Local Government Finance Settlement 2008 to 2011
The next item of business is a debate on the local government finance settlement from 2008 to 2011.
The settlement is a con—a concordat con that will lead to service cuts in communities throughout Scotland. Many members will not believe me, but let me give just one quotation from our national media:
"Council Tax Smokescreen Masks SNP's Bonfire of the Pledges".
That is exactly what we have here. Those are not my words—they are from a headline in The Times of 15 November, and there are many others like it.
The broken promise is becoming the hallmark of the Alex Salmond-led minority Administration. In its manifesto, the Scottish National Party promised an additional £2.2 billion for local government; in real terms, it has delivered less than £500 million. We will hear a lot today about the tight settlement, but let us be clear about that, too: it is double the budget that was available to Donald Dewar. It rises to more than £30 billion and it is more than 99 per cent of what Mr Swinney assumed in his manifesto.
For accuracy, the increase in resources that is provided in the block grant from Her Majesty's Treasury is 1.7 per cent per annum over three years. Mr Swinney always says that it is 0.5 per cent, but the Scottish Parliament information centre says 1.7 per cent. I know who I believe.
I also want to put on record my disappointment and grave concern that the budget documents that have been made available to us contain a greatly reduced amount of information on key local services. In effect, an £11 billion budget has been reduced to just three lines. Such a change in approach should have been discussed and agreed with the Finance Committee prior to its introduction.
It is not only the Scottish National Party's manifesto that is in tatters. As we have seen in the committees throughout this Parliament, its budget is also falling apart under the scrutiny that has been brought to bear on it in Parliament and beyond.
As we all know—and the people of Scotland know—the SNP made an explicit pledge to the Scottish people during the election campaign that it would increase police numbers by an "additional" 1,000. For "additional", now read "equivalent" and for "1,000", now read "500"—a clear broken promise.
The First Minister promised to reduce class sizes in primaries 1, 2 and 3 to a maximum of 18 by 2011, but no new money has been provided in the settlement for local government to meet that pledge. When asked in this very chamber whether every local authority will be required to show year-on-year progress towards that target, Alex Salmond said, in his usual arrogant but ill-informed manner:
"Yes. It is item 4 in the agreement with COSLA, which states:
‘Local government will be expected to show year on year progress toward delivery of the class size reduction policy.'"—[Official Report, 15 November 2007; c 3465.]
That statement led us all to believe that the pledge will be met and that local government will be expected to show year-on-year progress.
Even yesterday, the Deputy First Minister said:
"We intend to deliver all our manifesto commitments over the Parliament's four-year session."—[Official Report, 12 December 2007; c 4296.]
However, the Convention of Scottish Local Authorities says that that target will not be delivered in this session; in fact, it completely disagrees with the Government's position. At last week's meeting of the Education, Lifelong Learning and Culture Committee, the SNP councillor Isabel Hutton from COSLA said:
"we did not sign up to deliver the commitments in the concordat in this session of the Parliament."
In relation to class sizes in particular, she said:
"the concordat did not say that there would be a reduction in class sizes within the current session of Parliament. COSLA did not sign up to that."
That is another clear broken promise by a Government that is shaping up to blame local government for its failures.
On nursery provision, the SNP promised to increase the number of hours by 50 per cent. However, the budget and the concordat indicate that that pledge will not be met, as insufficient money is being made available—again, a clear broken promise. Moreover, COSLA told Parliament that
"no specific amounts of money were assigned to any commitment in the concordat."—[Official Report, Education, Lifelong Learning and Culture Committee, 5 December 2007; c 415, 416, 421]
Of course, as we know, the list of broken promises goes on: from sports facilities to kinship care and additional support needs for children, we see big promises broken and people being let down.
It is shameful that families with disabled children are victims of the concordat con. In the comprehensive spending review, the Treasury allocated £340 million for disabled children in England and Wales. That money was to empower children and their families, improve access to childcare for families with disabled children and deliver a significant increase in the provision of short breaks for severely disabled children. Labour backed the every disabled child matters campaign for the corresponding £34 million consequential money to be spent in Scotland. However, SNP minister Adam Ingram has said that it is a matter for Scottish ministers to determine how the money should be spent, so there is no commitment that the £34 million that parents and families have fought for will reach them.
Today, at First Minister's question time, Alex Salmond said that the money was contained in the funding of the concordat that has been agreed with COSLA. As the First Minister well knows, there is no specific indicator in the concordat relating to children with disabilities and neither is it one of the outcomes of the concordat. Therefore, it is not a stated priority.
The member's complaint is about the spending of Barnett consequentials in respect of funding for disabled children. My understanding of the Labour manifesto was that all the consequentials were to be spent on education. If that was to be the case, how could Labour have also spent the money on disabled children?
Quite simply, we would have used our budgets to ensure that we did not have the projects and the manifesto commitments that the SNP have brought to us, which are clearly ill thought through, ill defined and ill costed. We would have spent that money more wisely.
It is important that Mr Kerr clarify his answer to Mr McLetchie. When he launched Labour's election manifesto, Jack McConnell said that every penny of consequentials above inflation would be spent on education. If that is the case, how could what Mr Kerr is talking about have been delivered by Labour if it had been re-elected?
First, in terms of the approach that Labour was taking to Scottish society, we intended to work through our nurseries, primary schools and secondary schools, to invest the money in education and ensure that those institutions used their money more wisely—money that the SNP is throwing about in a disorderly fashion.
I seek to make progress on holding the Government to account for its broken pledge to people in Scotland. When the First Minister was asked where the £34 million is, he said that it is with local government, under the concordat. However, when, following his statement, the Cabinet Secretary for Finance and Sustainable Growth was asked the same question, he refused to answer it. I suspect that the answer is that the money has been taken away from families with disabled children and put into the local government budget.
Is it possible for local government to deliver the £34 million if there is growth of only £175 million? Both the cabinet secretary and I know that the rest of the money is taken up by the council tax freeze and inflation. Will the Scottish Government write to all local authorities to insist that funding for families with disabled children be prioritised? How does that compare with other priorities in communities? Families who have fought for that money have seen it taken away from them by the Government, which is abdicating its responsibility to disabled children and letting down thousands of Scottish families who fought hard for the money that has been made available. That is the concordat con at its worst.
At every question time, we hear ministers say, "Don't worry, the concordat will take care of it. It's all in the concordat," but we know fine well from the funding arrangements and the budget that the money is not available to local government. The jointly signed concordat is intended to represent a commitment to local democracy, but that is an unduly rosy assessment. When the concordat is stripped down to its financial essentials, the revised framework increases local government's financial dependence on central Government, as it increases the proportion of expenditure that is funded by grant. The concordat asserts that the settlement halts the fall in local government's share of the Scottish budget, but closer inspection shows that £210 million-worth of the growth in funding is simply to support the council tax freeze which, as others have mentioned, means that people in more expensive homes will pay less and those who are less well off will pay more.
As Pat Watters said at last week's meeting of the Finance Committee,
"neither the cabinet secretary, the First Minister nor COSLA can freeze council tax".—[Official Report, Finance Committee, 4 December 2007; c 180.]
After looking at the matter more closely, Professor David Bell said:
"it is largely more affluent individuals that gain most in money terms from a council tax freeze … Those in household income deciles 1 and 2 (the poorest 20% of households) do not gain at all from a council tax freeze."
In other words, the freeze as it is currently proposed is regressive. Only Mr Swinney could have come up with that plan, which punishes those in society who are least well off. He has done that again in the announcement of the distribution mechanism for the £70 million that has been made available, which will disbenefit and punish most harshly the local authorities that have the highest levels of poverty and non-collection. Contrast that with our pledge to remove water charges from our pensioners, which would have had an immediate benefit.
Let us not forget that the average saving across Scotland will be £71—less than the cost of one night's drinks for the First Minister and a lot less than the cost of a hairdo for Ms Sturgeon. Mr Souter will be proud of how they have spent his money. More important—the cabinet secretary did not take the opportunity to clarify this point—is that the amount that will be available for crucial and valued local services up and down Scotland is only £175 million, a real-terms increase of only 0.5 per cent per annum, which is much less than the 1.8 per cent increase in the Scottish budget as a whole. That leaves our local authorities little scope to deal with the pressures that they face and to address local community needs. The hidden danger in the concordat and in the settlement is that local government will become responsible for the Government's failure to keep its promises, regardless of whether local government likes that or agreed to it. All ministers—not just the First Minister—are already using the concordat as a shield.
Even the much-heralded removal of ring fencing is being undone by one signatory to the concordat, Fiona Hyslop, who made it clear that there is a pot of £150 million for capital projects and urged education leaders to get "first dibs", as she put it, on that funding. Stewart Maxwell said:
"If we find a local authority who decide to use the money for something else entirely, we can always re-introduce the ring-fencing."
In agreeing to recommend a council tax freeze, COSLA has given up arguably its most powerful mechanism for delivering for local communities. [Interruption.]
The minister may not intervene from a sedentary position.
He needs to calm down, as they say.
From the evidence that was given to committees last week and this week, it has become clear that the concordat has no real substance. It is for councils to decide to what extent they can make progress on meeting the commitments in the Scottish National Party manifesto. That is not acceptable. The SNP has failed to demonstrate the financial competence that is necessary if Scotland is to be governed well. It has put the "con" in concordat.
The real test of the local government settlement is not what is said in this debate but what the implications are for the 32 local authorities during the next year. On the council tax freeze, which is undoubtedly what the public are thinking about, the real test is less about whether the Government can convince COSLA to sign up to a concordat that supports a freeze and more about whether the Government can convince councillors in every local authority in Scotland that the allocation that was announced today is sufficient to enable councils to freeze council tax without affecting services. That assessment can only be made locally. For the sake of council tax payers up and down the country, I hope that the Cabinet Secretary for Finance and Sustainable Growth has got it right.
Conservative members have long said that the problem with council tax is not the principle but the level of the tax. That is why we proposed specific targeted council tax reductions for pensioner households. It is why today we ask the Government to use whatever means it can to improve uptake of council tax benefit among people who are eligible but do not claim it. It is why we welcome a council tax freeze, if it can be delivered.
I am not an academic and I take a simple view of tax. A freeze is better than a rise, and a cut is better than a freeze. I think that most people in Scotland think the same way about council tax. Given that uptake of council tax benefit is a long-standing issue, would it be appropriate for the Government to consider building into the concordat a target on increasing uptake? I appreciate that the issue relates to reserved matters as well as to the consequences for individual taxpayers, but the matter should be considered in detail.
