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Chamber and committees

Meeting date: Wednesday, February 24, 2021

Meeting of the Parliament (Hybrid) 24 February 2021

Agenda: Portfolio Question Time, Prisoner Voting, Urgent Question, Local Government Funding, Business Motion, Parliamentary Bureau Motions, Decision Time, Citizens Advice Scotland


Local Government Funding

The Presiding Officer (Ken Macintosh)

Our next item of business is a Conservative Party debate on motion S5M-24206, in the name of Annie Wells, on fair funding for local government. I encourage all members who wish to participate in the debate to press their request-to-speak buttons.


Annie Wells (Glasgow) (Con)

I am delighted to be given the opportunity to speak in this important debate and in support of the Scottish Conservatives’ motion.

Local government across Scotland is in crisis. The societal and economic impact of the Covid-19 pandemic has undoubtedly placed significant pressure on the ability of local authorities to deliver essential public services. The severity of the challenge that local authorities face has been made clear by the Convention of Scottish Local Authorities, which has issued a stark warning that councils are facing a combined budget shortfall of approximately £511 million going into 2021-22. It goes without saying that it is a deeply concerning situation for us all.

As the crisis dawned last year, local authorities across Scotland needed the Government in Edinburgh to have their back. They needed the Scottish National Party to equip them with the tools and funding that they required to lead our communities through the pandemic, to support our local businesses with a smooth administering of essential Covid financial support, to make sure that the roads and streets were properly gritted in anticipation of harsh weather, and to guarantee regular, timely bin collections.

An unprecedented crisis demands unprecedented support. Ambitious support in the present circumstances is necessary to deliver the bread-and-butter services that many of us have had to rely on more than usual during the past 12 months. Sadly, the support that local authorities have required has not been forthcoming. Indeed, the lacklustre support for our councils during the pandemic has been part of a larger pattern of the SNP’s long-standing behaviour towards local government in Scotland.

It is astonishing that, as local councils face new and existing challenges in responding to residents’ needs, the total amount of money that the SNP Government has given local authorities has fallen by £276 million in real terms during the past seven years. Let me be clear: long before Covid-19 crisis began, the SNP Government had been short changing Scotland’s councils, which has undoubtedly diminished their ability to respond to the diverse needs of local residents across Scotland.

With the most recent budget, which was drafted in extraordinary and difficult circumstances, the SNP Government still refuses to go that extra mile to support local government. As confirmed by COSLA, the SNP Government is offering Scotland’s councils a budget uplift of less than 1 per cent in 2021-22. That figure is truly shocking when compared with the Scottish Government’s own budget for 2021-22, which has increased by a whopping 9 per cent from last year to £44.1 billion, thanks to unprecedented support from the United Kingdom Treasury.

The SNP makes a lot of noise about needing more money and borrowing powers to respond to the pandemic, but while the UK Government has stepped up to the plate, the SNP Government, by contrast, has refused to extend the same support to Scotland’s struggling local authorities.

At a time when our local councils are facing the huge financial black hole that I mentioned, it is quite staggering that the SNP has set aside more than £0.5 million to prepare for another independence referendum this year. The persistent underfunding of Scotland’s councils by this Government is simply no longer acceptable. We must do better.

It is clear that Scotland’s councils get a rotten deal from the SNP Government, and that means that the Scottish people are getting a bad deal, too. That must change. It is clear that the current funding model is no longer fit for purpose, and that is why I support the Scottish Conservatives’ motion.

The goal of the model that we are proposing today is to urgently address the SNP’s unwillingness to properly fund our councils. The new model would create a permanent financial settlement for local government, legally mandating the Scottish Government in Edinburgh to deliver a ring-fenced percentage of the budget to local authorities. That would provide cash-strapped councils with the financial security, certainty and autonomy that they crave to play a leading role in helping our communities to rebuild and bounce back from the pandemic.

Our new fiscal framework would also be used to determine the allocation of capital and revenue funding that each council across Scotland received each year, meaning that councils would have the appropriate resources to respond to the biggest challenges and opportunities in their own areas. The proposed framework would put an end to the days of local councils being subject to the whims of the national Government in Edinburgh. Such behaviour has been made evident by the SNP Government, which has raided council budgets for years to pay for its own vanity projects. Instead, mirroring the way in which the block grant is provided to the Scottish Government by the UK, local councils would be secure in the knowledge that they were guaranteed to receive a set amount of the Scottish budget each year.

Our proposed new fiscal framework would give local authorities the vote of confidence that they deserve to fulfil their responsibilities to the Scottish people. Unhindered by constant financial woes and diktats from Edinburgh, Scotland’s councils would be able to plan ahead for the future and deliver the best local services as we all look to emerge brighter from the pandemic.

As countries around the world combat the coronavirus, the attention of the public largely falls, understandably, on how national Governments respond to crisis. The important role that local government plays in shaping people’s lives cannot be overstated, because for many people, local government is the first port of call, given that it is responsible for the essential services that they rely on.

Our party has a clear vision: we want to empower local councils with fair funding to fully support them in their efforts to deliver for their communities. With the new fiscal framework, we have a chance to achieve that vision and I urge Opposition parties to support the motion.

I move,

That the Parliament believes that local government should have its own fiscal framework that will automatically entitle it to a fixed proportion of the Scottish Budget each year, thereby enshrining fair funding in law.


The Cabinet Secretary for Communities and Local Government (Aileen Campbell)

A debate about the future of local government and how the Scottish Government should fund our councils benefits from being set in the wider strategic context of work to consider how Scotland is governed overall. In that context, the Scottish Government is committed to the principle of subsidiarity and local self-determination, and the joint local governance review with COSLA is key to delivering what are shared ambitions. Considering how we share power, responsibilities and resources, not just between the Scottish Government and local government but with our communities, is a route to reforms that can deliver the best possible outcomes for people.

