Budget ‘inevitably’ does not meet all the demands of councils – minister

Council leaders will have to make difficult decisions when setting their budgets, Scotland’s local government minister has warned as he told MSPs that “inevitably” Holyrood’s Budget will not be able to give them everything they want.

Joe FitzPatrick, the minister for local government empowerment, did however insist the cash being given to town hall chiefs to compensate them for freezing council tax in 2024-25 is “fair”.

The Scottish Government has offered to provide councils with £144 million to fund the freeze, on top of “record funding of over £13.9 billion” allocated for local government in the draft Budget, Mr FitzPatrick said.

Giving evidence to Holyrood’s Local Government Committee on Tuesday, he said: “We have invested record funding in local government, £14 billion for local authorities including the council tax freeze.

“If you compare budget to budget, as required, that represents an increase of £795 million, equivalent to a 6% cash terms increase, 4.3% in real terms.”

However Mr FitzPatrick said: “Following the UK Government’s autumn statement, inevitably the Budget wasn’t able to fully meet all of local government’s asks.”

The minister accepted councils “will have hoped for a more favourable settlement” from the Scottish Government.

He added: “There have been difficult decisions in this Budget for the Scottish Government and there will be difficult decisions for local authority leaders in setting their budgets as well.

“We all want to do the best for our communities with the limited resources we have.”

His comments came after Katie Hagmann, resources spokeswoman for local government body Cosla, spoke of its “disappointment” that the settlement “at this stage, doesn’t give us what we require to deliver the services fully that we want to”.

She told MSPs one authority had been looking to increase council tax by “up to 10%” in 2024-25, as she insisted a “cut” to councils’ core budget means the £144 million from the Government equates to a council tax rise of 2.8%, instead of the 5% ministers say the cash will fund.

Ms Hagmann said: “The £144 million has been framed as a 5% council tax increase. However if we go back to looking at the core budget, if we take into account the core budget and the drop in revenue on that one, it translates to approximately a 2.8% council tax increase.”

Referring to the differing figures being put forward by the Scottish Government and local authorities, she said: “We’re perhaps comparing apples to oranges, or perhaps apples to pizzas at this point. They are very, very different.”

Mr FitzPatrick insisted the £144 million “provides the money that would have been raised by a 5% increase”.

He went on to question whether local authorities would be able to increase the charges by as much as 10%, saying: “That might have almost been able to fly last year when inflation was running at the levels it was.

“But inflation is expected to be around 3%, so I think the 5% allocation is a fair allocation to fully fund the council tax freeze across Scotland.”

He said more than two million council tax payers will benefit from a freeze in 2024-25, “providing much-needed financial relief, particularly to vulnerable households”.

Mr FitzPatrick said he hopes all councils accept the cash and “therefore all council tax payers will benefit”.

Ms Hagmann said there is still “significant time to go through” in the budget process, saying she and other senior figures from Cosla are meeting Deputy First Minister Shona Robison on Thursday.

However she told the committee: “That being said I am realistic, I understand there isn’t endless amounts of money, and difficult and challenging decisions absolutely must be made.”