We welcome the broad move to reduce ring fencing—a policy that was part of the Conservative manifesto in May. We should all acknowledge that we are entering new political territory. The consequences of ending ring fencing will be positive. There will be greater discretion for local councils and less bureaucracy, which we welcome. However, to some extent it is unclear how the approach will work in practice. We will have to wait to see what happens.
I want to tackle head on an issue that has been raised in relation to the reduction in ring fencing. It will always be possible to build a plausible or compelling case for ring-fenced spending on one service or another, so that services are protected and vulnerable groups do not suffer. However, we need to reflect on the implications of going down that road. Do we think that members of the Scottish Parliament are the only elected representatives who are capable of compassion? Are we the only elected representatives who care about services for vulnerable people? Do we think that local councillors are capable of exercising discretion on a range of issues that are fundamental to people's lives, such as education, but are somehow incapable of assessing the needs and demands of vulnerable groups locally?
I have been a councillor and I agree absolutely that power should be given to elected representatives on councils. Does the member agree that that includes the power to decide what level the council tax should be, so that a council can be accountable to its electorate for the level that it has set, which has not been dictated by Government?
I understand that councils have been given the choice about whether they apply for funding from the council tax freeze fund. If a Labour council wants to increase council tax substantially, it will be free to do so.
During the meeting of the Education, Lifelong Learning and Culture Committee on 5 December, when Elizabeth Smith asked the Cabinet Secretary for Education and Lifelong Learning whether councils would be able to adopt some aspects of the concordat and not others, the cabinet secretary replied:
"If an authority decided not to pursue or not to deliver on the specified set of commitments, we would not be able to reach a single outcome agreement with it and it would not benefit from the end of ring fencing or be able to keep its efficiency savings".—[Official Report, Education, Lifelong Learning and Culture Committee, 5 December 2007; c 472.]
It is not just about councils having discretion to freeze council tax; it is about the whole package. There is no local discretion for councils.
The Government will answer questions on the detail of the concordat, but as I understand it each individual council will still set the council tax level in its area, which is as it should be. We take the simple view that priorities in each local authority area differ across the country—what is right in Glasgow is not necessarily right in Aberdeenshire—and individual councils should have greater freedom to reflect the wishes of their electorates.
I know that the member has given way already, but will he take another intervention?
Oh, just for Mr Rumbles.
Aberdeenshire Council has not received its fair share from the budget settlement. It is £29 million short, so cuts are going to have to be made in Aberdeenshire. That will be about local councillors deciding where the cuts will fall.
It is a real issue and Aberdeenshire is an interesting example because it is probably one of the parts of the country that will be hit hardest by a local income tax. I am sure that Mr Rumbles will make that clear to all his constituents as the discussion progresses.
We still need answers to questions about what the outcome agreements will be like in practice. We need to see those agreements before we can see how they will work. However, surely it is right in principle for local government and the central Government to move away from a culture of believing that spending is inherently good, and that more spending is inherently better. The real question ought to be about how we achieve desirable outcomes.
In that context, we should be looking at what is achieved rather than how it is achieved. In doing so, there might be opportunities for smarter working and greater efficiencies within councils, which will hopefully allow councils to deliver efficiency savings of the scale that will be needed if they are to be able to manage their services under the local government settlement. Until we see the local outcome agreements in action, it will be difficult to assess how comprehensively managed they will be, and whether we have moved from ringfencing to being more flexible in order to achieve the outcomes. It will be interesting to see whether the cultural change that is sought is effective.
There is also a wider debate to be had about what is expected of local government and its current statutory and non-statutory roles, as well as its broader vision of where it sits in post-devolution Scotland, and what can best be achieved locally and nationally. Part of the concordat shows that the Government has set its face against reform of the local government structure. I understand why COSLA thinks that is good thing; reform is always painful and can distract from the day-to-day pressures of delivering services. However, sometimes the only way to achieve better-aligned services is to tackle the issue head on and to reform the structure and role of local government. I accept that such reform will not happen during the current session of Parliament, and that there is much to be done in delivering more efficient services—for example, by sharing services across council boundaries and with other organisations. However, at some time in the not-too-distant future, we will have to tackle questions about what we expect of local government, what finance it should raise and how local it should be. For example, the move away from ring fencing suggests that local government should be more autonomous.
At the same time, the share of spending that local government raises is set to continue to decline. That is not a new decline; it has happened under Governments of all parties—it certainly happened under the Conservative Government and under the previous Administration. It is continuing today and it will get worse if we have a fixed local income tax of 3p in the pound.
Different arguments could be had about the correct proportion of funding that local authorities should raise, although I am not suggesting that we should get into those arguments today. It seems to be rather odd that, last week, there was a remarkable outbreak of consensus that the Scottish Government should be more financially accountable, or that we should at least debate that concept. At the same time, there seems to be no appetite for a similar debate on local government. That is a fundamental issue for current and future settlements, and it must be debated if the Government is to bring in a local income tax. Many questions are posed by the local government settlement and the consequences of those questions will not flow out fully for many years to come.
Liberal Democrats will pass no verdict on the financial allocations that have been made by SNP ministers until we see what the councils say. Many a finance director will pore over the detail today. I wish them good luck, for there has never been less. There might be particular disappointment in Edinburgh because the City of Edinburgh Council and MSPs from all parties have argued strenuously for action. They are to get a working group.
The detail might be a slow burn for the SNP. If the figures are to be so simple and easily digested, the SNP's usual enormous quantities of spin and counter-spin will be lit up to show them as they are.
Despite asserting that funds have been transferred from central budgets to local government, ministers have not provided the equivalent 2007-08 figures. Today, we have been given a snapshot that is most definitely not the full picture. We shall wait and see.
The SNP has made much of its new relationship with local government. It is a party masquerading as Government, in full 24/7 campaign mode, with a determination, a vision and a pledge to manage competently. There is nothing wrong with managing competently—indeed, it is an admirable aim—but it is hardly an underpinning approach to local government. It is hardly a philosophy.
Some SNP members—Mr Swinney, Mr Mather and Mr Salmond—are small-c conservatives. They are fiscally reticent, aim to reduce public interventions in the economy and are determined to reduce the amount of money that is spent on public services. They might be described as the Irish tiger wing. However, that non-interventionist wing is balanced by the SNP's tax-and-spend socialists, who for eight years have racked up enormous policy commitments with the constant refrain of universalism. They are more the Scandinavian reindeer brigade. In many ways, that contrast between the party's two ideologically opposed wings reflects the nationalists' approach to local government today.
The reductions in ring fencing and the strengthening of local councillors' powers of determination to meet local needs are good—I agree with that approach—but even Mr Swinney accepted earlier that three quarters of local government funding in the current financial year comes with no strings attached. He was, I thought, rather quiet and spoke quickly at that point during his speech. The SNP should not spin this settlement as an end to ring fencing, as that is demonstrably not the case. Some £0.5 billion of ring-fenced funding—excluding expenditure on the police—will still remain next year and COSLA awaits an announcement on the detail of other ring fencing that is to be removed. Such spending is still centrally controlled. As usual, the rhetoric is great but councils and Parliament would be well advised to dig behind the spin.
If the SNP's approach to local government was simply about local responsibility and accountability, that would be good, but its overall approach is quite the reverse. It has replaced ring-fenced funding with national Government outcome agreements that will cover the entire settlement. It aims to replace the power of local councillors to determine local income by introducing a national tax. It has replaced locally mandated policies with its national manifesto—the manifesto of a minority Government. Ministers have made it clear that the number 1 priority for councils is to deliver the commitments of the minority SNP Government. The Government needs to accept that many local administrations throughout Scotland have a greater electoral mandate than the SNP Government has in Parliament. The SNP will not get away with saying, "We agree with you, but only if you do what we say." That is not an historic new way of doing things.
The Liberal Democrats want the end of the discredited and unfair council tax. We will propose, and argue for, a truly local income tax instead of a national income tax. Mr Swinney should change his mind on that. He and the SNP used to support—quite rightly—a local income tax. Despite the extraordinary contention by Mr Salmond in a recent newspaper article that the difference between local and national taxation is mere detail, the Liberal Democrats will argue for and propose a real local income tax.
Tavish Scott should stick to his guns on that one. However, does he agree with Chris Huhne, whose recent leadership manifesto suggested that
"we must also revive thinking about land values as a source of fair tax revenue"?
Over the years, many Liberal Democrats and Liberals have studied land value taxation. It is a shame that Donald Gorrie is no longer a member of the Parliament because he could have delivered an eight-minute speech on that without repetition, deviation or hesitation. I must ask Donald to come back to give Derek Brownlee some personal tuition on the matter by way of help.
Local income tax is important for the reason that local councillors should have—and want—the same fiscal discipline that MSPs of all parties have argued for. It would be at best curious for this Parliament to gain more powers over the raising of finance while it removed those same responsibilities from local authorities. However, that is the Government's position. Liberal Democrats would welcome a change of position from the SNP. A U-turn back to its previous policy of local income tax would be correct.
The figures that the cabinet secretary announced today will be digested in the coming days and weeks. However, on that point, I urge the SNP to show some consistency. I am told by COSLA and the local authorities—some of which Mr Swinney met in recent days—that he will not play the blame game. In this very tough settlement for local government, where councils choose to make difficult decisions, the SNP Government in Edinburgh will not blame them for taking those decisions. That is welcome. We expect Mr Swinney to be as good as his word. That applies to his fellow ministers and back benchers, too. I trust that we will see no SNP motions in which a local council is condemned for taking a difficult decision that was caused by the settlement that it has received from the SNP Administration.
However, some signs are inauspicious. On class sizes, Fiona Hyslop has been playing the blame game—my colleague Jeremy Purvis will deal with that later. The simple truth on class sizes is that the SNP promised but cannot deliver. It cannot deal with class sizes alone; they are not its responsibility. It is worrying for the SNP Government's new relationship with Scotland's councils that it has blamed the local authorities. That is not a good start.
The Liberal Democrats are disappointed by the SNP's approach to co-ordinating transport across Scotland. In the previous session, the SNP supported regional transport partnerships and pushed for them to have more and more powers—indeed, Mr Ewing pushed for them to have more and more money. However, less than two years later, the SNP has pulled the plug on the RTPs. We will get no effective regional transport partnerships.