In response to the review’s initial findings, we jointly announced with COSLA that we will further empower communities and local councils across Scotland. We believe that that will help to create a vibrant and equal democracy where people understand their rights and actively participate in civic society.

The response to Covid-19 has once again shown that communities can achieve great results when they are trusted and resourced to take decisions about issues that make a big difference to people’s lives. We also know that the way that power and resources are shared between national and local government across all our public services contributes to the success of different places.

COSLA’s submission to the local governance review and subsequent blueprint for local government set out an ambition for functional and fiscal empowerment of local government, and made clear how that interlinks with our efforts to enhance community empowerment. The review creates an opportunity for councils to submit place-specific proposals for alternative governance arrangements that would help to deliver that ambition.

As part of the review, we already have agreement to jointly develop a fiscal framework between the Scottish Government and local government. We view it as another important opportunity to further strengthen our partnership and to empower local government. Due to the pandemic, work on that has been paused, but we are committed to introducing the framework in the next parliamentary session, if returned.

The debate is timely because, alongside our work on local governance, today we concluded stage 2 of our deliberations on Andy Wightman’s member’s bill on the incorporation of the European Charter of Local Self-Government into domestic Scots law. Our support for the bill symbolises the value that we attach to our relationship with local government as a sphere of government that we value and respect. It also symbolises an opportunity to create the conditions for further and more ambitious reforms and strengthens our relationship with local government by putting it on a legal footing.

However, that is not the end of our joint work and partnership with local government. As I said in response to the stage 1 debate on Mr Wightman’s bill,

“regardless of whether you have ‘Councillor’ before your name or ‘MSP’ after it, we are all here to serve and empower our communities, to make life better and to make society more equal and fairer.”—[Official Report, 4 February 2021; c 71.]

That endeavour is captured in our national performance framework, which articulates local and national Government’s shared aspiration for Scotland to be a country with dignity, fairness, respect and wellbeing at its heart.

That is also why, when the Cabinet Secretary for Social Security and Older People and I set up the social renewal advisory board back in June to advise Government on how to navigate a path for Scotland that leads us towards equality and fairness as we emerge from the pandemic, the board included representatives from local government. If we want to achieve the ambition of reducing poverty and disadvantage, it will require all of us from across all sectors to work hard and in partnership to support the people and communities of Scotland.

Moreover, we are also supporting many local authorities to use community wealth building as a practical approach to local economic development to support and prioritise improved wellbeing as a core part of the economic activity happening in their places. That includes looking at ways to maximise the role that public investment can play in creating opportunities in communities across Scotland and encouraging more small and medium-sized enterprises, co-operatives and other inclusive business models into the market. It also ensures and encourages a less extractive economic model and enables much-needed resources to stay local and benefit our communities.

I cite the joint working that we do, our support for the European Charter of Local Self-Government (Incorporation) (Scotland) Bill, our work on community wealth building and our work on local governance, which already includes a fiscal framework. All of that does not fit neatly into the negative narrative that the Conservatives have brought to the chamber today, and nor does it fit into the realities of the budgetary support that the Government has provided.

The 2021-22 local government settlement of £11.6 billion will provide a cash increase in local government day-to-day spending for local revenue services of £335.6 million, or 3.1 per cent. That builds on the pre-Covid-19 2020-21 settlement, which provided an increase of 5.8 per cent for local day-to-day services. A further £650.4 million of non-Covid-19 funding will be provided outwith the local government settlement in 2021-22, which means that Scotland’s local government will receive more than £12.3 billion.

Alex Rowley (Mid Scotland and Fife) (Lab)

Does the cabinet secretary accept that Covid has brought with it even greater pressures on local authority services, and that those pressures are continuing to increase? Has she taken that into account in looking at the budget?

Aileen Campbell

My colleague, the Cabinet Secretary for Finance, Kate Forbes, engages thoroughly and regularly with local government to take account of the pressures on councils. That is why we have responded in the way that we have done, by ensuring that we can route money and support to local government in response to the Covid-19 pandemic.

I will set out a number of other ways in which we have endeavoured to provide some further flexibility. The settlement not only gives local authorities the resources and flexibility to respond to the new challenges that the pandemic has created, but provides a continued fiscal certainty that does not exist in England, through our policy of guaranteeing the combined general revenue grant plus non-domestic rates revenues. We are the only devolved Government to have committed to extend Covid-19 business rates reliefs into 2021-22, replacing £719 million of non-domestic rates income with additional revenue grant of the same amount to effectively underwrite that critically important revenue stream for councils.

We have jointly agreed a lost income stream with councils, and, taken together with the additional fiscal flexibilities that were announced on 8 October, the total value of the Covid-19 support package for councils is up to almost £1.8 billion in this year and next. While Scottish local authorities have enjoyed a cash-terms revenue budget increase of 3.6 per cent in the period from 2013 to 2020, English local authority counterparts have, by contrast, faced a cash-terms revenue budget reduction of 14.7 per cent in the same period. The Tories have a brass neck, therefore, to come to the chamber arguing for one thing while their counterparts and colleagues in London are doing quite another. However, they have form on that—they turn a blind eye to poverty while local and national Government here have to mitigate and mop up the mess of the austerity that the Tories pursue with political rigour.

It is a pity, therefore, that the Tories do not pursue with the same rigour the flexibilities, and the fiscal framework review, for which this Government has asked the UK Government many times, in order to ensure that we can put in place the correct and adequate response to what we are going through now with Covid and beyond.

