Greater clarity urged over local government financing as part of review

A Holyrood committee has stressed the need for “greater clarity” in the funding settlement for councils to avoid what has become an “annual disagreement” over spending.

The Scottish Government and local authority body Cosla have been repeatedly at odds in recent years over cash, with both sides disagreeing about the level of funding increases.

This year was no different, with the Scottish Government announcing in its initial draft budget an extra £550 million for councils, which Cosla claimed had dwindled to just £71 million after ring-fenced central government commitments were removed.

The Local Government, Housing and Planning Committee asked for Local Government Secretary Shona Robison to agree an approach on presenting funding settlements with councils as part of an ongoing review into council governance – which has been touted as creating a “new deal for local government”.

In a letter to the Cabinet Secretary, convener Ariane Burgess said: “Like you, the committee is also keen that greater clarity is brought to the local government funding settlement so we can move on from what has become an annual disagreement on figures between Cosla and the Scottish Government, for example on whether funding is ‘new’ or comes from previously announced initiatives or whether or not it is ‘ring-fenced’.

“In our view, it would greatly assist public understanding if the new deal was to include an agreed approach to the presentation of such funding to help reduce such misunderstanding.”

Ms Burgess went on to urge Ms Robison to complete the review “as a matter of urgency”.

“Given the importance of the new deal for local government and its accompanying fiscal framework, the committee recognises that it is more important to get it right than to meet an arbitrary deadline, but we are keen that this work progresses as a matter of urgency.”

Appearing before the committee in January, Ms Robison signalled her willingness to “turbo-charge the focus on the new deal” adding: “If a deal is going to stand the test of time, even if it takes a few more months to get right, that is probably the right call.”

A Scottish Government spokesperson said: “Local authorities play a crucial role and the Scottish Government is supportive of ensuring decision-making is as local as possible. That’s why we are to working with Cosla to agree a New Deal for Local Government in Scotland, aiming to balance greater flexibility over local financial arrangements with improved accountability for delivering outcomes.

“We are working in partnership with local government to seek to agree a fiscal framework and partnership agreement as part of that new deal and will respond to the Committee’s letter in due course.

“We remain committed to concluding the Local Governance Review with the Convention of Scottish Local Authorities to ensure communities have greater control and influence over decisions that affect them most.”