We have also had the disgraceful butchering of Highlands and Islands Enterprise. How will local government take forward vital economic initiatives when the SNP is cutting the assistance that it needs? Only this week, the issue of the business gateway and the transfer to local authorities was mired in yet more doubt and disagreement. The numbers are unclear; councils do not know where they are at. What is dangerous about all of that is that business, which needs advice and help, will not get it. Mr Swinney should sort out that mess, which is of his own making.
Given how important transport is to growing the economy, which is the principal purpose of the Government, why is there no certainty over the funding for rural public transport grants, demand- responsive transport and the bus route development grant? I would mention Mr Souter, but not quite in the way that Mr Kerr did. Mr Souter regularly lobbied previous transport ministers on the importance of the bus route development grant because it did good things across Scotland. It still does. I am sure that Mr Souter will continue to lobby my successor. I wish him well in that. The bus route development grant is a good example of an appropriate mechanism for delivering better public transport services for local people. Where is it? We know not.
This afternoon, and on every day in previous weeks, the cabinet secretary has done to death his concordiat. Every ministerial utterance now has the concordiat as its centrepiece. This morning, we were surprised to hear Stewart Maxwell bow to the inevitable and accept the sensible Liberal Democrat argument on sportscotland. In nearly explaining yet another SNP U-turn, he did not mention the concordiat and yet the SNP considers it to be so historic that it has commissioned a book on it from the pre-eminent Scottish historian, the professor emeritus of history at the University of St Andrews.
The settlement encapsulates the choices that this Government has made. Local government will have tough decisions to make, as a result. Concordiat or no concordiat, the Liberal Democrats will stand up for local people who are left exposed by the cabinet secretary's decisions today.
We move to the open debate. I ask for speeches of no more than five minutes.
Presiding Officer,
"With the signing of the concordat between Local Government and the Scottish Government, for the first time, there is a firm commitment from both spheres of government to build a relationship of mutual respect and partnership. The Concordat underpins the funding for Local Government over the next three years, and aligns both the Scottish Government and ourselves to a new, and more democratically accountable, means of producing services for the people of Scotland."
Those are not my words, but those of the Convention of Scottish Local Authorities in its submission to the Local Government and Communities Committee on 5 December. In evidence to the committee, the COSLA delegation, which was led by its president, Labour councillor Pat Watters, made it clear that the Government has delivered for local government
"the best deal that we could get",
to which Rory Mair, the COSLA chief executive, added:
"We need to recognise that this is quite different from any previous situation, when leaders would have had no choice at all. Previously, the first that leaders would have known about what money their councils would receive was when the announcement was made. Leaders have much more advance knowledge of the position than was the case before."—[Official Report, Local Government and Communities Committee, 5 December 2007; c 331.]
How much is the settlement worth? Some £34.8 billion over three years. What is significant is that represents not only a welcome 5.2 per cent increase in the resources that are available to local government, if we include the additional moneys that were announced today, but an increase in the local government share of the Scottish budget, which has fallen from 39 per cent a decade ago to 33.4 per cent this year.
Furthermore, the cabinet secretary has allowed local authorities to retain efficiency savings whereas, in the three years of the previous spending review, £168 million was top sliced from Scottish councils at source. He has also increased efficiency savings from 1.5 per cent to 2 per cent. Councillor Watters told the Local Government and Communities Committee:
"Now, we have a commitment from the Government that we can retain efficiency savings and use them to fulfil local priorities."
He added:
"We still have to make the efficiency savings, but we will be able to use the money to deliver services at a local level. The fact that we will be able to keep that money is an improvement on losing it".—[Official Report, Local Government and Communities Committee, 5 December 2007; c 334, 341.]
Thus, unlike under the previous sleight of hand in which the Labour-Lib Dem coalition indulged, the money that has been announced for councils will be delivered to them and they will be able to reinvest savings to improve services for the benefit of the communities that they represent, thereby creating an incentive to deliver efficiency savings to the front line.
The 25 per cent of local authority spending that was ring fenced—that perennial bone of contention for local government—has been reduced substantially. Councillor Watters, in support of the reduction, said:
"Having flexibility makes good sense in relation to how we manage our resources."—[Official Report, Local Government and Communities Committee, 5 December 2007; c 342.]
Of course, Labour members have, predictably, used the removal of ring fencing to do what they do best: frighten and scare vulnerable people. We hear that services for disabled children will be slashed and that domestic violence reduction measures will no longer be funded. However, we trust local government.
Mr Mair's view of the reduction in ring fencing was:
"We have said that the previously ring-fenced funds that are no longer ring fenced should be distributed exactly as they were previously … All those funds will go where they went. Playing around with the distribution of those funds three or four months before the beginning of the financial year would create a ridiculous level of volatility."
I realise that that might not be clear enough for some Opposition members, but Mr Mair added:
"The first time that we will look at redistribution will be for the next spending review period."—[Official Report, Local Government and Communities Committee, 5 December 2007; c 349-50.]
Will the member give way on that point?
When I asked Mr Mair what benefit the removal of ring fencing would bring to councils, which at present have to produce myriad reports on small sums of ring-fenced moneys, Councillor Watters replied:
"The reduction in bureaucracy will free up officers' time, which can then be devoted to more productive elements of service delivery, rather than just producing reports on how we spend £2,000."—[Official Report, Local Government and Communities Committee, 5 December 2007; c 352.]
I interject here that the reason why I am not taking any of Mr Rumbles's tedious interventions is that, on half a dozen occasions in a previous debate, I tried to intervene on him, but he did not take an intervention from me or any other member.
Of course, £70 million has been made available to freeze council tax next year, as a prelude to its eventual abolition. That has been warmly welcomed by council tax payers, who have been forced to endure rises of more than 60 per cent under Labour's tenure. Laughably, even though not a soul will be worse off under the Government's proposals, Labour members shed crocodile tears over what they say, in a rather convoluted way, will be a widening income disparity as a result of the SNP no longer wishing to burden hard-pressed families. If Labour members care about the poorest in society, they will sign my motion S3M-1005, which condemns the United Kingdom Government for removing money from all households with a joint income of less than £17,000 a year through the abolition of the 10 per cent rate of income tax.
I realise that Labour members are incapable of accepting that, under difficult financial circumstances, as recognised by COSLA, the SNP Government has delivered a good settlement for local government and a sea change in the relationship between Holyrood and councils through the concordat—note the pronunciation, Mr Scott—which COSLA president Councillor Watters said
"was accepted by all leaders without any objections."—[Official Report, Local Government and Communities Committee, 5 December 2007; c 331.]
Today has been a good day for local government and a great day for Scotland.
The budget is tight, although it is not as tight as the Scottish Government would have us believe, as evidenced by independent commentators and, as Mr Kerr rightly said, the Parliament's information centre, which logs the rate of increase at more than three times that claimed by the Scottish Government. That said, the budget is considerably tighter than the previous three or four budgets, but everyone knew that that would be the case. In any event, we do not yet live in economic Shangri-la—as with every household budget, there will be good times and not-so-good times.
I do not want the focus of my speech to be the claims and counter-claims that go between the Scottish and United Kingdom Governments, but it is worth spending time on the budget allocation for local government, which is after all more than a third of the Scottish Government's total expenditure. That substantial amount of money is being treated very differently this year. I do not contend that that is necessarily a bad thing—it could result in positives—but it certainly carries risk. One of my concerns is that, as yet, the Government has not proposed ways of minimising that risk. I say that because if the changes—which I would go as far as to describe as innovations—go wrong, the losers will not be the institutions of government, whether central or local; they will be the people who depend on the services in question, and they will be substantial losers.
Those people might be people who are vulnerable, people who are aspirational or people who are both. Let me give an example. At least 25 per cent of our population will experience a mental health episode at some time in their lives. Some of the most successful people in our society will be affected by mental illness at some point. They will get the assistance that they need to recover and will continue to lead full and successful lives. We do not hear a great deal about that because, despite all our best efforts, there is still a stigma attached to mental illness.
If expenditure on mental health begins to drift away into other areas, that could have a truly devastating effect on individuals. However, the fact is that the changes would be hard to see or track, and if enough time was allowed to pass, considerable damage would be done. In that instance, how much of a drift away of funding would be too much? Is there any point at which central Government would say that that was unacceptable? Would it ever be politically acceptable for central Government to simply stand back and talk of local government's autonomy?
Alternatively, would central Government apply financial levers in the way that the cabinet secretary said that he would do in years 2 and 3 of the settlement, with regard to the money that will be made available to freeze the council tax? On Monday, the cabinet secretary told the Finance Committee that, in years 2 and 3, the money that is used to freeze the council tax will be announced separately from the local government settlement, that any councils that institute a freeze will get a share of that money and that any councils that do not institute a freeze will not. I find it difficult to see how that can be described as anything other than central Government dictating to local government.
I want to make it clear that there is an important distinction between the ending of specific grants—which are more commonly known as ring fencing—and the legitimate demand for the Parliament and the public whom we serve to have the ability to track changes in expenditure patterns. As things stand, that would be extremely difficult to do, and I ask the cabinet secretary to reflect on that.
Let me be clear. I am not saying that we should be instinctively opposed to the ending of specific grants or to the move to single outcome agreements with local government. Nor am I saying that those measures do not, at the very least, hold out the possibility of constructive improvements in the way in which public funds are applied. However, I am saying that they hold potential dangers. Perhaps the greatest danger is that a feeling will grow among the general public that their ability to hold politicians to account has been diminished and that their ability to track substantial changes in expenditure patterns has been diminished to such an extent that serious harm could be done before anyone could take corrective action. That would be a tragedy for the Government, but it would be an even greater tragedy for the general public.
In my view, that situation is clearly avoidable, if the cabinet secretary is prepared to take on board the points that are made in this afternoon's debate and to work with all parties in the Parliament to obtain the best outcome for the Scottish budget. That would be the best outcome not just for the Parliament and for central and local government, but for the people whom the budget is designed to serve.
I realise that it might be unfashionable to do so, but I take significant pride in having been a local government employee for 19 years, a local councillor for 11 of those years and a council leader for four of those years. I know that for some people, including some journalists, such a job history is enough to provoke a splenetic outburst about the presence in the Parliament of third-rate councillors. However, since coming to the Parliament, my respect for the role of local councillors, who do a difficult job, and, in particular, for local government employees—whether they are teachers, police officers who are partly funded through local government, refuse collection workers, social workers or school catering staff—is, if anything, greater. It is worth remembering that such academic studies as have been done unfailingly show that the public have more trust and greater respect for local councillors—sometimes even planning conveners—than for every other tier of public representatives.