The Scottish Government will continue in our shared endeavour with local government to work hard for the communities of Scotland. We will continue to treat local government fairly and to empower councils as best we can. We will continue to reject the negative narrative from the Tories, who do one thing here and quite another in London, and we will continue to proceed on a path of fairness and equality for all.

I move amendment S5M-24206.3, to leave out from “will automatically” to end and insert:

“is developed in partnership with local government and that reflects the ambition of the Local Governance Review to devolve more power to a more local level.”


Sarah Boyack (Lothian) (Lab)

I draw members’ attention to my entry in the register of members’ interests and my former employment with the Scottish Federation of Housing Associations.

In this debate, we need to acknowledge the importance of local government, its capacity to serve communities and its need for fair funding. Our councillors are the democratically elected officials who are closest to their communities, and they provide support to the most vulnerable in our communities, whether it is about access to mental health support in our schools; support for adults with learning disabilities and their parents to enable them to make the most of their skills and talents; or getting people from low-income communities into employment and training.

However, during the past decade, we have seen the impact of austerity on councils. Tory austerity from the UK Government has been not only passed on, but deepened by Scottish National Party budget cuts in Holyrood. Councils have consistently been asked to do more with less, and the blame for their underfunding is punted between the two Governments, but in the end it has been our communities that have suffered.

The Conservative motion calls for a clear “fiscal framework” for local government, and I agree with that. It is striking that, two decades into the running of our Parliament, a funding model that guarantees our councils income has yet to be agreed. However, I think that there is cross-party support for a fiscal framework, which could be agreed between the Scottish Government and local government—but that has just not happened. The centralisation of power via budget allocations hampers the ability of our councils to plan ahead and implement longer-term projects and services in their communities by forcing them to organise and think from budget to budget, year to year, rather than through forward planning.

The call for a set percentage in the Scottish Government budget to be guaranteed would be a step forward, as it would enable councils to plan ahead. That would have to be fair funding, however, and it would have to address the concerns that were raised by COSLA regarding recent budget allocations. It would also be critical for the UK Government to understand the failure of austerity and, as we come out of the pandemic, for it to commit not just to continuing the Barnett formula but to considering increased investment for Scotland.

We know that local government, in Scotland and in England, has struggled to cope financially with the demands of the pandemic, and we need not just fair funding but more autonomy for our councils. Last summer, the micromanagement of consequentials cut right across the principles that the Scottish Government is arguing for in its amendment.

The problem with the SNP Government’s amendment is that, while it is easy to agree with it—I do not disagree with it—it does not take us forward. We are waiting for action. In 2019, the SNP Government promised the Greens that it would make a three-year settlement for councils from the 2020-21 budget. There was also agreement that we would have cross-party talks to replace the council tax by the end of this parliamentary session, and that there would be proposals for that.

For me, the SNP amendment feels like a holding response: the issue will be dealt with at some point, but we are still waiting. The warm words from the cabinet secretary do not take away the fact that we have had more than a decade of underfunding, with £937 million of cuts to non-core funding for our councils.

My amendment calls for

“an increase in capital spend, and notes that this must be a priority”

for all of us,

“as it is fundamental to building back ... services, supporting communities and protecting jobs.”

For example, we need more affordable housing, as we discussed this morning in the Local Government and Communities Committee. More deaths are linked to homelessness in Scotland than anywhere else in the UK, and thousands of new homes would create thousands of new jobs—it would give people employment opportunities. We also need investment in our parks and outdoor learning opportunities, so that our young people can build new skills and so that those skills are not limited to those who can afford them. Furthermore, we urgently need investment in new schools.

Yesterday, we had a really good debate on heat networks, which represent an excellent opportunity to bring good local jobs to our communities, giving councils a stake in local energy and heat production and supporting communities with clean, cheap heat and energy. We need to retrofit housing to meet energy standards, not just meeting our climate targets but finally ridding Scotland of fuel poverty. However, our councils cannot do that without the financial flexibility that they should have at their control and without the capital investment that they need to make progress.

We know that we are facing a climate emergency and—some would say, post-Covid—the biggest recession in 300 years. Investment in low-carbon infrastructure by our councils could be transformational, and it is crucial. We need an end to centralising behaviour, which hamstrings local government and results in a loss of services at local level. Our recovery from Covid cannot happen without local action and investment. I am sure that, when we talk to our local authority colleagues, we find that they are all up for community wealth building but they need certainty and funding. Local government needs fair funding, the capacity to plan ahead and more financial autonomy.

I hope that we can agree to our Labour amendment, because it highlights the important role of capital expenditure, which has dropped in recent years from 27 to 12 per cent. That is a real-terms cut for the future, and our communities deserve better.

I move amendment 24206.2, to insert at end:

“; further believes that the Scottish Government’s historic underfunding of local government funding means that there must be an increase in capital spend, and notes that this must be a priority as it is fundamental to building back better services, supporting communities and protecting jobs.”


Willie Rennie (North East Fife) (LD)

During the pandemic, local communities have come to help people who need support. We have relied on councils to get schools and pupils geared up to learn and to get them their school meals. They have very quickly got money to businesses in need.

Of course, the idea of a fair deal for local government is a good one, and the idea that we should know that local government will be treated fairly is a good one, too, but local government has been on the rough end of the SNP Government’s priorities. We get the usual conjurer’s trick from ministers, who send ring-fenced parcels of money to local councils for new tasks, and claim that it is money for old tasks. The money goes up, but the costs of the new responsibilities go even higher, which leaves councils to cut other services. That is just not fair.

