Meeting of the Parliament

Meeting date: Tuesday, March 24, 2020

Official Report 893KB pdf

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Local Government Finance (Scotland) Order 2020 [Draft]

The next item of business is a debate on motion S5M-21327, in the name of Ben Macpherson, on the Local Government Finance (Scotland) Order 2020.

16:52  

The purpose of today’s short debate on the Local Government Finance (Scotland) Order 2020 is to seek Parliament’s approval to update the guaranteed allocations of revenue funding to individual local authorities for 2020-21 that were originally approved by Parliament on 10 March.

Last week, the Scottish Government—recognising the challenges that were faced by businesses as a result of the Covid-19 outbreak—took immediate action by announcing a package of support worth £2.2 billion to limit the impact on Scotland’s business community. That package of measures includes 100 per cent rates relief for all retail, hospitality and leisure properties, which will result in Scotland’s local authorities collecting significantly less non-domestic rates income than they could have expected. Legislation dictates that the distributable non-domestic rates income cannot be changed after 1 April, which is why we are having to rush through the debate on the order this afternoon. Any additional funding that is provided to local government as a result of the Covid-19 outbreak will be provided separately and is not included in the order.

It is important to note that the Scottish Government will continue to guarantee each local authority the combined general revenue grant plus non-domestic rates income. In view of that, the purpose of the order is to reduce the distributable non-domestic rates income by the £972 million that is being provided by the Scottish Government to Scotland’s businesses through a corresponding increase in general revenue grant. I can also confirm that any additional loss of non-domestic rates income resulting from the adverse impact of the Covid-19 outbreak will be compensated for by the same increase in the general revenue grant and therefore at no detriment to local government.

The order seeks Parliament’s approval for the distribution and payment of the same £9.9 billion that was debated on 10 March. That £9.9 billion is a combination of general revenue grant that has been increased to £8 billion and the distributable amount of non-domestic rates income, which has now been set at £1.9 billion.

The total amount of funding that the Scottish Government will provide to local government next year remains at £11.4 billion, but the split between general revenue grant and distributable non-domestic rates income has changed considerably. The key point is that each local authority will receive exactly the same guaranteed total funding package as was approved by Parliament on 10 March.

I move,

That the Parliament agrees that the Local Government Finance (Scotland) Order 2020 [draft] be approved.

16:55  

When I saw that the order was coming up, it felt like groundhog day. I thought, “We’ve already debated this, haven’t we?” I recall that it was an unexpectedly entertaining debate, which was all about the overall funding package for local government. We have covered that ground but, as the minister has explained, the order is before us for an important technical reason, which is to do with Covid-19 and providing the flexibility to give local government the same amount that it would have got, but in a different way.

Presiding Officer, you will be pleased to hear that I will not take up any more of your time. The order is not controversial, and we will support it.

16:56  

I was told that we had three minutes for our speeches, so in time-honoured tradition, my speech is probably five minutes long.

I, too, support the order. It is absolutely crucial that our local authorities continue to have the funding that they need to enable them to deliver services in what is an unprecedented crisis. I thank our local government colleagues for the feedback that they have given me over the past few days. I know that they have lots of concerns about ensuring that the social care sector is supported. There is particular concern about social workers—there is a specific issue with access to personal protective equipment for social workers. I put on record the fact that we would be keen to get feedback from the Scottish Government on what it can do to assist local authorities. I do not expect the minister to give an answer now; I would have made that request to the First Minister earlier.

I have also been made aware of Inclusion Scotland’s concern about the fact that vulnerable and disabled people and their carers have already lost their social care support with no notice as a result of the coronavirus.

This guarantee of funding is absolutely crucial for our local authorities, because it will enable them not just to continue to provide key services that we take for granted, such as waste services and education services, but to put in place new services and to work with the third sector to support our constituents over the next few weeks and months of the crisis.

Finally, I ask the minister to confirm that he will work with his colleague Kevin Stewart, the Minister for Local Government, Housing and Planning, to respond to local authorities when they ask for help, to review progress and to ensure that vital services continue, alongside the new support that is being developed for the third sector, which was announced in the statement on support for communities last Wednesday.