In my view, the key to the settlement is respect. As a council leader back in 1999, I recall attending meetings with the minister who was responsible for local government, Wendy Alexander, and her deputy, Frank McAveety. At those meetings we were assured that there was to be a new partnership with local government that was based on the notion of parity of esteem. I am prepared to believe that Frank McAveety was sincere in that aim, given his local government experience, but I also believe that the actions of the Administrations that he supported for the next eight years were starkly at odds with the idea of parity of esteem.
I also believe that there was an almost unanimous view among council leaders of all parties that that parity of esteem was regularly undermined by Executive ministers. They remorselessly increased the areas of central direction and used both their legal powers and the ring fencing of the funding that they provided to determine councils' activities and choices. They also presided over successive cuts to the share of national resources that went to local government. The settlement that was announced today reverses that trend.
Will the member give way?
Not just now.
Labour councils that I know of are appalled by Labour MSPs' attempts to cling to the control that they once exercised. When I discussed the issue with Angus MacKay back in 2000 and 2001, he said that the share of national resources was irrelevant, but everybody I know in local government believes that it is a key factor and will celebrate the fact that it has increased.
In respect of the share of the national pie—I apologise for mentioning pies in the same speech in which I have mentioned Frank McAveety—it is true that the increase is small, but it is important. That is not surprising, given the miserly settlement that we had from Westminster. I wonder what happened to parity of esteem between Westminster and Holyrood. However, where it has been able to go further, the Government has done so, particularly in relation to ring fencing. A huge proportion of funding—an increase from three quarters to 90 per cent—is to be freed from ring fencing and the central diktats of ministers. That is the biggest vote of confidence in local government since devolution.
The member portrays a history of Labour and local government. What about the ending of compulsory competitive tendering, best value, three-year budgeting, the powers that are available in community planning, and 3.5 per cent per annum increases—the longest period of growth in local government finance since 1945?
On the point about best value, most people in local government would agree that best value gave rise to a regime of regulation and consultants' fees. It cost so much that it became discredited.
Many in the chamber will not remember or perhaps even have heard of the partnership agreement that was signed by the Scottish Government and council leaders in the early days of the Parliament. However, everyone in local government and many others will remember the concordat that was signed by John Swinney and council leaders a few weeks ago. It has been called historic, and in the context of the recent history of creeping centralism, which started in earnest in the latter part of the 1970s, it is certainly that.
Among Labour members in particular, there is a need for greater realisation of the need for a diffuse democracy in which power is shared between different centres of democratic legitimacy. Some Labour MSPs have expressed legitimate concerns about future expenditure on services for victims of domestic violence and disabled children. Those members are perfectly entitled to have such concerns and to express them, but they have chosen to use them to attack the Scottish Government. That tactic ignores the outcome agreements—I stress the mutuality that is implicit in the word "agreements"—that were signed up to by the Government and council leaders. Their tactic will fail because those members either fail to understand or ignore the fact that such concerns should be focused on the democratically elected councils. They will now have much greater responsibilities—which they should have had long before now—for disbursing resources according to their interpretation of local needs.
This is a new era for local government. Increased freedom of action, increased resources and a dramatic decrease in the central direction of local government will enhance local democracy. In achieving the settlement, the Scottish Government has learned the important lesson that relationships that are built on the control of one party by the other are generally destructive, whereas those that are built on choice, freedom of action and genuine parity of esteem tend to be much more productive. I commend the settlement to the Parliament.
I firmly believe that what was not said in today's statement is at least as significant as what was said. We have so little information to go on. There are already huge concerns about the settlement, the concordat with COSLA, and specifically the impact on Scotland's children, schools and families.
The settlement is a poor deal for councils and an appalling deal for children, schools and families. Let us be clear that it is the worst deal for them since the Scottish Parliament was established. The Cabinet Secretary for Education and Lifelong Learning has failed miserably to argue her corner for education and the most vulnerable children and families in Scotland today. By abolishing funding that is specifically targeted at children—including some of our most vulnerable children—families and education, the Government has abdicated its responsibility. Frankly, that is not good enough. How can we assess whether provision is adequate when we have no way of knowing from the statement what is to be spent on schools, children and families?
The most vulnerable children do not have a loud voice, but voices are now speaking out for them. Parents, teachers and children's charities such as Save the Children are speaking out. They ask where in the single outcome agreements the national target or indicator is for reducing child poverty in Scotland. I can tell the Parliament where it is: nowhere. They ask what has happened to the sure start programme, a national programme that benefits our most vulnerable families. They also ask where the £34 million is that Alex Salmond got as a consequential from United Kingdom funding. That money was to provide respite care for the families of disabled young people. Is it in the £175 million for services? Will the Scottish National Party support ring fencing that money? Alex Salmond said today and the concordat says that the SNP will provide an extra 10,000 respite care weeks. Does he realise that, even if they were all used for the families of disabled children, that would provide only a week every five years? I am sorry, but that is not good enough. You and your Government have all been found out.
I waited in hope rather than expectation for the minister to elaborate in his statement on how the local government settlement will help to deliver class sizes of 18 for primaries 1 to 3. I am disappointed—but, I have to say, not surprised—that he was able to shed no further light on where the SNP Executive stands on that issue. The First Minister said in the Parliament on two separate occasions that class sizes would be reduced to 18 in primaries 1 to 3 by 2011 and that his finance minister would provide councils with the full funding required to deliver the pledge. He is not here to listen to it, but we all know the truth: there is not one penny extra to deliver it. Indeed, the SNP COSLA education spokesperson had not a clue how much it would cost. Neither she nor Mr Swinney has done their sums, but they casually declare that the commitment is affordable. It is not good enough, cabinet secretary. Teachers, parents and pupils have a right to know: will you deliver your manifesto pledge by 2011 and was the First Minister telling the truth—yes or no?
The education secretary told the Education, Lifelong Learning and Culture Committee last week that councils would not be allowed to keep their efficiency savings if they did not deliver what the Executive expected them to. Will you take efficiency savings away from councils if they do not deliver your reduction in primary 1 to 3 class sizes to 18?
Will Rhona Brankin give way?
Absolutely. Perhaps you would care to answer some of the questions that I have been asking. Mr Swinney does not even have the courtesy to be here to answer them.
I ask members to make their remarks through the chair.
I note that Rhona Brankin's speech has the running theme that ring fencing should come back and the concordat should leave. Does she—as I do—trust local councillors of whatever political persuasion, including hers, to respond to local needs appropriately and deliver for the people who elected them?
The member is in her last minute.
I am sorry, but we do not trust you, because your First Minister has said to us—
Speak through the chair, please.
The First Minister has said on two occasions that class sizes would be reduced to 18 by 2011. Was he telling the truth or not, and did he forget to tell the Cabinet about the SNP's pledge on a £30 million ring-fenced fund for pupils with additional support needs? It was made in a speech on 20 April 2007—I have a copy of it here. He did not tell the Cabinet about it—he certainly did not appear to tell Mr Swinney about it.
Ms Brankin—
He certainly did not appear to tell the cabinet secretary about it.
No, I am indicating that your time is up.
Oh, right. Thank you. Do I have a minute left?
No.
Sorry, but I thought that we were told when we had a minute left.
That was a minute ago.
I was not told that.
Ms Brankin, that is why there are clocks in the chamber. Will you wind up, please?
Yes.
I finish by saying that the Government is denying respite care funding to the families of disabled children, yet it can easily find money for its own priorities, including flash new signs, headed paper and the 70 per cent increase in the cost of ministerial cars since it came to power. This Administration would rather buy Lexus limos for the First Minister than provide breathing space for Scotland's carers. The legacy of the settlement will be gaps in services for some of our most vulnerable people, for schools and for families, while the very richest adults in Scotland will gain a few pounds a month.
The member must wind up.
That reality should shame every SNP member today.
We heard a very interesting statement by the cabinet secretary today, but it was not quite as interesting as the concordat itself, which truly is a spin doctors charter if ever there was one.
Indicator 31 in the concordat is to
"Increase positive public perception of the general crime rate in local area".
Indicator 41 is to
"Improve people's perceptions, attitudes and awareness of Scotland's reputation"
and indicator 43—my personal favourite—is to
"Improve people's perceptions of the quality of public services delivered".
"Perceptions" is possibly the only term that appears more in the statement and the concordat than "tight spending round".
I thank the cabinet secretary for advance notice of his statement—all 3,316 words of it, lasting for 20 minutes and even coming with helpful instructions for SNP MSPs about where and when to clap and fawn over John Swinney. During questions, watching Kenny—or Kenneth—Gibson and Mr Swinney was a bit like watching a performance of "Romeo and Juliet".
However, there were a number of contradictions in the cabinet secretary's speech. The Government is hiding police numbers now—in the same speech we heard the figure of 1,000 police mentioned, and a few minutes later it was 500 police, alongside the idea that extra officers are due to retire over the next year or two. The number of police goes down each time we hear about it. We heard Mr Swinney say triumphantly that
"Edinburgh is … a gateway … for visitors and businesses"
but, in the same breath, mock the important Edinburgh trams project that needs to progress.
We heard Mr Swinney say that the Government is:
"introducing the small business bonus scheme from 1 April 2008",
but we did not see the small print in the statement, which said that only part of it would come in on 1 April 2008, and the rest would come in in 2009 and 2010. I wonder how many times Mr Mather and Mr Swinney, the fiscal conservatives, mentioned that to businesses as they munched on prawn cocktail and rubber chicken while they went round the various businesses throughout Scotland. Perhaps Mr Swinney can intervene and tell us how many times he told businesses—or indeed, anyone—that that important scheme would be phased in instead of being implemented immediately on 1 April.
Come on, Mr Swinney.
He does not wish to take up the challenge.
We wish to comment on the council tax freeze—if indeed the council tax freeze goes ahead, most constituents will, of course, welcome that. It is important that the SNP realises that it is not yet a deal on the table—all 32 local authorities actually have to agree to it before it goes forward. On a point that Mr Brownlee made, most of the council leaders whom the Government has spoken to—if Mr Swinney were to listen, he might learn something—do not even have a working majority, so simply speaking to the council leader is no guarantee that they will sign up to a council tax freeze.
Is the freeze sustainable? It will be £70 million this year—how much next year, and the year after that? If the local income tax does not go ahead—as we heard from Mr Scott today, there seems to be a bit of a fight in the camp over whether it is a local income tax or a local national income tax or a national local income tax—what is Mr Swinney's plan B for funding local government?
