is to be reviewed in April. That is surely indicative of an organisation in which at least some members are putting the interests of their party before those of their local authority. The simple fact of the matter is that COSLA will cease to function as a representative body if that attitude is allowed to prevail.
However—with or without COSLA—there is a need for the Government to engage constructively with local authorities. It is true that the present crisis also stems from some councils’ belief that COSLA is being reduced to acting as a rubber stamp on Scottish Government spending plans rather than an organisation providing robust representation.
Accordingly, although I support the finance order that is before us today, I agree that we must be aware of the scale of the challenges ahead for both local authorities and the Scottish Government in reaching such agreement in future. Whether that future will feature COSLA will depend on whether the organisation stops being part of the problem and decides to become part of the solution.
14:48
The crisis at COSLA is a serious matter and I hope that the finance secretary will play a constructive role in ensuring that the wounds in the organisation and the rift between the organisation and the Government are healed. I do not think that anybody is really sure what the dispute is about; perhaps that will become clear over time. I hope that the finance secretary plays a constructive role in healing COSLA, because we need a robust local government organisation to represent local government across the country.
I stand here again to make my regular plea to the finance secretary to meet the manifesto commitment that he made at the last election: the commitment to Aberdeen City Council to meet the 85 per cent floor. It is sad that it takes a Fifer, yet again, to stand up to make the case for the great city of Aberdeen, but in the absence of SNP members from the city doing that, we need Fifers to do so.
Does Mr Rennie realise that the 85 per cent floor was in the manifesto because of MSPs from the north-east of Scotland, including the late Brian Adam? Beyond that, my colleagues and I continue to fight for what is best for Aberdeen—unlike the current Labour-led administration.
I would not find much in common with the Aberdeen Labour-led administration, but that is probably the only thing that I have in common with Kevin Stewart on this matter. Although he said that the commitment was in his party’s manifesto at the last election, there is no point—as we know—in making a manifesto commitment if it is not actually delivered, and it has not been delivered in this case.
The reality is that the removal of fire and police funding from Aberdeen City Council’s funding simply revealed how low the level of funding is for that city. That funding has now plummeted to 79 per cent of the average for Scotland. That is inadequate, and does not meet the manifesto commitment that John Swinney and Kevin Stewart made at the last election. It equates to £20 million, or £89 for every person in the city. When we consider the economic contribution that that city makes to the wellbeing of Scotland and the United Kingdom, we must consider that the least that it deserves is that the manifesto commitment that was made by the SNP at the last election is fulfilled in full. I remind members that 79 per cent is not 85 per cent and that the shortfall is £20 million. The funding is completely inadequate and the situation must be changed. That was the manifesto commitment on which Kevin Stewart stood and he must follow through on it.
When the cabinet secretary makes his concluding remarks, I would welcome an update about how the negotiations on funding for childcare and school meals are progressing. Obviously, I am anxious about those matters. They are close to my heart and I want to ensure that the funding for the roll-out of nursery education for two-year-olds is met in full. I am alarmed by some of the reports in recent days about the disputes between the Government and local government.
14:52
I have been following today’s COSLA and Improvement Service conference on Twitter—that is the kind of anorak that I am. One tweet said:
“Between 2007 and 2013 resources available to Scotland through settlement have increased by 6.4%”.
The subsequent tweet said:
“...over the same period, local government’s budget has increased by 8.9%. This demonstrates success...”
The speaker who was being quoted in those tweets was Councillor David O’Neill, the president of COSLA and a Labour councillor who recognises that this Government has delivered for local government in Scotland. If, as the cabinet secretary has already done, we compare that situation to the one south of the border, where budgets have been slashed dramatically, we can see that we are doing pretty well, particularly under the circumstances of austerity that come from the Tory-Liberal Democrat Government.
While I am on the subject of the fact that the Liberal demonstrationcrats are propping up the austerity measures, I say that I find it quite bizarre for Mr Rennie to stand here and pontificate about Aberdeen, given that, when his colleagues were in coalition with Labour in Holyrood, they refused point-blank to sort out the Aberdeen situation. At least this Government has put in place a fairer settlement for the city of Aberdeen and I, for one, will continue to fight for that. I point out that that settlement was put in place in the face of opposition from many others. Gordon Matheson was quoted in the Evening Times on 13 December 2011 as saying:
“As quickly as we work to protect schools, jobs and the vulnerable of this city the SNP Government bleed money away to other parts of the country for political gain. They have given up on Glasgow and decided to concentrate the nation’s resources on winning Edinburgh and Aberdeen for the SNP.”
The people of Aberdeen certainly do not think that. One of the reasons why we have a huge kerfuffle in COSLA at the moment is that, normally, a change in the indicator update would go through on the nod, but people from the central belt, backed up by colleagues from the north-east, are stopping that extra money—£7.5 million—from coming to Aberdeen.
The Labour-led council in Aberdeen should hang its head in shame for its part in that action, as well as for trying to ban ministers from going up there to try and help Aberdeen, and for putting out propaganda using council tax payers’ money.
I think that you are straying a bit, Mr Stewart. Can you get back to the motion?
It is all about council money, Presiding Officer, but I will get back to the motion.
Sarah Boyack’s amendment shows that she has clearly not listened to David O’Neill on the subject. I will repeat what he said. Between 2007 and 2013, the Scottish settlement has increased by 6.4 per cent while
“local government’s budget has increased by 8.9%. This demonstrates success”.