Why can the SNP not leave local taxes to local councils? There have been 10 years of interfering with and freezing council tax, followed by more years of capping it, because—apparently—the SNP knows best. It has been that way for years, so we are sceptical of the Government’s claims that it has new plans for local government. We have had 14 years of this Government, and it has not got it right for local government over that time.

The Conservatives have not got it right today, either. We all remember that, in the past, when the UK Government has allocated Barnett consequentials for health, the Scottish Conservatives have wanted it to be guaranteed for health. Well, not any more. In 2018, the then Prime Minister, Theresa May, said that she would increase national health service funding, which would mean £2 billion of consequentials for the Scottish Government by 2023. Back then, the Secretary of State for Scotland, David Mundell, said:

“I urge the Scottish government to invest this extra money in improving health services”.

With today’s motion, that is now all completely out of the window. Under the Conservatives’ plan, between 2018 and 2023, more than £600 million would be automatically removed from the NHS Scotland annual budget. People in Scotland expect their Parliament to judge the different needs, and not just delete £600 million of health spending because the Conservative computer told them to do exactly that. Such a crude formula is something that local government simply does not need.

The Conservative motion would cut NHS funding using a crude formula, and we should not support it. We need a fair funding settlement that involves local government in its creation and creates the transparency and fairness that we want. That would allow us to deal with difficult problems, such as integrating health and social care, without being saddled with an inflexible funding system.

Just as Holyrood does, I want councils to be able to raise the majority of the money that they spend. If they control the purse strings, they are free to determine their own future in partnership with the communities that they serve. If the councils or the voters do not like the decisions on tax and spend, they can vote them out. We need a framework that nurtures such a relationship, and that is why we cannot support the Conservatives today.


Patrick Harvie (Glasgow) (Green)

For every problem that is complex and difficult, there is a solution that is simple, easy and wrong. That is what the Conservatives have to offer today.

The topic is an important one, because the system of local government finance that we have in this country is fundamentally broken. Every year since the SNP lost its majority, the Greens have made the issue a priority. The impact of additional resources that we have made available to local government has changed the context of that historical underfunding to which Sarah Boyack’s amendment refers. Overwhelmingly, the damage was done in the previous session of Parliament. In every year since 2016, the Green impact has made a real difference, and has been welcomed repeatedly by COSLA.

The Greens were the first to propose a fiscal framework. Back in 2017, we published proposals on the framework and we eventually gained support to begin the task of developing it. However, that is one of many areas of work that have been delayed due to Covid.

The Conservative proposal today simply does not engage with reality. The reality is that a fiscal framework for local government cannot just be imposed; it needs to be carefully developed with local government. It needs to provide transparency, predictability, sustainability and autonomy for local government over its finances. The reality is that the simplistic idea of providing for a fixed percentage of the Scottish budget would utterly disregard the changing needs and priorities from year to year.

Annie Wells is flatly wrong to claim that her proposal mirrors the UK-Scotland fiscal framework. I do not believe for a moment that the Conservatives would support a UK-Scotland fiscal framework that was based on the idea of a fixed percentage of the total UK budget, and such a simplistic idea would be no more workable in a fiscal framework for local government. The reality is that, in order to work, it would need to give local government the fiscal autonomy that is normal in many other European countries.

The reality is also that Green efforts to deliver new fiscal powers to local government have met with consistent opposition from the Conservatives. Reform of local government finance can happen only if we work together to achieve political consensus across the political parties. We do not have the same starting points, but if we all just dig in our heels and defend our starting points, there will be no progress. Such progress is long overdue. The reality, I am sorry to say, is that the Conservatives are the only party in the Parliament that has consistently refused to engage with the opportunities for cross-party dialogue that could result in progress. With that track record, it is clear that their motion is not a serious effort to achieve change.

We will support both amendments today. The Government amendment deletes that simplistic model of a fixed percentage, while the Labour amendment recognises both the historical context and some of the priorities that need to be addressed for the future. We will vote for both amendments and for the amended motion.

The Presiding Officer

We come to the open debate. I remind members that we are a bit tight on time, so they should keep their remarks to four minutes.


Edward Mountain (Highlands and Islands) (Con)

For local democracy to be effective, local councils require fairer funding and to be trusted. That should be a statement of the obvious, of course, but it is certainly not a statement that the SNP Government holds to.

We have already seen from this year’s draft budget that local councils will receive an uplift of less than 1 per cent, whereas the SNP Government’s budget has gone up by 9 per cent. Such a funding gap speaks volumes about SNP members’ priorities—they are not the champions of localism that Scotland so desperately needs and that they pretend to be. [Interruption.] No, I will not give way. I have four minutes.

The SNP will again—[Interruption.] I am sorry; if the member wants to make lots of noise from the back benches and interrupt me, that is fine, but they should do it when they are standing up, not when they are sitting down.

The SNP will continue—[Interruption.]

The Presiding Officer

Mr Mountain, you may continue. I ask members please to keep order.

Edward Mountain

Thank you, Presiding Officer.

The SNP will continue to make headline announcements about increased funding to local councils, but the devil is always in the detail. Most of the additional funding is for the SNP’s own pet projects, not for the day-to-day core services that local communities rely on, such as roads, schools and social care. Those are the areas that suffer so drastically from underfunding. The truth is that, over fourteen years, the SNP has reduced local council funding as a percentage of Government spending. Scotland’s councils now face a budget shortfall of more than £0.5 billion.