We certainly commend our proposal for a 50 per cent council tax discount for pensioners, which the one and only Alex Neil has backed up, and we support the reduction in ring fencing, as Mr Brownlee has said. That will add flexibility to the system. We also think that local authorities should not simply be agents of Holyrood. They should not simply be cogs in the central Government machine; rather, they should find solutions to the local issues that they face. It remains to be seen whether that will happen with the single outcome agreements. There are some positives in the statement, but it is important to reduce ring fencing and that we have sustainable funding for local government in the future. We certainly commend the council tax discount for pensioners.
I did not hear John Swinney say in so many words, "'tis the season to exaggerate" but, in effect, that was the theme of his statement. The new viceroy of Scotland, the First Minister, emboldened after raising the lion rampant over Bute House on St Andrew's day, declared at the launch of his Christmas card:
"This has been a great year for the Scottish Government and for the people of Scotland."
The minister should note the order in which the First Minister put the Government and the people of Scotland. Perhaps there was a slight tone of self-aggrandisement. The signs are there. I was recently told by a wag that if the First Minister converts to Buddhism, he will want to be reincarnated as himself.
I commend the ability of SNP members to describe the concordat with local government as "historic" so frequently and with so much vacuousness. Indeed, in last week's Education, Lifelong Learning and Culture Committee meeting, Councillor Isabel Hutton of the SNP—she is COSLA's education spokesperson—said:
"There will be regular meetings between COSLA representatives and ministers—that is quite new and groundbreaking"—[Official Report, Education, Lifelong Learning and Culture Committee, 5 December 2007; c 417.]
I know that in the eyes of the SNP the world began in May 2007, but it is pushing things a bit far to say that regular meetings between COSLA and ministers did not take place in the past. Indeed, dismissing so easily the presence of the three-year budgeting regime that was agreed in a previous Government concordat—as described—is not fair.
The Cabinet Secretary for Finance and Sustainable Growth again hailed the holy grail of the concordat today. The concordat is now a near-mythical document that is held up to answer all questions on details. Ministers say that we do not need details, as things are in the concordat. Indeed, the signing of the concordat has now been added to the assassination of Kennedy and the death of Diana as an event—people throughout Scotland know exactly where they were and what they were doing when they heard about it.
Under repeated questioning in the Education, Lifelong Learning and Culture Committee about the process that led to the concordat, the decisions on ring fencing and efficiencies and the calculations of costs that led to the agreed position with COSLA, we heard only that we need not ask COSLA about such things because the concordat, like some ancient seer, contains all the answers.
Even the First Minster was at it this lunch time with respect to respite support for children with disabilities. Just because something is not typed in ink on paper, that does not mean it is not there. He said that if we look hard and deep enough, we will find things.
The Education, Lifelong Learning and Culture Committee asked the Cabinet Secretary for Education and Lifelong Learning the same questions and got the same non-answers. For example, the SNP manifesto promise on class sizes—its flagship education policy—was perfectly clear. On 5 September, the First Minister was also perfectly clear that the policy would be delivered in this parliamentary session. Last week, I asked the Minister for Schools and Skills, Maureen Watt, whether that policy still stood. I said:
"On 13 September, the Minister for Schools and Skills told Robert Brown that education ministers had made a funding bid to the Cabinet Secretary for Finance and Sustainable Growth to implement in full the promise to reduce class sizes in primary 1 to primary 3 to a maximum of 18."
The Minister for Schools and Skills replied:
"The member fails to recognise how matters have moved on since September. We now have the historic concordat with local government".—[Official Report, 6 December 2007; c 4187.]
Things have moved on from a clear commitment to no commitment at all—although, of course, we have the historic concordat.
I have asked about the additional £40 million on capital. We recall the Scottish Government's spin in describing it as the first step in reducing class sizes. I asked COSLA about it. Robert Nicol said:
"there is no obligation to spend the money on reducing class sizes."
I said:
"Councillor Hutton said that the money was to contribute towards a reduction in class sizes."
Robert Nicol said:
"It is one of the contributions."
When I asked how many local authorities have committed to contributing to a reduction in class sizes, Jon Harris of COSLA said:
"Again, councils have to make the commitments themselves."
So, we have no baseline information, no costings and a merry-go-round of scrutiny.
One of the fundamental structural problems of the concordat is that it is an agreement with just local government yet, in education and social work, many of the grant-aided support comes from local health boards. Uncertainty is now being built into the delivery of local services.
With regard to accountability, I simply cannot accept the Government's new relationship with local government. In the Education, Lifelong Learning and Culture Committee, the Cabinet Secretary for Education and Lifelong Learning was asked:
"if one local authority chose not to pursue one of the priorities, could you exercise sanctions against it? How would you react?"
She replied:
"If an authority decided not to pursue or not to deliver on the specified set of commitments, we would not be able to reach a single outcome agreement with it and it would not benefit from the end of ring fencing or be able to keep its efficiency savings".—[Official Report, Education, Lifelong Learning and Culture Committee, 5 December 2007; c 436, 472.]
How the Government can do that with one local authority, I simply do not know. The answers still need to come. As much as there can be self-aggrandisement, we just need some basic answers to some basic questions.
It gives me great pleasure to say that the local government budget and the concordat that was signed by the Scottish Government and COSLA mark a positive turning point in the way in which councils throughout Scotland are treated and, indeed, respected. They mark a welcome turning point not just in halting the decline in local government funding as part of the overall spending cake that Scotland's Government provides, but in reversing that trend. Under Labour and the Liberal Democrats, local authorities got an ever-decreasing slice of the overall spending cake and were, in effect, experiencing a relative budget shrink. It has taken an SNP Government to right that wrong, and we should all be proud of that.
Local authorities will see budgets increase in real terms by 4.9 per cent over the lifetime of the budget, compared with 4.6 per cent for government as a whole. That is a clear indicator of the importance that our SNP Government places on local government. It is not only about the money that local authorities will get; it is about the relationship between the Scottish Government and local government—a relationship that engages local government at an earlier stage in a much more meaningful way.
There is
"a firm commitment from both spheres of government to build a relationship of mutual respect and partnership … We welcome the tenor of the Concordat, which points out it is for the Scottish Government to set the direction of policy and then to jointly agree outcomes with Local Government."
Members would expect me to say that, but I did not write it—it is part of COSLA's written evidence to the Local Government and Communities Committee.
Will the member take an intervention?
No, thank you. There is a lot of good news to talk about and I do not have time to take an intervention.
We should not underestimate just how significant and historic the concordat is. One aspect of the concordat has generated much political heat in recent weeks—ring fencing. COSLA and local authorities have welcomed the reduction in the amount of funds that are ring fenced—a reduction from £2.7 billion to £0.3 billion. COSLA has expressed clearly the benefits of the reduction of ring fencing to our communities and to the way in which local authorities are able to support the most vulnerable groups.
I cast my eyes to the Labour benches and notice that none of the Labour members of the Local Government and Communities Committee has bothered to turn up for the debate, which is disgraceful and should not be allowed. They should be chastised for that.
In providing reassurance, Councillor Pat Watters, the president of COSLA, made a telling contribution to my committee—it is my committee now, as the other members have not turned up—and I believe that it is right to mention it again in the chamber. Perhaps this time Wendy Alexander—who also has not turned up for the debate—and her propaganda machine will listen. Councillor Watters said:
"There is not an authority that does not value highly the input of the voluntary sector in its community."
He went on to say:
"Is there an assumption that, because we have greater flexibility, we will be irresponsible? I do not think so."—[Official Report, Local Government and Communities Committee, 5 December 2007; c 347-8.]
What a bizarre situation we find ourselves in. Councillor Watters—a Labour councillor and certainly no flag waver for the SNP—heads up a delegation from COSLA, meets John Swinney, the Cabinet Secretary for Finance and Sustainable Growth, a historic concordat is signed and Councillor Watters states that the settlement was the best deal possible in a tight financial settlement.
Will the member give way on that point?
COSLA and the SNP Government agreed a watershed deal, having left party-political interests at the door to sit around the table for professional discussions—without political partisanship. There is perhaps nothing bizarre about that.
You have one minute left.
The bizarre thing is that Labour in the Scottish Parliament is doing everything in its power to run a wrecking ball through the concordat, for reasons of petty party-political partisan politicking, which shows the very worst in narrow-minded self-interest. Actually, I should offer an apology. I did not mean to use the word "bizarre"; the word that I was looking for is "shameful".
Let a Labour MSP intervene now, in my last minute, to tell me about a Labour councillor or council group that they do not trust. Now is their opportunity. Now is their time.
But he is in his last minute.
Their silence is absolutely deafening.
With the end of top-slicing, which robbed local authorities of £160 million in the last spending review—money that you stole from them—
Speak through the chair, please.
—and the expected council tax freeze, we will not increase council tax by 3.4 per cent, which is what Labour would like to see happen. I commend the budget and the concordat to the Parliament.
I am glad that I turned up. It is the pantomime season—but I am not going to go down that line.
Oh yes you will.
Oh no I won't.
Like you, Presiding Officer, I have experience of different Parliaments and different styles of government. In Scotland, we now have government by slogan. In finance in general, and in local government finance in particular, people pretend that we can get something for nothing—free school meals, free education, free transport and free prescriptions. As Alex Salmond should know by now, there is no such thing as a free lunch.
Locally, as well as in national government, the cost has to be borne by the user, or by the taxpayer, or by a combination of both. Someone has to pay for the vital services that local government provides. If council tax is to be frozen and the Scottish Government's grant to councils is limited, cuts are inevitable. It is already happening. Derek Brownlee should carefully examine the point about flexibility to local government. If councils do not freeze council tax, they will face severe penalty charges. That is not giving flexibility to councils.
The budget that was delivered by John Swinney ought to have been welcomed by Derek Brownlee and other Tories—and it was, to some extent—because it was a typical Tory budget, albeit a tartan Tory budget. It had tax cuts, which will inevitably result in service cuts. That is entirely the opposite of what the SNP promised in its manifesto. In Edinburgh, an SNP-led administration is implementing those cuts. The new schools that had been planned for Portobello, Boroughmuir and James Gillespie's have all been abandoned. When we ask what progress is being made with the Scottish futures trust—perhaps we will hear about this in the winding-up speech—we are told absolutely nothing.
George Foulkes talks about tax cuts leading to service cuts. As far as I am aware, the Prime Minister announced a reduction in income tax from next April. Can George Foulkes articulate what service cuts HM Government will be introducing from April next year to match the tax cuts that have been introduced by the Prime Minister?