I am pleased that, as well as recognising the needs of local government, the Scottish Government has managed to freeze council tax for the seventh year in a row. That represents a saving, on average, of £1,682 for every household in Scotland. That is to be celebrated, and I support the cabinet secretary today.
14:56
Services that are delivered by local government across Scotland impact on people every day of their lives. That impact is crucial, whether it comes through social or education services. It is important to recognise the pressure that local authorities are working under. Although, as the cabinet secretary says, the Local Government Association and others in the south may say that it is a better settlement than they have got, it would be going a bit far to say that local authority leaders in Scotland are satisfied with the funding. That is not to say that the settlement is not better than the settlement in some parts of the country, but the fact is that local authorities are under massive pressure.
Right across the country, there is pressure on services because of the need to take children into care. In my local authority, Fife Council, there was a massive overspend last year because of the number of children who were taken into care. As the cabinet secretary said last week in answer to my question, part of the way to tackle that is to look at new ways of working, to pursue early intervention and to spend more money on the early years. I say to the cabinet secretary that, in my experience of local government, councils right across Scotland want to work in partnership with the Scottish Government.
Will Mr Rowley give way on that point?
I will continue, thanks.
The key point is that there must be recognition on both sides that the settlement still leaves local authorities in a really difficult position. Willie Rennie spoke about putting the case for Aberdeen as a Fifer. Over the next four years, Fife Council will face a £92 million budget gap. It is not the Labour administration saying that; that is what the executive director of finance has reported to the council, and the situation is the same in local authorities everywhere. Local authorities are working hard to balance the books and continue to provide services. In that spirit, we need to recognise that the settlement is still a very tough one for councils and that tough decisions will have to be made.
Cameron Buchanan spoke about the council tax freeze. Local authorities are saying that, at some point, we will need to find a way forward. COSLA has kicked off the review of how we finance local government and Labour welcomes that. There needs to be a discussion and debate about how we move forward in financing local government. The council tax freeze itself does not achieve equality; it promotes inequality because people with properties in band H save £1,535 while people with properties in band A save £258. Those who have the most have gained the most, and those who have the least have gained the least. At the same time, additional charges have come in for local government services and it is often the very poor and vulnerable in communities, such as the elderly and the housebound, who must pay those charges. That is a true picture of local government. Some of the Government’s decisions are creating greater inequality.
I hope that the cabinet secretary, although he may not agree to the Labour amendment, will work with local government and recognise that the settlement is very tough and that cuts will be made to services in every council regardless of who is in political control of it. I also hope that he will look for long-term solutions for the future of local government. Not to do that would be to let down the people of Scotland.
15:00
It is not long since Mr Rowley joined the Scottish Parliament and I do not want in any way to destroy his career at this early stage, but his was a refreshing speech that reflects the weight of experience that he brings to the Parliament from his leadership of Fife Council. I hope that he will acknowledge—I make the same point in response to Mr Rennie—that in the almost seven years that I have occupied this post and in which I have held particular responsibility for the Government’s relationship with local government, one of my highest priorities has been to ensure that that relationship is better than the one that I inherited. I accept completely Mr Rowley’s point that we will only succeed in addressing the genuine and substantial financial challenges that we all face—it is not just local government that faces those challenges—if we have a cohesive and agreed agenda on which we can maximise co-operation among all levels of government. I therefore reaffirm the Government’s determination to ensure that we work co-operatively and effectively with local government to agree those joint objectives.
Mr Rennie raised a couple of points about the dialogue on free school meals and childcare. I have seen the commentary that he mentioned. The foundation of the financial assumptions on the roll-out of childcare for two-year-olds is the Children and Young People (Scotland) Bill’s financial memorandum. I do not want to overstate the position, but I describe those assessments as having been co-produced between local and national Government. I am a bit surprised that childcare funding is an issue, given that we simply used the same approach that we used jointly with local government to agree to their satisfaction the assumptions in the Children and Young People (Scotland) Bill. That said, and in the spirit of the point that I made to Mr Rowley, I will say that there is space for us to discuss the issues on the roll-out of the Children and Young People (Scotland) Bill and the provisions on free school meals to ensure that, if there is an issue about financial support, we address it properly so that the commitments that we have made to the Parliament are fulfilled and implemented as we said that they would be.
Mr Rennie and I have rehearsed on a number of occasions the issues about Aberdeen. The one point that I want to lift from his speech is what he said about the “least that it deserves”. I do not know what the people of Aberdeen have done to deserve the administration that they have in the city. That is all that I will say antisocial behaviourout the matter.
That is democracy.
Mr Henry says that that is democracy. We remember how he used to lead Renfrewshire Council and that spoke for itself.
I will deal with the substance of the issue on the available financial settlement. Sarah Boyack returned to the same commentary about that. John Mason asked her where the extra money would come from and there was no answer. I will read to her from the speech that was delivered this morning by COSLA’s president in St Andrew’s house:
“Local government’s share of public expenditure has risen and when cuts had to be made in Scotland, local government has been relatively protected at the expense of other parts of the public sector.”
He went on to say—this relates to Mr Rowley’s point—that
“Council leaders must know that this year the actual resources they received are greater than predicted by directors of finance, the Centre for Public Policy for Regions, our own Improvement Service and others.”
I know that there are financial pressures. I have to deal with a budget that is reducing in real terms, but we have attached greater priority to support local government funding because we realise how important local authority services are. I commit to the Parliament to work with local government and COSLA to ensure that we maximise the effectiveness of those resources in meeting the needs of the people of Scotland.
Previous
Greener KirkcaldyNext
Welfare Reform