That has serious consequences at a local level. For Highland Council to protect core services, it has told me that it would need an increase of between 3 and 4 per cent at least on its council tax—and that is just to achieve a standstill. Frankly, it is unacceptable that Highland Council should have to consider raising taxes during a pandemic. Businesses are struggling to survive and family budgets are being stretched like never before; I do not believe that now is the time to raise local taxes.

It is time, really, for the SNP to give councils a fairer funding deal. If it does not, we will continue to see Highland roads such as the A890 fall into disrepair. There is no ferry at Stromeferry—frankly, the Scottish Government could not deliver that—and no bypass either. Until funding is made available for that project, local communities will have no choice but to accept continued disruption from rockfalls from the crumbling cliffs. The SNP Government talks about improving connectivity, but it is failing in Stromeferry.

Years of underfunding have left our Highland schools in a disgraceful state. The Highlands and Moray have the highest proportion of schools in Scotland that are classed as being in poor condition. I visited Tain royal academy and was shocked at how bad the water leaks were. In the library, there were more buckets than there were books. That is not the environment in which our pupils should be learning; they deserve modern school buildings. I welcome and recognise the funding to build new schools in Tain and in Nairn, which is supported by the Scottish Government, but more schools in the Highlands need repair or a full rebuild.

The SNP’s underfunding of local councils has helped to run down our roads, schools and local services. There is a better way forward. The Scottish Conservatives would create a fairer financial settlement that would ring fence a percentage of the Government’s budget for local councils. The proposal will protect local services and is worth voting for today and in May.


James Dornan (Glasgow Cathcart) (SNP)

It is good to see Annie Wells back at work, and I hope that she is feeling better. It is just a shame that she was landed with this desperate motion on her return.

It is clear that an election is due. I was a bit surprised that Willie Rennie made the case for independence in his speech.

Ensuring a fair funding settlement for local government is one of the key tasks of any Government’s budget. Council services impact on family life daily, whether we are talking about children’s education, roads and parks maintenance, waste collection or social services. I welcome the SNP Government’s move to guarantee £11.6 billion for local government in its budget, to enable local authorities to invest in priority areas and implement national and game-changing policies such as the expansion of free early learning and childcare.

As part of the budget, my local authority, Glasgow City Council, is set to receive more than £1.36 billion, which is a welcome increase on last year’s funding package.

It is essential that Governments—local and national—are given the flexibility to respond to situations, whether they are anticipated or not. As we have seen in the pandemic, it is ridiculous that the Scottish Government has not had the appropriate fiscal levers to enable it to respond to the challenges. Unlike other countries around the world, Scotland has been unable to borrow, which has denied the maximum support to the people of Scotland. That is not for the want of trying, though: the Cabinet Secretary for Finance has repeatedly made clear what fiscal tools we require, but the Tory Government has repeatedly refused to listen and give us the powers that we need.

I appreciate that local authorities, too, need flexibility. I am pleased that, in partnership with the Convention of Scottish Local Authorities, local authorities have recently gained substantial financial flexibility and greater power to make informed decisions about spending at local level.

The Tories brought the motion for debate today, so I hope that they ask the Chief Secretary to the Treasury to allow the use of capital budgets to deliver additionality to councils for resource spending. That would allow councils to manage their budgets better in these challenging times.

I welcome the local governance review with COSLA that will bring the opportunity to recalibrate how powers and resources are shared between local government, national Government and communities. Throughout the pandemic, we have seen the importance of collaboration between spheres of Government when it comes to keeping people safe and supported, and I hope that the approach can be built on when we are out of the public health crisis. In the meantime, local government deserves as much clarity and support as possible.

The Tories are neglecting to mention three key points. First, in 2019, the UK Government’s budget was delayed from November of that year until March 2020, and then the 2020 UK budget was delayed until autumn and still has not taken place. If the Tories want to secure greater stability and clarity for our councils, perhaps they could ask their Westminster bosses to provide the Scottish Government with greater stability and clarity on funding.

Secondly, the biggest threat to the local government funding settlement has been the Tories themselves. Despite a decade of cruel Tory austerity, the Scottish Government has ensured that local government has been treated fairly.

Thirdly, we are still not sure how much the Tories would be willing to cut from national health service spending. After all, money does not grow on trees, and most of our money is spent, quite rightly, on the NHS.

Many of my constituents in Glasgow Cathcart, like people across the world, have faced severe financial challenges as a result of the public health crisis. I am grateful that the Scottish Government is funding a national council tax freeze, which is backed by almost £10 million for Glasgow City Council alone. In the face of Tory austerity, the SNP Government has invested in and protected local authority funding, enabling continued investment in schools and other crucial council services, while protecting people’s livelihoods.

I have been a councillor, so I know that local government has had and continues to have its challenges. However, it is absolutely apparent—and not just from this debate—that the only party trusted to ensure fair funding for local councils will, once again, be the SNP.


Elaine Smith (Central Scotland) (Lab)

I have a registered interest related to funding provided by Unison for my member’s bill, the Breastfeeding etc (Scotland) Bill.

I am pleased to be speaking in the debate, in one of the last contributions that I will make in the chamber after serving as an MSP for 22 years.

I have a particular interest in local government. More than 30 years ago, I was a homelessness officer in a district council, where I saw at first hand the devastation that homelessness causes. One of my best times in the Parliament was when, in 2003, a Labour-led Scottish Executive introduced homelessness legislation that was widely regarded as the most progressive in Europe.

Decades later, after 14 years of SNP Government, we see the grim scenes of massive queues of homeless people waiting on food from a charity soup kitchen in a snow-covered George Square in Glasgow. I was helping at a George Square soup kitchen when I was 14 years old. It is shocking that such poverty and homelessness still exist. Having access to food and a home should be a right for all citizens in 21st century Scotland.