Excuse me, but that is coming from a representative of a party that said that we have implemented 20 or 30 or 40 tax increases over the past few years. David McLetchie cannot have it both ways.
In Edinburgh, as Margo MacDonald mentioned, more than 1,000 people applied to live in one council house. There is a desperate need for affordable housing in the city. Where is the money for providing affordable homes in Scotland's capital city? The revenue budget that the City of Edinburgh Council recently considered spelled out the grim reality of an SNP Government at national and local levels: service reductions, staff redundancies, delays in new commitments and scaled-back activity. It is spelled out in further detail by school energy budget cuts, reduced spending on disability and reduced sport grants.
John Swinney said that councils are not standing around looking to punish vulnerable people. Of course they are not, but we do not need a crystal ball to see that vulnerable people will be harmed; we need only look at what is happening in practice in Edinburgh. In education alone, the city council has slashed 300 full-time nursery places, reduced sure start funding for the children most in need by nearly £700,000, and stopped serving hot meals on a Friday. School closures are yet to come. That is the reality of the overhyped, so-called historic, concordat. Removing ring fencing has also increased uncertainty, particularly for vulnerable people.
Cuts in core services and throwing into the pool money specifically ring fenced for Scotland's vulnerable people, rather than the rhetoric of the election campaign, is the reality of the SNP in government. It has been a record of promises broken, hopes shattered and betrayal—which is slowly but surely dawning on the people of Scotland.
On a point of order, Presiding Officer. On at least two occasions during her speech, Rhona Brankin accused the cabinet secretary of discourtesy for being absent from the chamber—for, in fact, a total of seven minutes, no doubt on a comfort break. Given the fact that she then left the chamber herself—for 11 minutes, probably for the same reason—should not she also apologise for the discourtesy?
That is not a point of order.
It also reduces the time available for speeches.
I will admit a personal bias straight away: I have always been a fan of local government, having served on two Scottish councils—one as provost—and as a council representative on COSLA. I have seen at first hand the massive positive effects that well-run local authorities can have in creating economic and social progress in their communities. Lord Foulkes wanted an example: with a combination of low taxation and high-quality services, Angus Council has pioneered economic development and long-term infrastructure improvements that show local government at its very best.
Over past decades, local authorities have faced reduced or restricted funding, bureaucratic burdens and ever greater central Government control over capital and revenue spending, allied to ever increasing centrally imposed workloads. Now is the time for central Government to work in partnership with Scotland's local authorities, providing strategic overview and resources that will maximise available capital and revenue budgets.
No one, however, should be under any illusion about how tight the settlement from Westminster is. It is the lowest spending allocation since devolution and, allied to a continuing Barnett squeeze, has arrived in the shortest timescale ever, due to the delay in Westminster comprehensive spending review decisions. No matter which baseline we choose—the UK version or the Scottish Government version—the reality is the same: low budget growth in the tightest settlement since devolution. We therefore have to squeeze maximum value from every pound spent. Choices and priorities are inevitable.
The budget marks a major change in relations between local and central Government, and I welcome the concordat. If it is properly implemented and adhered to, it will provide new freedom for Scottish local authorities to make local choices based on local priorities.
Will the member give way?
I would like to, but I regret to say that the member's colleague has prevented that.
The new relationship contrasts with the history of previous central Governments' centralisation and funding cuts, the ring fencing of funds, the raft of performance indicators and value for money, which were all dominated and controlled through central Government diktat. That has been the reality in local government.
I welcome the Scottish Government's pledge that there will be no reorganisation of the local government structure—as, I am sure, will every councillor who remembers the upheavals of past local government reorganisations. The pledge will ensure that there is no unnecessary upheaval and expense, and it will provide settled and continuing local authority boundaries. Within those, our councils can plan ahead properly and with confidence.
I welcome the funding for infrastructure projects and the medium to longer-term planning based on local needs. The increased spending on motorways and trunk roads, as well as public transport improvements, will clearly assist economic growth.
There is indeed nothing new under the sun. As co-sponsor of the original Housing (Homeless Persons) Act 1977, which I actually got extended to Scotland, I find it ironic that in the 21st century we are faced with a lack of affordable housing—never mind the better, modern insulation and quality standards that our people should take for granted.
I welcome the infrastructure improvements, the proposed medium to longer-term planning and the co-ordinated economic development that will maximise scarce resources and target them. However, much now depends on co-operation and good will in order to deliver the reality of a working concordat that can use the freedom that has been given to local government to a positive purpose on behalf of our communities.
I place on record my thanks to John Swinney for the openness, competence and grasp of detail that he has displayed when he has explained his detailed and complex budget proposals and for the spirit of co-operation that he has shown towards all the organisations that have been involved in the budget creation process. We have an opportunity to make progress through co-operative working between our local authorities and central Government. I look forward to the implementation of the proposals, knowing what the history has been.
My constituency falls into the area that is administered by East Dunbartonshire Council. Of the 32 local authorities in Scotland, East Dunbartonshire is regarded as the least deprived and one of the most affluent. However, although there is wealth, there is also poverty.
During the election campaign, my SNP opponent—a former headteacher of the High school of Glasgow and a native of Bearsden, which is the most affluent part of the constituency—spoke a lot about his party's proposals to introduce local income tax. He told anyone who would listen that those proposals would see people paying less for council services than they pay under the council tax. However, he did not speak much about the findings of the report on local government finance by the eminent banker Sir Peter Burt. It is worth reminding the chamber what Sir Peter had to say about local income tax. In section 10 of his report, paragraph 139 on page 113 states:
"Our modelling suggests that a local income tax levied only on earned income at basic and higher rates would have to be set at a rate of 6.5% in order to replace the current council tax yield."
When that report came out, the SNP panicked and its deputy leader, Nicola Sturgeon, announced that her party would give councils enough money to cut the local income tax burden, and said later that any rises would be capped at 3p in the pound.
Will the member give way?
No, I cannot. I have only four minutes.
Today, Mr Swinney said that the SNP still wants to introduce a local income tax, and that it will be set at a national level. So much for local accountability. We should ask today if the figures that Nicola Sturgeon gave are still accurate or, indeed, whether they should be higher.
We have already heard from Andy Kerr that the report from Professor David Bell, the independent budget adviser to the Finance Committee, had some revealing things to say about the SNP's council tax freeze. Again, it is worth repeating, although I know that Mr Doris will not like it. Professor Bell said:
"It is largely more affluent individuals that gain most in money from a council tax freeze. Those in household incomes deciles one and two, that is the poorest 20 per cent of households, do not gain at all from a council tax freeze."
We already know that the SNP does not intend to levy its local income tax on the wealthy who live off the proceeds of stocks and shares and other unearned income, but how will the council tax freeze affect an area such as Strathkelvin and Bearsden? The total number of houses in the upper bands F, G and H is just under 13,000, or around 30 per cent of the housing stock. The number of houses in bands A, B and C is also just under 13,000—again, roughly 30 per cent of the housing stock. The SNP has made much of its wealthier and fairer objective, but I fail to see how that objective is achieved by delivering cuts in council tax to the wealthiest people in my constituency at the expense of those who have little to gain.
Another part of the SNP's famous concordat with local government relates to the decision to transfer responsibility for running the business gateway to local authorities and away from Scottish Enterprise. In my constituency, that meant the closure of two business gateway offices in Kirkintilloch and Bearsden. It is true that a new, small local office has been opened but, instead of a visible high street location, it is located in the enterprise centre in Southbank business park.
The minister might shake his head, but I tell him that since the business gateway changes were introduced in my area, the rate of new business start-ups has dropped dramatically. Over the past two months, only 31 starts were delivered in the business gateway Dunbartonshire area, and only 10 of those were in East Dunbartonshire. That compares with 81 from the same period last year. Indeed, there are still arguments about how much money needs to be transferred to local authorities to run those gateway services. Scottish Enterprise says that it is £10 million, and the Convention of Scottish Local Authorities says that it is £100 million. They cannot both be right, so perhaps the minister can tell us which one is correct. He may also want to tell us who will have ultimate control. Scottish Enterprise says that it should keep it, but local authorities say that they should have it.
Indicator 2 in the famous concordat is:
"Increase the business start-up rate".
So far, the SNP Government's changes have decreased the business start-up rate in the area that I represent and, I dare say, elsewhere. The SNP says that it wants Scotland to be wealthier and fairer. I suggest that the announcements that it has made today fail completely to hit that target.
At First Minister's question time earlier this afternoon, Mr Salmond, with his now customary penchant for self-effacing understatement, trumpeted Mr Swinney's announcement as the
"best financial settlement for a generation".
That is but the latest example of the worrying phenomenon of government by assertion that is practised by the First Minister and his ministerial and special adviser team. However, the real judgment on the settlement will not be made today, this week or even when councils come to decide whether to freeze their council tax levels in February next year. The judgment on whether the First Minister's bombastic assertion has any credibility will take a little longer to make.
Jeremy Purvis highlighted how Mr Swinney and his colleagues take great satisfaction in waving around in the chamber their concordat with COSLA. From observation, the concordat often appears to be the only piece of paper in his briefing folder on which Mr Salmond can lay his hands during First Minister's question time. However, Liberal Democrats have no difficulty with the concept of freeing up local authorities to take more responsibility and more control over decisions that affect the people whom they are elected to serve.
I turn to the council tax freeze. No one wants to pay more tax, although Derek Brownlee deviated a bit from the Cameronian mantra in appearing to call for council tax cuts—even David Cameron now seems to appreciate that tax cuts at the expense of local services are not good politics. As Andy Kerr and Tavish Scott pointed out, the concern is the lack of detail to date on what moneys have been transferred to councils as part of the deal. There remain serious questions as to whether the council tax freeze is fully funded. In his evidence to the Finance Committee in Dundee on Monday, the Cabinet Secretary for Finance and Sustainable Growth suggested that he had erred on the side of generosity. Time will tell whether that is the case: if it is not, the cuts in local services may be deep and painful.
As Gavin Brown said, what has been of truly historic proportions is the Government's spin operation, which has been most impressive throughout. I do not deny that Governments need to get their message across and to set their decisions in context, but time and again over recent weeks, COSLA representatives have had to clarify what they intend to deliver and, importantly, not deliver under the terms of the historic concordat.
