Official Report 1515KB pdf
Finance and Local Government
The next portfolio is finance and local government. Again, we have the same provisions that I set out earlier in terms of the time pressures that we are under over the course of this afternoon and this evening.
Budget 2025-26 (Aberdeenshire Council)
To ask the Scottish Government what analysis it has undertaken of the potential impact of the funding allocated in its budget 2025-26 on Aberdeenshire Council’s ability to invest in local infrastructure and support economic development. (S6O-04970)
The 2025-26 budget provides local government in Scotland with record funding of more than £15.1 billion. As a result of the Scottish budget, Aberdeenshire Council received a record funding settlement worth £627.7 million to support day-to-day services. How that funding is deployed to deliver local services, statutory duties and nationally agreed priorities is of course a matter for locally elected members.
It is clear from conversations with constituents that local services are their biggest priority. Those services are overstretched and underfunded by the Scottish National Party Government, with potholes that will not be fixed, grit bins being removed and bridges closed, breaking communities in two. Park bridge closed in 2019 and Aboyne bridge closed in 2023. Those are just two examples of more than 50 bridges that are at risk in Aberdeenshire.
Record funding aside, Aberdeenshire Council remains one of the lowest-funded local authorities in the country, because it receives around 10 per cent less funding per head than the Scottish average, despite being the third-largest geographic area. Will the cabinet secretary commit to ensuring that Aberdeenshire Council receives the funding that it needs to maintain its critical infrastructure?
I welcome Alexander Burnett’s acknowledgement in his supplementary question that there was record funding for local government and for Aberdeenshire Council. If memory serves me correctly, the independent Accounts Commission has confirmed that there has been a real-terms increase in funding over the past three years.
It is up to each council to decide which infrastructure priorities to take forward. We help with the capital allocations to local government, which also has the ability to borrow to progress infrastructure investment projects. The funding formula that Alexander Burnett referred to is agreed by the 32 local authorities through the Convention of Scottish Local Authorities. It is not for the Scottish ministers to change the funding formula, so I suggest that he takes up that issue with COSLA.
Empowering Communities Programme
To ask the Scottish Government what assessment it has made of the empowering communities programme, including the impact of the investing in communities fund. (S6O-04971)
Our empowering communities programme is a much-valued mechanism that provides funding to communities across Scotland to support delivery of regeneration. The programme covers a range of community funds and grants that build capacity in our communities and deliver regeneration, including the investing in communities fund. To understand their impact, the funds and grants are routinely assessed through established grant monitoring and reporting processes.
The programme, particularly the community fund, has been a huge success story across Scotland, and nowhere more so than in my constituency of Glasgow Anniesland, where Kingsway Community Connections’ proud, capable and confident programme received more than £280,000 of funding to build social capital in the community, and it has become part of the heart of the community.
Given the programme’s success and impact, can the cabinet secretary give an indication of the future of the fund when the current three-year funding round comes to a close?
I echo those comments on the value of projects such as Kingsway community connections. Decisions concerning future Scottish Government funding programmes will be considered and addressed through the budget and the spending review processes.
All organisations that receive funding from the ICF are aware that it is a three-year fund and have been asked to consider how their projects will be sustained after the ICF funding period ends on 31 March 2026, but those will be active discussions.
Local Authority Senior Officer Pay and Conditions
To ask the Scottish Government what discussions it has had with the Convention of Scottish Local Authorities about increasing the transparency of senior officer pay and conditions alongside improved democratic oversight and accountability. (S6O-04972)
The Scottish Government respects the independence of local government and it is for individual councils to manage their own budgets and workforce, including their senior officers.
However, I am aware of recent press coverage of senior council officers’ early retirement and redundancy payments. I note the findings of the Accounts Commission’s recent report on the situation. I urge all councils to take action in response to the report’s recommendations in order to uphold the highest levels of integrity in our public services and to prevent similar situations from occurring in the future.
The cabinet secretary is absolutely right to mention the Accounts Commission’s report on what happened in Glasgow, where senior council officers saw fit to award themselves eye-watering sums in pay-offs. I have no doubt that we will all be equally appalled the next time that it happens, unless action is taken, so I ask the cabinet secretary to go further in her answer to me.
Today, will she commit to re-establishing proper democratic oversight in our councils by issuing clear guidance that decisions on senior officer pay-offs must rest with elected councillors and not be quietly delegated to officers? Will she further commit to monitoring compliance with that guidance and reporting back to the Parliament?
Let me say a few things about that. The Accounts Commission wrote to every council to ensure that its recommendations were carefully considered. We will work with local government to support elected members and council officers to operate with integrity and transparency.