As a council officer, I also worked with a grants scheme, which demonstrated what people could do in their communities with funding help from the council. Now, year-on-year SNP cuts to council funding have meant cuts to community groups that do vital work connecting people, tackling exclusion and providing activities for young people, among other things.

In the 1990s, as the branch secretary for Unison at Highland Regional Council, I fought continually against Tory cuts to local government budgets. The Tories have short memories. However, now we are seeing SNP cuts implemented year on year, despite its claim to be a party of social justice. The Scottish Parliament information centre reported that, pre-Covid, the local government revenue settlement as a proportion of the Scottish Government revenue budget had decreased by 2.6 per cent between 2013-14 and 2019-20. [Interruption.] I really do not have time. If I have time at the end, I will give way to the member.

Now we have COSLA saying that the past year has been like no other and the forthcoming budget

“does nothing to represent fair funding for councils”.

That is even more shocking during the pandemic, because local government has been playing a crucial role in trying to maintain critical public services, administering key grant funding to businesses and managing vital aspects of much-needed welfare support. Overall, as Sarah Boyack said, local government has not received its fair share of funding and it has had cuts imposed well beyond those received by the Scottish Government from the Tory grant allocation. That deliberate choice made by the SNP Government has a direct impact on the poorer in society and an even worse impact on our more deprived areas.

Basically, due to the funding pressures, local authorities are taking difficult budget decisions on, for example, libraries, swimming pools and lunch clubs, and on the reduction in public park maintenance. Those are services on which people on low incomes, particularly women, depend. Space to study; parks to walk and play in; and community centres to provide a focus—those are all facilities long fought for and highly valued.

As we adopt progressive policies such as Monica Lennon’s Period Products (Free Provision) (Scotland) Act 2021 and recognise the needs of women and girls, surely we should also be asking where the strategy is to make that a reality. Within the Covid restrictions, outdoor activities are being encouraged but they are not being supported in a practical way. In that regard, we need accessible, staffed and well-maintained public toilet facilities.

Covid restrictions have undoubtedly brought the lack of local services and public provision into sharp focus. For those who depend on and use the wi-fi and computers that are provided on council premises, their closure has meant that access to essential services has been denied for too many.

It should also be remembered that local authorities provide employment and income for many people who then put money back into local economies. Council workers should be fairly paid.

I know from the experience of both working in local government and representing constituents for more than 20 years, that perpetuating inequality is not inevitable. Provision of well-staffed and well-resourced public services to meet local need is essential to address the inequalities in our society. We desperately need policies that reverse the growing inequality, a Scottish Government that values local delivery and decentralisation, and funding decisions that give councils the investment that they desperately need.


Sandra White (Glasgow Kelvin) (SNP)

I thank Annie Wells for bringing the debate to the chamber. Like Patrick Harvie, I believe that the motion on fair funding for local government is very important, and I wish that our debating time could be longer.

I agree with Willie Rennie’s points on subsidiarity and having more locality in local government. Having been a councillor many years ago, in an earlier life, I can say that it is a great job. As other members have mentioned, it brings you close to people, you get to know exactly what is wanted on the ground and often you are able to carry that out. The debate gives me the opportunity to thank all those who work in local government. They have done a fantastic job, particularly throughout the pandemic. I would like to show my appreciation by thanking them in the debate.

Annie Wells mentioned local government finance, but perhaps she and the Tories should be reminded that, through giving contracts to their cronies—those are not my words but those of the High Court—they have wasted billions of pounds. That is money from taxpayers throughout the UK, including Scotland. The court has said that the Tories have acted unlawfully, so I will take no lessons from them.

Another aspect that I think will have a massive impact on local government and our communities is that, as we are no longer in the European Union, we cannot access the share of European funding that formerly went to local authorities and which was very much appreciated. We now have funding from Westminster, which is called the UK shared prosperity fund. It has been said that that will be a UK project, so rather than subsidiarity and the funding going to local authorities, it will come from Westminster. Perhaps we should also be debating that issue.

Turning to the motion that we are debating, we all recognise that the past 11 months or so has been like no other time. Not only Scotland and the UK but the whole world has had to face the pandemic, whose impact on the Scottish economy has been palpable. I believe that the Scottish Government has responded across all areas, especially with the substantial funding package for councils that it has introduced. At the beginning of this month it announced its draft budget proposals which, if the budget passes, will provide increases across all Scottish council budgets. Local authorities across Scotland are set to receive £11.6 billion, with £259 million having been added in one-off funding support for on-going Covid-19 pressures on local services. It has not been mentioned in the debate so far but, in addition, £90 million has been set aside to scrap rises in council tax and compensate local authorities that had planned to increase charges by up to 3 per cent—so allowing hard-pressed householders to keep more of their money to spend on other essentials.

It is important to note that, right now, under UK Government rules, Scotland cannot borrow money to respond to the pandemic, so we need the powers and fiscal flexibilities that are necessary to maintain and expand the tax base, raise devolved tax revenues and support the delivery of a green recovery. As the cabinet secretary has said previously, we are working with one hand tied behind our backs because of the lack of real control over our finances. If we were independent, we would have the same power to borrow as every other country across the globe and we could remain part of the European Union and, as I have mentioned, have access to the €750 billion recovery fund. However, because of Brexit, which we, in Scotland, did not vote for, we are now denied access to those vital funds.

The Scottish Government is—

The Presiding Officer

Ms White, I think that it is time to conclude.

Sandra White

I will do so, Presiding Officer.

I welcome the fact that the Scottish Government is working with COSLA and the local governance review.