Jeremy Purvis highlighted the inconsistencies in ministerial statements on education. For all the warm words about parity of esteem and a marriage of equals, the reality seems to be somewhat different. Ministers appear to have a gun to the heads of local councils in case they fail to agree to everything that the Government wants, and they are busy telling councils where their efficiency savings should be spent—not on local priorities, of course, but on uncosted and undeliverable SNP manifesto pledges.
The First Minister was keen to quote in the chamber the views of COSLA vice-president Councillor Neil Fletcher, so he and his colleagues may be interested to hear Councillor Fletcher's comments on the SNP Government's assertions regarding class size reductions:
"this spin by the SNP led Scottish Government on its policy of class size reduction is a very dangerous threat to its relationship with local government".
Similarly, the SNP's assertions that it has secured a freeze in council tax for the next three years were flatly denied by COSLA's president, Councillor Pat Watters, in evidence to various parliamentary committees earlier this month.
We have been treated to a procession of SNP back benchers heralding the settlement as excellent news for their councils and constituents. I congratulate each and every one of them—their feat of speed reading of the detailed figures is worthy of hearty acclaim. However, it could just be that they have not read the detail and have not spoken to council members or officers; instead, they have sought reassurance from the briefings provided by ministers. Again, time will tell whether they have been too quick to pass glowing judgment.
The truth is that councils will scrutinise the detail of the cabinet secretary's announcement and pore over the figures relating to their local authority area, trying to detach raw facts from the overblown rhetoric. Undoubtedly, all councils will have to make difficult choices—that is inevitable—but it is not yet clear what effect the single outcome agreements will have on the process. Will they force councils to contort budgets to deliver SNP promises, or will councils, in the spirit of mutual respect to which the Cabinet Secretary for Finance and Sustainable Growth has referred, be free to respond to local priorities?
What is not clear, despite questioning at the Finance Committee earlier this week and again in response to the cabinet secretary's statement today, is what sanctions the Government proposes for councils that do not deliver elements of the single outcome agreements. What constitutes a breach? Who decides? Do local or national priorities take precedence? Tom McCabe highlighted those tensions in an excellent speech that was applauded throughout the chamber. Tavish Scott rightly questioned whether the settlement will lead to an end to the blame game, which is what the cabinet secretary indicated.
Those who are involved in the provision of mental health services and support for vulnerable members of our communities have already expressed the understandable concern that with the removal of ring fencing, the resources that are available to them may be cut. The issues are hugely difficult, and the impact will no doubt vary throughout the country. However, without a clearer understanding of how the outcome agreements will operate when they move from the drafting to the implementation stage, it is difficult to see how those issues will be managed satisfactorily.
Tavish Scott referred to the likely commissioning of Christopher Smout, the professor emeritus of history at the University of St Andrews, to capture the true historic proportions of the concordat and today's settlement for local government. I suggest that a better hire might be the less illustrious and presumably cheaper Ray Hammond. As a futurologist, he is probably better placed to assess whether the settlement is indeed historic.
I congratulate Mr John Swinney on his astute playing of the blame game that we have been discussing today. The blame game is, of course, a feature of both the overall construction of the budget that he put together and the local government settlement that he has just announced. Not enough money? Just blame Brown. Ignoring the SNP manifesto? Bemoan one's minority status and blame all the other parties. Fail to deliver on reducing class sizes? Blame the councils. Indeed, the councils will no doubt be blamed for every failure to achieve any of the 15 national outcomes and 45 national indicators and targets set out in the concordat. That strikes me as very much a Faustian bargain that COSLA's leaders may well come to bitterly regret.
I wish to bury the myth of a so-called tight financial context to the council settlement, which has been perpetrated today by Andrew Welsh and other SNP members and, I regret to say, parroted by Mr McCabe in an otherwise thoughtful speech. The fact is that the SNP Government has at its disposal more money—in real and absolute terms—to spend on schools, hospitals, transport, police and all the other devolved services in Scotland than any other Government before or since the establishment of the Parliament. Accordingly, there is no reason for the SNP to fail to deliver on any of the promises in its manifesto, other than the fact—given belated and sometimes welcome recognition—that many of them were fraudulent, uncosted, unaffordable and undesirable.
I recall that Annabel Goldie took credit for most of what the Government did in its first 100 days. Which ideas does Mr McLetchie think were not good ones?
All the ones that do not coincide with what was in our manifesto, obviously. That is our role in the Parliament—to implement our policies, not the SNP's policies or the policies of the Liberal Democrats.
One of the interesting features of the agreement with COSLA is the removal of ring fencing from approximately £1.7 billion of the funding that is allocated to councils. As Derek Brownlee said, we agree in principle with such a bold move by the Government—even Tavish Scott acknowledged the idea. We do so despite its having been met by the entirely predictable if understandable objections and concerns of organisations and projects that presently are financed from ring-fenced funds, and despite the fact that the apparently dramatic nature of the move is diminished by the undertaking by councils to maintain spending in formerly ring-fenced areas over the next three years—a point made by Kenneth Gibson.
Instead of ring fencing, we have an SOA—a single outcome agreement—with every council. However, not only has the content of those agreements still to be determined, but how they will be policed and what sanctions will apply in the event of failure to attain an outcome or achieve satisfactory progress towards it have still to be determined. On one hand, outcomes and targets may be treated as mere aspirations, subject only to mild admonition and encouraging words from a genial Mr Swinney. On the other hand, they could be strictly policed with penalties for councils that fail to achieve the goals. We need much more information about that before we pass judgment. Some councils might find that single outcome agreements become more of a financial stranglehold than ring fencing, because outcomes apply across the totality of a council's budget, not just the areas that were ring fenced.
A great deal has been said already about the three-year council tax freeze and the extent to which it is deliverable. I am fairly confident that all councils will sign up to it for next year, but perhaps fewer will do so for the two years thereafter, especially if some major and currently unquantified liabilities come home to roost, arising out of single status agreements and related equal pay litigation. I asked the cabinet secretary about that last week, and pointed out how, less than two years ago, the mere existence of such liabilities—then estimated to be in the order of £560 million—was a huge concern to him as the SNP's finance spokesman. In another life and another role, he described the situation as absurd. However, the current situation is apparently now viewed by him with equanimity. Even though relatively few councils have resolved the issue, the indications are that the liabilities remain as great as before and, crucially, that our councils have very little in the way of reserves to meet them.
Although attention is currently focused on the council tax freeze, we should not forget that it was intended to be an interim measure prior to the introduction of a so-called local income tax. Of course, I assure David Whitton that the SNP's so-called local income tax will never happen in the Parliament, because the SNP's former Liberal Democrat allies are steadily retreating from the whole idea, partly because it is not a local tax at all—it will be a national income tax to fund council services—and partly because the Liberal Democrats have finally realised—
Will the member give way?
The member is in his final half minute.
The Liberal Democrats have realised that the tax does not suit the key groups among their target voters, even in Mr Rumbles's constituency. We will still have the council tax at the end of this parliamentary session, and sooner or later we are going to have to turn our attention not just to freezing council tax but to reforming it.
The member must conclude his speech.
That reform might be along the lines of what the Labour Party advocated previously, or along the lines of what we advocated for a pensioner council tax discount—we shall see. The council tax might be frozen, but it is still very much alive. The subject will run and run.
Today's debate has demonstrated that the budget settlement is a bad deal not just for Scotland but for individual communities.
There is a dishonesty at the heart of the budget, because there is not enough money to pay for what the SNP's manifesto promised. If the SNP has national priorities that it expects to be delivered throughout Scotland, it needs to be explicit and up front about the funding that will be available. Tavish Scott was absolutely right to say that never has less detail been available to the Parliament at this stage. Tom McCabe was also right to ask for greater transparency.
In his response tonight, will the cabinet secretary agree to publish what existing capital funds are transferring to local government during each of the years of the spending review period, what new capital grant is being added to the overall capital block, and the details of the distribution methods and calculations that underlie how the allocation to each local authority has been arrived at?
There is agreement throughout the chamber that we need a partnership between the Scottish Government and local authorities. The Government should not be setting up the local authorities for a blame game.
As Andy Kerr and Rhona Brankin made clear in their speeches, it is increasingly apparent to everyone that there is simply not enough money to meet the SNP's manifesto commitment to reduce class sizes. It is absolutely clear that the SNP manifesto commitment on the expansion of nursery provision will not be delivered either. George Foulkes used the example of Edinburgh where, when the SNP is calling for class size reductions at a national level, the future of existing schools is on the line and there is a lack of commitment to new schools. Ministers have also been rumbled over nursery provision. There is no point in ministers telling Edinburgh parents that there will be more access to nursery education if they are scrapping 300 free places that would have gone to the most vulnerable parents who are trying to return to education or are on low incomes.
I welcome the cabinet secretary's commitment to recognise the capital city status for which we have been calling. He will find that there is cross-party support for that in Edinburgh. However, I am disappointed at the lengthy timescale. Our SNP-Liberal Democrat council—already known as the council in crisis—faces a severe housing crisis and increasing policing challenges, so I hope for early action from the minister.
I will move on to waste recycling, which has not been mentioned today. The strategic waste fund is a classic example of a fund that was created by the previous coalition Government. It was set up to speed up Scotland's ability to meet the European Union's landfill targets and to ramp up our recycling rates. That investment was successful. It provided new money and made a real difference. I simply do not accept Keith Brown's rewriting of history. Only last week, the Cabinet Secretary for Rural Affairs and the Environment admitted that local authorities will face really hard choices. He admitted that he will not make it easy for them. Throughout Scotland, there are fears that the progress on recycling that has been made will be unpicked as the money disappears into local authority budgets to compete with schools and roads investment.
To say that the SNP Government has not thought through its proposals on flooding does not begin to describe the mess and confusion that have been created. Every time an SNP minister or Scottish Government official has answered questions in writing or at committee, it has become apparent that the implications of de-ring fencing flood and coastal protection investment have simply not been thought through. We have received a different story and a different explanation of the detail every time—just read the Official Report. As a demonstration of how unclear the Scottish Government's position is, MSPs from all parties in the Parliament—including those on the SNP benches—have had to ask some pretty fundamental questions.
The Scottish ministers have given no justification for why the formula for investment in flooding protection—whereby central Government provides 80 per cent of the funding and 20 per cent is matched at local level—is no longer appropriate. We have yet to receive a clear explanation. The cabinet secretary's statement today gave us yet another formulation:
"previously ring-fenced grants that are now rolled up, such as for flooding, will still be allocated to the same councils in the same way and according to the same practice as before."