It is important that every council implements the Accounts Commission’s recommendations. It concluded that there was an absence of independent scrutiny from councillors and of formal documentation detailing how decisions were made and whether they demonstrated value for money. Councillors were not informed about those decisions, and they should have been involved in the decision-making process.
Governance arrangements have to be improved. The new chief executive of Glasgow City Council has rectified many of the issues, with input from councillors. The Accounts Commission report will lead to all local authorities implementing the recommendations to ensure that nothing like what happened in Glasgow can happen anywhere else.
Huge sums of taxpayer money have been used to line the pockets of penny-pinching paper pushers in Glasgow as they sail off into taxpayer-funded early retirement. There is no accountability. Will the cabinet secretary ensure that there is a code of conduct for council chief executives and officers, with proper sanctions, to stop rogue officers exploiting the public purse for personal gain?
I reiterate that the Accounts Commission has investigated and has written to every council to highlight its recommendations and the importance of elected members and officers following the Nolan principles of public life. As I said, the new chief executive of Glasgow City Council has rectified the issues, with input from councillors. The council leader, Susan Aitken, has made clear her absolute outrage at what happened in the authority, and an agreement has been reached with Strathclyde Pension Fund for the former chief executive to repay some money to the council.
These are serious issues, but it is important to be clear that there has been no inference that such practice is widespread across our local government structures. The issue was particular to Glasgow City Council, and the Accounts Commission has responded in a very strong manner.
Road Safety (A84)
To ask the Scottish Government how much it has allocated in its budget for the improvement of road safety on the A84 trunk road between Stirling and Lochearnhead. (S6O-04973)
Through the 2025-26 casualty reduction budget, Transport Scotland has programmed £120,000 for road safety work on the A84.
Will the cabinet secretary explain the budget prioritisation process and how the views of local communities are reflected in it?
Evelyn Tweed will appreciate that responsibility for Transport Scotland and its operations is outwith my portfolio, but I will get the Minister for Agriculture and Connectivity to write to her with details of how the prioritisation process works. I am sure that the minister will be happy to meet Evelyn Tweed to discuss those matters in more detail.
Budget 2025-26 (Waste Management Services)
To ask the Scottish Government what funding it has allocated from its budget 2025-26 to support local authorities to improve waste management services, in line with its plan for a transition to a circular economy. (S6O-04974)
The 2025-26 budget delivered record funding of more than £15.1 billion for local government, which represented a real-terms increase of 5.5 per cent, as confirmed by the Accounts Commission. How that record funding is deployed to deliver local services and statutory duties, such as waste management services, alongside nationally agreed priorities is, of course, a matter for locally elected members.
In addition, we are making one of the biggest investments in a generation to modernise recycling in Scotland through the £70 million recycling improvement fund. In 2025-26, £13.9 million is allocated to local authority projects to improve recycling and reuse services.
Clearly, record funding and the recycling improvement fund are not working, because recycling rates in Scotland have stalled. The 2013 target has still not been met more than a decade on, so there is clearly a need for sustained support to help councils to make the required progress. Does the minister agree that ring fencing extended producer responsibility funds for recycling infrastructure could provide a stable, long-term solution that could also deliver wider investment and new jobs across Scotland?
The fund that Maurice Golden refers to is managed by the United Kingdom Government, which allocates that money directly to local authorities. We are engaging with the Convention of Scottish Local Authorities and the UK Government on how the fund is operating, but, as I said, we are not responsible for its collection or management.
Statistics show a reduction of 61 per cent since 2011 in the amount of Scottish waste that is landfilled. The recycling rate in Scotland was 62.2 per cent in 2023, which represents significant progress. Only around 14 per cent of the waste that we produce is processed elsewhere. Therefore, we are making progress, but we recognise that there is more work to be done in this area.
The key to delivering a circular economy locally and to creating jobs is to set targets for reuse. Spain, Portugal, France and Belgium are making progress on it, so will the Scottish Government set a reuse target and support local authorities with advice and finance to deliver on it?
As I have indicated, our recycling improvement fund has allocated more than £66 million to 48 projects and 27 local authorities in order to deliver more frequent recycling collections and boost Scotland’s capacity to recycle problematic materials such as plastic film. We are also the first Government in the UK to commit to action on single-use vapes—from 1 June 2025, they can no longer be stocked or supplied in Scotland. We are taking measures to make a difference, and the numbers demonstrate that we are making progress.