The Presiding Officer

We move to closing speeches.


Iain Gray (East Lothian) (Lab)

Fair funding for local government has been something that Scottish Labour has campaigned on throughout the entire term of the Parliament, so we welcome the debate today, short though it is, and the motion in Annie Wells’s name. Even before the economic impact of coronavirus became apparent, local authorities had seen as much as £900 million in real terms cut from non-ring-fenced revenue budgets since 2013 alone.

However, it is in these unprecedented times that we live in now that we have all seen at first hand how local government has been by far best placed to respond to the Covid-19 pandemic on the ground, stepping in to ensure that our most vulnerable people have been fed and cared for, and I would like to associate myself with Sandra White’s acknowledgment of the efforts of local government staff. Not only did they keep vital services going in these unprecedented circumstances, they stepped up to the plate, as Annie Wells said, to build resilience in their communities and they delivered the business support packages that the Scottish ministers announced with great fanfare. The very least that they deserve in return is a fair funding package so that they can chart their communities’ way out of this crisis in both the medium and long term with confidence that they will have the resources to do so.

Sarah Boyack was quite right when she said that councils have been drip fed micromanaged funding from the Scottish Government throughout the pandemic, so it is now vital that councils are fully funded for their loss of income during the crisis and that fair funding solutions are put in place in the longer term to ensure that they weather the continuing effects of the pandemic and can support their communities as levels of poverty and inequality continue to increase as a consequence of Covid.

Presiding Officer, as you know, I have been around long enough—long before blueprints for local government—to remember the then finance secretary’s “historic concordat” with local government. There was much talk then of mutual respect, parity of esteem and an end to ring fencing; jokey comparisons were made at the time with Neville Chamberlain and his famous piece of paper. Alas, the concordat has proved just as worthless over the years. Councils have been singled out, year on year, for cuts far greater than any faced by the Government. Ring fencing has not so much crept back as roared back—COSLA complains that 60 per cent of councils’ funding is now allocated before it even reaches them. That is not empowering councils; it is undermining them.

The cabinet secretary and some of her colleagues talked about the brass neck of the Tories in bringing the motion. Like Elaine Smith, I spent the 1980s and 1990s as an activist—in my case, in Lothian and Edinburgh—fighting against cuts as the then Tory Governments tried to eviscerate local government. This Parliament was meant to protect our local services from that but, for the past 14 years, it is the devolved SNP Government that has had councils on the rack. [Interruption.] I do not have time to take an intervention.

I gently say to SNP colleagues that, if they are aggrieved at a Tory motion telling them to treat local government fairly, they really should reflect on how it has come to that, 14 years on from the heady hubris of the historic concordat. Perhaps they need to reflect on the intervening years and perhaps they need to remind themselves and remind Patrick Harvie that that concordat con trick was part of an SNP and Tory partnership budget that went through the Parliament in the first place.

Councils have stepped up to the plate in the pandemic; it is time that Government showed them the respect that they deserve, as the motion and the Labour amendment do this evening.


The Minister for Trade, Innovation and Public Finance (Ivan McKee)

I welcome the opportunity to contribute to this important debate, which highlights the crucial role that local government plays in supporting our communities as we continue to deal with the current crisis and, more importantly, with how we can recover as quickly and efficiently as possible. I take the opportunity to thank all those who work in local government in these very difficult and challenging times for their tremendous efforts and for the support that they have given to their communities and others as we have worked through the pandemic.

The delay to the UK budget means that we do not know the total budget that will be available to Scotland next year. We do not yet have confirmation of Barnett consequentials that will flow from changes in UK departmental expenditure or the updated economic and tax forecasts that are needed to finalise the block grant adjustments that impact our Scottish budget.

In coming to our decision to announce the Scottish budget on 28 January, we listened carefully to the representations that COSLA made on behalf of local government about the damaging impact that any further delay would have on the delivery of public services and the practical challenges that it would pose for setting budgets and collecting council tax. Despite those obstacles, the Scottish Government remains firmly focused on achieving the objectives that we share with our local government partners to build a fairer, stronger and greener economy, all of which are firmly anchored in the jointly agreed national performance framework.

The Scottish Government’s commitment to pass on all health consequential funding from the UK Government has provided a degree of protection to our national health service. However, based on figures from SPICe that members will be familiar with, had local government’s share of the Scottish budget in 2013-14 been maintained through to 2020-21, as some have called for, that would have resulted in a cumulative reduction in the health budget of £2.3 billion. Had the same percentage been maintained in 2021-22, health would have lost almost a further £1 billion, which is clearly not realistic, given the current pandemic.

Frankly, in doing the maths for its proposal, the Tory party has not understood how percentages work, which is a point that has been well made by many other members, including Patrick Harvie. Over the period 2013-14 to 2021-22, health would have received a total of £3.3 billion less than it has been allocated. Of course, having a fixed percentage of the Scottish budget for local government could produce other anomalies. For example, on the basis of the proposal that has come from Annie Wells and the Tory party today, in 2014-15 and 2015-16 local government would have received around £500 million less than it did.

I want to focus on some of the tangible benefits that the Scottish Government has delivered for local government in Scotland. The 2020-21 pre-Covid local government finance settlement provided an increase in local government day-to-day spending of £589.4 million, or 5.8 per cent, compared with the previous year. For 2021-22, we have delivered a funding package for local government of £11.6 billion, providing an additional £335.6 million for vital day-to-day services, which is an increase of 3.1 per cent.