I inform members that the current practice involves a bidding system. However, there is no reference to flood protection in the national outcomes, the national indicators or the targets. So what is the policy? We need to know now.
The awkward truth for SNP ministers is that, even though we all agree that the creaking, dysfunctional consent and planning processes need to be radically changed, the money that the SNP is putting into the system for future local government spending is simply nowhere near enough. On the Government's own figures, it is clear that significant increases will be required if flood protection schemes that are in development are to be delivered. The £42 million that is being spent this year will not pay for the £65 million of investment that it is predicted will be needed in 2008-09.
A freeze in council tax will be of little comfort to people who experience flooding in years to come. Some people in my constituency worry when we get severe and prolonged rainfall. However, as I have pointed out before, I am still waiting for an answer from the Scottish Government on whether the Water of Leith scheme will be funded in full. We need to know the principles of distribution that have been agreed with COSLA, the precise formula by which money has been allocated and what will happen to those schemes that are being worked up—there is a huge list of them—but which were not submitted as completed schemes by 14 November. Similar questions are waiting to be answered across the Government.
The debate has shown that the SNP Government stands ready to ditch its manifesto commitments on class sizes, the provision of nursery facilities, urban and rural public transport, and support for children with disabilities and their families. The SNP promised more in its manifesto than it could deliver, and it knew it. SNP ministers already have their excuse made up. Their argument will be that it is not their fault, as money was given to local authorities. They will say that it is the fault of local authorities if SNP priorities are not delivered. That is simply not good enough.
People in our communities are already beginning to bear the brunt of this dishonest budget. In Fife and Edinburgh, vulnerable people are first in line to see their services being squeezed and chopped. Labour members will defend the capacity of local government to provide high-quality public services that people need.
In his opening speech, John Swinney made great play of the ability to hold the Scottish Government and local government to account. However, as Gavin Brown demonstrated, the indicators that are in front of us today are utterly vague and totally meaningless.
We on the Labour benches want to make it clear that our objective is not to object to the removal of ring fencing per se, but to object when we see that not enough money is going into local government for national priorities that everyone agrees need to be delivered. The SNP has not said where the money will go or how much it will be. We need a clear commitment and clear funding for national priorities. The SNP has provided increases for inflation and to deliver the council tax freeze; they are not about new resources or meeting new national policy priorities. We will not let the SNP off the hook. The real test of the settlement will come into play when local authorities throughout Scotland set their budgets. That is when this settlement will truly fall apart.
First, I will address some of the specific points that members raised in the debate. Gavin Brown asked why we had made no announcement on the phasing in of the small business bonus scheme. I say to him that I made the situation clear in my budget announcement of 14 November. The phasing in of the scheme is also expressly stated on page 12 of the budget document.
Mr Rumbles raised the funding situation for Aberdeenshire. I assure him that, in each of the three years of the budget settlement, Aberdeenshire Council will receive an allocation that is higher than the average for Scottish local authorities.
Does the cabinet secretary accept that, in its FairShare campaign—which all three of the council area's constituency MSPs allegedly support—Aberdeenshire Council says that if the settlement had been divvied out on a fair basis, it would have received another £29 million in the next financial year? The sum of £29 million is missing.
Aberdeenshire Council is receiving an allocation that is higher than the average for Scottish local authorities.
Mr McArthur might be interested to know that 1,733 businesses in his Orkney constituency will benefit from the small business bonus scheme. I am sure that he will write to each of them to tell them that he congratulates the Government on the intervention that it has made.
If it is significant that Aberdeenshire Council's allocation is above the average in each of the three years, is it not also significant that Aberdeen City Council's allocation is below the average for each of those years?
I was addressing Mr Rumbles's point on Aberdeenshire. I deal with facts. In that instance, I was dealing with the fact that Mr Rumbles had not given Parliament an accurate reflection of the Government's position.
When I write to the businesses in my constituency, I would also like to give them an answer to the question why the transport investment that the previous Executive pumped in over the past three years appears not to be part of the settlement.
Mr McArthur will find that, in the settlement for 2008-09, Orkney Islands Council will receive a year-on-year increase of 6.68 per cent. Given that the national average increase is 4.55 per cent, Orkney Islands Council's increase is the third highest in Scotland. The Government cannot be accused of not supporting services adequately in the Orkney Islands.
Mr Kerr accused us of using the mechanism for the distribution of moneys to meet the cost of the council tax freeze to punish local authorities that have poor collection rates. I assure him that our council tax income figures take into account predicted non-collection rates in different parts of the country. He has no reason to be up late tonight worrying about that.
Mr Scott asked about the bus route development grant. I assure him that that has been incorporated into the local government settlement. Part of the additional funding that I announced today will go towards demand-responsive transport and regional public transport grants.
Derek Brownlee said that the concordat makes it clear that no structural reform will be undertaken in this session. That is absolutely correct. However, the Government does not want the view to take hold that somehow, in the absence of structural reform, organisations do not need to work effectively together to deliver more cohesive public services at the local level. Indeed, an essential element of the Government's public sector reform agenda is that effective delivery is taken seriously at the local level.
Mr Purvis said that the single outcome agreements will involve only local authorities and not other partners. In my discussions with a range of partner organisations, I have been encouraged by their willingness to be involved in the single outcome agreements. My firm expectation is that all local authorities will have a single outcome agreement in place for 1 April 2008. I hope that all community planning partnerships will have single outcome agreements in place with the Government in 2009. I will certainly encourage that, to ensure that we draw together effectively the areas of local public service.
On the policing of the deal, will the cabinet secretary clarify the Cabinet Secretary for Education and Lifelong Learning's statement to the Education, Lifelong Learning and Culture Committee that if a local authority chooses not to implement all the national Government's priorities in their entirety, that local authority will not benefit from the end of ring fencing or be able to keep its efficiency savings? How would that operate in practice?
The Government will have positive discussions with local authorities to establish single outcome agreements—that is the positive message that the Government sends out.
I will spend some time addressing Mr McCabe's points because, not for the first time, he made a substantial contribution to the debate and raised significant issues. He made two essential points. The first was about how key services on which there is no great spotlight—in terms of resourcing or design—are protected under the formula. The second was about how local people can exercise control over these matters. I acknowledge that those are big issues.
In relation to the first point, Mr McCabe mentioned mental health services. The Government's performance framework has a specific indicator on mental health, which illustrates how we must make a choice about the factors that we assess to judge in the round the effectiveness of the delivery of services. The framework is the Government's contribution to that debate and I have confidence in it. However, we must accept that we need to examine carefully all the relevant indicators to guarantee that we track performance properly on the issues about which Mr McCabe expressed concern.
On the second point, in many respects, the greatest intensity of pressure to deliver on people's expectations is on local organisations and authorities. If anywhere is remote, it is the Parliament, because we are not in the front line, taking the difficult decisions in communities. The element of public pressure on local authorities is fundamental. I hope that my comments have addressed Mr McCabe's points. I look forward to further debate on them in the same fashion.
Will Mr Swinney take an intervention?
I will.
I am grateful to Mr Swinney for that, because he was not in the chamber when I asked several questions. I have a key question for him. The First Minister said clearly on two occasions in the Parliament that class sizes in primaries 1 to 3 would be reduced to 18 by 2011. Was he telling the truth?
Perhaps Rhona Brankin will go away and read the concordat, because it makes the position on that crystal clear.
Will the member give way?
In one second.
Sarah Boyack mentioned capital city status for Edinburgh and bemoaned the Government's timetable for addressing the issue. However, we have started to tackle it in six months, whereas her Government did nothing about it in eight years.
The minister read my mind. Although, in common with the other Edinburgh members, I am glad that Edinburgh's situation has been recognised and that a study is to be carried out, I am worried about the two years that the study will take. I spoke on the telephone to officials this afternoon, but they were not absolutely certain of the up-to-date situation for Edinburgh. However, I notice that annex B of the explanatory notes on the local government finance settlement has a line that says, "To be distributed later". Could we have money distributed later to bridge the terrible crisis that may well arise in Edinburgh in the next two years?
Just to be picky, I gently point out to Margo MacDonald that the study will take about 18 months, not two years. I am glad that she said what she did because she has been clear in making her point to me about Edinburgh's capital city status, and I am glad that we have got some movement on the issue. It is likely that Edinburgh will receive part of the resources that are to be distributed at a later date, particularly in relation to affordable housing. I hope that that will be made clear in the next few weeks.
I have two final remarks. Mr Whitton cited the Burt review and the critique of local income tax. I politely say to Mr Whitton that the Burt review did not have much to say about the council tax either, which it felt was beyond redemption.
My final point is about the concordat, the status of which has been the subject of a tremendous amount of debate. The concordat is extremely important to the Government and to local authorities because it creates a completely new way of working, whereby central and local government in Scotland can work collectively to achieve shared priorities and shared objectives.
Last night, I answered 140 parliamentary questions from Mr Kerr, every one of which was about the concordat, about which he has been particularly exercised. As it costs £100 a time to deal with a parliamentary question, £14,000 was spent on dealing with those PQs alone. Just think what we could have spent that money on instead. One gentle and delicate—[Interruption.]
Order, Mr Kerr.
I will take an intervention from Mr Kerr, if he will just let me demolish the point a little bit more.
You are in your last minute.
I will take an intervention, Mr Kerr—don't you worry.
You have one minute left, Mr Swinney.
We will hear from Mr Kerr, then.
Is Mr Swinney somehow suggesting that, in asking questions about the concordat, I was not exercising my right to find out whether his Government will be responsible for his manifesto pledges, which he knows fine well he cannot deliver? Will he reflect on the fact that when we were in government, we had many agreements with local authorities? Every time we imposed what the SNP called an additional burden, we fully funded it, which this Government has failed to do.
Minister, you should be winding up now.
I am glad that I took that intervention, because it shows how prickly Mr Kerr is about the issue. One appearance by him at the Local Government and Communities Committee would have enabled him to ask every one of those questions of me, but he did not bother to attend the committee's meeting to get those answers in person.
You should close now.
I will do, Presiding Officer.
Let me finish on a beautiful point. In between answering the 140 questions from Mr Kerr, I went on the internet and typed in the word "concordat". Members will never guess what appeared. What appeared was the central Government-local government concordat that was signed yesterday, 12 December, between Her Majesty's Government and the Local Government Association of England and Wales. [Interruption.]
Order. Briefly, please.
That concordat contains a commitment to dramatically reduce ring fencing. Thank goodness we were ahead of the game.