Social Housing (Funding)
To ask the Scottish Government what discussions the finance secretary has had with ministerial colleagues regarding different funding models that may be available to finance the building of social housing, in light of the approach adopted by Falkirk Council which awarded Hearthstone Investments £30 million through its local government pension scheme fund to invest in social and affordable housing in 2015. (S6O-04975)
The investment by the Falkirk pension fund was accompanied by significant public subsidy to deliver affordable homes. In recent years, ministers, including the Cabinet Secretary for Finance and Local Government, have focused on models that can leverage more investment to make public subsidy stretch further. A return is needed no matter the source of the capital, whether it is public sector pension funds, capital markets or traditional borrowing.
On housing, recent market testing for our new fund for mid-market rent has shown strong demand and that it will be able to build on the investment that has already been secured, including from public and private pension funds through similar routes.
Notwithstanding that it will need some public funding, I put this proposal because it is my understanding that the total of the local government pension scheme fund in Scotland amounts to almost £60 billion, which is 140 per cent of what is required to service the pensions. Does the minister agree that that 40 per cent surplus—which, at the very least, is just under £20 billion—could be invested in building social housing for rent, which would be an ethical investment of local government pension funds and, importantly, would contribute to reducing council waiting lists for housing?
Christine Grahame is absolutely right to raise that issue. She will know that the £60 billion figure for Scottish pension funds is, pro rata, significantly higher than the figure for the United Kingdom as a whole and that Scotland’s 11 local government pension schemes are in a strong position.
I met representatives of local government pension schemes and others last week to press the case for them to invest more of their resources in housing and other infrastructure opportunities in order to support Scotland’s economy.
The Deputy First Minister is leading overall on that work to attract more investment into Scotland’s economy so that our performance and capital investment can match our successful performance in attracting foreign direct investment. That is something that we will continue to do.
I reiterate the point that, in order to build affordable housing, no matter the source of the capital, significant public subsidy is required.
Public Sector Pay Deals
To ask the Scottish Government what assessment it has made of whether its current above-inflation public sector pay deals have appropriate contingencies in place, in light of the recent rise in the consumer price index and reported concerns regarding inflation. (S6O-04976)
The Cabinet Secretary for Finance and Local Government (Shona Robison): Pay costs are managed in line with the Scottish Government’s wider financial management approach, which reflects the requirement to balance its budget in-year. That means that spending must not exceed income in any financial year. To manage the impact of additional pay costs, cabinet secretaries are responsible for setting and managing their portfolio budgets in-year, including for pay. We remain focused on delivering fair pay while ensuring that the public pay bill remains fiscally sustainable.
Does the cabinet secretary accept that prioritising above-inflation pay rises can fuel further inflation while, at the same time, draining funds from vital areas such as social care and capital expenditure? Consistently going above pay policy makes unions more likely to push for even higher settlements. Is it not time that the Scottish Government was honest about trade-offs instead of pretending that there is a limitless supply of money from the taxpayer?
It is interesting that Alexander Stewart mentions social care. We have supported pay in the social care workforce to ensure that we can recruit into that workforce to look after our growing elderly population and those who need that level of support. That was a very interesting example for Alexander Stewart to use.
We have set out the requirement for multiyear pay deals, which is important, because that allows us to have certainty and to reduce the risk of any industrial action, which brings its own huge costs. Through those multiyear pay deals, we are able to take forward the important reform work that Ivan McKee is leading on through the public service reform strategy.
United Kingdom Budget
To ask the Scottish Government what recent discussions it has had with the UK Government regarding the next UK Budget, which will be delivered on 26 November. (S6O-04977)
I met the new Chief Secretary to the Treasury, James Murray, on Monday, when I impressed on him the need to prioritise investment in public services, infrastructure and support for the most vulnerable in society in the UK autumn budget. I will have further conversations with him next month. It is vital that the UK budget delivers the funding that Scotland needs.
I note the slashing of capital spend by the UK Government that was forecast in the Scottish Government’s medium-term financial strategy. Can the finance secretary please advise me what impact that will have on the Scottish Government and on local authorities, which want to invest in public services and public infrastructure in Scotland?
The UK spending review means that Scotland’s capital block grant will reduce by 1.1 per cent in real terms between 2025-26 and 2029-30. That is compounded by the historic real-terms cut to our block grant by the previous UK Government and by sustained high levels of inflation.
Work is under way to develop the next multiyear Scottish spending review and infrastructure pipeline. Difficult decisions will need to be taken to reprioritise our capital programme to ensure that it is deliverable and fiscally sustainable and that it drives progress against our priorities.
That concludes portfolio questions on finance and local government. I am minded to suspend the meeting briefly, as we are missing a couple of colleagues for the next item of business.
14:48 Meeting suspended.Previous
Point of Order