We very much welcome the order, and we will support it at decision time. If the minister cannot answer my question today, I would be grateful for an update afterwards.

Thank you for that five-minute contribution.

17:58  

I will be brief, too. As the minister acknowledges, the order is a technical requirement that, obviously, we will support.

I want to use the opportunity to say a very big thank you to all those who are working in local government. This has been a big surprise for them—quite a shock to the system. Local government operates a complex network of services on the front line for the public in Scotland. Logistically, Covid-19 is posing huge challenges, so I pay tribute to everyone who is working extremely hard in these difficult circumstances.

I also note the emotional toll that those circumstances are taking on public service workers across the public sector, because of course they are, at the same time, increasingly dealing with family issues, whether that is children out of school, loved ones who are ill or relatives who need care.

Of course, we will all face substantial financial challenges over the next months. I really have nothing more to say, as this is not really a debate. We will support the motion at decision time.

17:00  

We support this emergency measure. Councils need the finance to deliver the new policies and laws that are being passed at a great pace by the Scottish Government and the Scottish Parliament. The rate that new Government policy is being developed is astonishing and we have to commend the officials for the work that they do to develop it and the councils that have to make sure that sometimes incomplete policies are delivered in practice. A number of issues will be thrown up as those new policies are developed into practice.

Businesses that have a rateable value of between £15,000 and £18,000 and might in England have looked forward to grants of £25,000 will find that they are going to get only £10,000 in Scotland. That is not a massive issue in the context of the scale of the crisis that we are dealing with, but it is something that I hope the minister will be able to reflect on in due course.

Some businesses that work in the hospitality sector have discovered that they are not considered as hospitality, such as the Kingsbarns Distillery in my constituency, and will perhaps lose out on significant support that would keep them going. A number of issues are being thrown up—for example, key workers wonder whether they will have their childcare costs covered in full as a result of the policies that are being passed: something that I am sure they would find comforting if that was to be the case.

At the end of this crisis, we will have to deal with the financial legacy that will need to be cleaned up. We are going to have to find a way of paying for all this. I hope that there is a review mechanism for local government so that when we look at the end of this crisis at how different parts of government have fared we consider whether local government got the right finances at the right time. Councils need to make the right decisions now without worrying about whether they have all the money that they need to make them happen. I hope that there is a review process to consider those important decisions.

17:02  

The pandemic that we face is disrupting lives like never before. A key priority and focus of the Scottish Government in partnership with local government will be to ensure our communities are supported and protected as much as possible under the current circumstances and I, too, thank local government.

In the local government finance settlement, the Scottish Government will provide local authorities with a total package worth £11.4 billion, as I said, but as we now know that is only part of the overall funding that we will provide to our local government partners and the wider business community.

We have already announced an additional £350 million fund to support our communities, alongside the £2.2 billion package of support for the business community. Working with local authorities and the UK Government, we will continue to respond at scale and at pace to provide further support to the people of Scotland, particularly those who are most at risk.

I thank parliamentary colleagues for their unanimous support for the Local Government Finance (Scotland) Order 2020, which will help to show our local government partners and the wider Scottish community that the whole Parliament is working together through this unprecedented crisis to ensure that our local authorities can continue to support and protect our local communities in the coming weeks and months.

That concludes the debate on the Local Government Finance (Scotland) Order 2020.

We have a number of orders and motions to proceed through but, before we come to decision time, I would like to say a few words to members. Colleagues here will have seen the reduced parliamentary business schedule that we are about to vote on, which means that, after today, Parliament will not sit until next Wednesday. Parliamentary committees are similarly reducing their schedules. That is the right thing to do as we implement the public health advice and play our part in fighting Covid-19 and keeping our staff and constituents safe.

However, I reassure members that the situation is being kept under constant review, and my officials and I will continue to liaise closely with the Scottish Government and all the political parties to keep you fully updated.

I also make the point that parliamentary scrutiny will continue. Just as I know that you all remain available to your constituents via telephone, email and other channels, I remain contactable by members directly and through my private office.

We will take all necessary steps to keep members safe, but we will also, as members and as a Parliament, continue to function at this vital time.