Including the additional £275 million that the Cabinet Secretary for Finance announced on 16 February and the £200 million for the lost income scheme, Scotland’s councils will receive £931 million in direct Covid support during 2020-21 through the local government finance settlement, with a further £259 million confirmed for 2021-22. Taken together with the additional fiscal flexibilities that were announced on 8 October, the total value of the Covid-19 support package for councils is £1.8 billion over this year and next.

In addition to those extra resources for councils, we continue to provide them with funding certainty through our non-domestic rates policies, including the enhanced retail, hospitality and leisure relief that the Cabinet Secretary for Finance confirmed on 16 February. The budget delivers an unprecedented reduction in the poundage and almost £1.5 billion-worth of reliefs. Those decisions will continue to protect businesses during Covid-19 and, unlike in England, the Scottish Government guarantees all non-domestic rates income for councils, which the Tories should reflect on when they come here and talk about local government funding.

We should compare and contrast that to how local government in England has fared under the UK Government. Over the period 2013 to 2020, Scottish local authorities enjoyed a cash-terms revenue budget increase of 3.6 per cent while English local authorities faced a cash-terms revenue budget reduction of 14.7 per cent.

Alongside the additional funding and certainty that have been provided through our non-domestic rates policies, as my colleague Aileen Campbell said, we are committed to developing a rules-based framework for local government funding, rather than imposing a blunt inflexible measure such as a fixed-percentage settlement. We will work in partnership with COSLA on that framework, which would be introduced in the next session of Parliament.

The Tories need to be honest about their plans, which would mean billions less for our NHS and arbitrary cuts to local budgets as and when the UK Government resorts to austerity. A fiscal framework for local government is a good idea, which is why we agreed to develop one last year, only for work on that to be delayed by the pandemic. However, any framework must be developed in partnership with local government and, crucially, must never put funding for the NHS at risk.

I assure all members that the Government has worked in partnership with local government, and will continue to do so, to ensure that the people of Scotland continue to receive the lifeline support and services that they expect and deserve as we move towards a healthier, greener and fairer society.


Alexander Stewart (Mid Scotland and Fife) (Con)

I am delighted to close for the Scottish Conservatives in this afternoon’s debate on fair funding for councils.

As someone who spent nearly two decades in local government, I am acutely aware of the challenges that councils face, particularly when it comes to funding. Scotland’s councils have been at the forefront of the response to the coronavirus pandemic, and many have continued to deliver their vital front-line services despite the restrictions that they have had to cope with and adapt to. I commend and congratulate all staff who have stepped up to the plate and taken on those roles. In addition, many staff have been redeployed and have taken on specific roles to ensure that individuals who are shielding or self-isolating have been supported.

However, that has all come at a cost. While demand for many services has increased, revenue streams have dried up: council tax collection rates have gone down; parking charges have been scrapped; anticipated rises in fees have had to be put on hold; and income from fees in planning and licensing has fallen sharply. As a result, councils across Scotland face a combined shortfall of £511 million as they go into 2021-22. One would think that the Scottish Government might take note of that, but even after the allocation of additional top-up funding, the local government budget is nearly £400 million less. As we have heard, the Scottish Government’s budget has increased by more than 9 per cent, but the budget of Scottish councils has increased by only 0.9 per cent. [Interruption.] No—time is tight, and I want to continue.

There is simply no excuse for the SNP’s chronic underfunding of local government, but it should come as no surprise to any of us, given the SNP’s track record when it comes to dealing with local government funding. Last year, it failed to support councils as quickly as the UK Government did. Councils waited weeks to receive extra funding that was due to them. The SNP has severely underfunded councils for years. Between 2007 and 2020, the SNP Government’s spending on local government fell from 35.9 per cent to 31.1 per cent of the budget.

At the same time as their funding has fallen, councils have taken on extra responsibilities and the number of ring-fenced budgets has increased. That means that councils’ discretionary budgets have fallen even more dramatically. The SNP might talk about bringing government closer to the people, but the fact is that power is being hoarded here in this Parliament in Edinburgh. Discretionary funding covers activities such as road maintenance, garden waste collection and instrumental tuition for pupils and young people, which are vital services. The SNP has failed councils for so long, and it is about time that it gave them fair funding to ensure that such activities can take place.

Our proposal to the Scottish Parliament is a very simple one. [Interruption.] I will continue. The budget from the UK Government has increased while the grants to local councils have stayed the same or have gone down. We want local government to be entitled to a fixed proportion of the Scottish budget each year. The creation of a Barnett-type formula for local government would ensure that there would not be uncertainty from year to year. As well as allowing us to make councils much more effective and efficient, it would give them the opportunity to support others, and would give them the space and the resources to invest in the future. That is what we want to see—investment in the future.

My colleague Annie Wells talked about the crisis in local government. COSLA has highlighted its concerns about the financial shortfall. Councils are cash strapped.

In her contribution, Sarah Boyack acknowledged the good work that councils have done with one hand tied behind their back. We talk about fair funding and the fiscal framework, but the reality is that investment has gone down and people are having to deal with issues. We heard warm words from the cabinet secretary about how councils are tackling things, but what she said is not the case. Councils have had to deal with problems year on year.

Edward Mountain talked about the trust that councils need so that they can support roads, schools and social care.

In conclusion, the SNP has treated local government with complete contempt for the past 14 years. It has raided the budgets of local government to pay for its vanity projects, which have undermined local democracy. As a party of localism, we, the Scottish Conservatives, have a clear vision. Change is needed to ensure fair funding for our councils. Our proposals, enshrined in the Barnett formula, would ensure that change happens and that we give strong, clear and sensible opportunities for local government to develop.

I am very happy to commend the motion to the Parliament this afternoon, and I encourage members to support it.