Confrontation looms over Scottish council budgets

http://www.bbc.co.uk/news/uk-scotland-scotland-politics-38689876

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A number of councils appear to be heading for a standoff with the Scottish government over budgets.

They say they are not in a position to accept or reject the government's funding offer for the year ahead by Friday's deadline.

The government argues it is making more money available for local services overall.

Councils are heavily dependent on the government for money but are being offered less to pay for ongoing commitments.

BBC Scotland understands that any council which does not actively reject the offer from the government will be deemed to have accepted it.

Scotland's largest council, Glasgow, has written to Mr Mackay to say it could neither accept or reject the offer at present.

Council leader Frank McAveety said in the letter: "At a time when we see the cost of living rising for many of our constituents, particularly for the poorest, I am dismayed that the Scottish government's solution is to pass on a real term revenue cut of £327m to councils when you yourself have received an equivalent increase.

"I would also like to put on record that we are not in denial about the current state of public finances at a national level, but it is simply unsustainable for local government to receive year on year cuts on such a disproportionate scale without there being serious implications for public services and jobs."

However, the government says new money is available through changes to council tax bands and potential increases in the tax.

The government also highlights new, ring-fenced funding - including £120m which will go to headteachers.

A Scottish government spokeswoman said: "We have received no rejections from councils. It is now for local authorities to finalise their budgets, including provision for each of the elements included in the package, at their Council Budget setting meetings which will take place over the coming weeks.

"The Scottish government has treated local government very fairly despite the cuts to the Scottish budget from the UK government.

"Taking next year's local government finance settlement plus the other sources of income available to councils through reforms to council tax and funding for Health and Social Care Integration, the overall increase in spending power to support local authority services amounts to £241m or 2.3%."

It is highly unlikely that any council will get a better funding offer than the one currently on the table - unless the national offer to councils were to change in order to help the government pass its budget in parliament. It is also possible they may get a worse one.

The following councils are known not to have written to the government to accept the offer: North Lanarkshire, South Lanarkshire, Inverclyde, North Ayrshire, Clackmannanshire, Renfrewshire and Highland.

Some others, including Moray, are expected to join the list.

Some highlighted the cut in the amount of money they expected to receive and noted that the Scottish government's budget had still to be passed by parliament.

As the SNP does not have a majority, it will need to win support from at least one other party or secure abstentions.

In a letter sent to Finance Secretary Derek Mackay, North Lanarkshire Council said: "North Lanarkshire Council reiterates its call - backed by a motion of the council in December - for a fair settlement for local government to protect the essential services provided to often the most vulnerable in society.

"After taking into account unavoidable cost increases in areas such as minimal pay awards, auto-enrolment, the apprenticeship levy and contract inflation, North Lanarkshire will have to make service cuts of £34.6m as a result of your offer."

A spokesperson for Highland Council said: "The leader has written to the cabinet secretary this week to advise him that the council's budget will be considered at the next full meeting of the council on 16 February. It will therefore not be possible to confirm the council's position in relation to the settlement until then."

North Ayrshire Council said it was not in a position to either accept or reject the finance secretary's settlement offer until full financial details were available.

In a letter to Mr Mackay, North Ayrshire Council leader Joe Cullinane said the council still needed to consider the full financial implications of the offer.

A spokesman for the council said: "Until the full facts and figures are available - and their potential subsequent impact - and until the council and parliament have exercised their democratic mandates to set their budgets, the council is unable to accept or reject the offer.

"As it stands, the offer made to North Ayrshire Council will mean a cut to our government grant of approximately £9.2m for 2017/18.

"The council leader, in his letter to Mr Mackay, has made it clear that it is unsustainable for local government to receive year-on-year cuts on this scale without serious implications for public services and jobs."

Expressed hostility

East Ayrshire Council - which has an SNP leader and Conservative deputy leader - has also indicated to BBC Scotland that it is not in a position to either reject or accept the offer today.

Some other councils which have accepted the offer expressed hostility to the deal.

East Dunbartonshire Council's leader Rhondda Geekie said councillors felt they had no alternative.

She said: "How could there be when the cabinet secretary's offer states for those authorities not agreeing the offer, a revised and inevitably less favourable offer will be made?"

Councils are likely to set their budgets for the year ahead over the next few weeks.

They will be able to raise council tax by up to 3%, ending a freeze which has lasted since the SNP came to power. So far only about a third have given any public indication that this is likely, while South Lanarkshire has said it intends to continue to freeze bills.

It seems unthinkable that councils will not eventually accept the deal on offer from the government, regardless of any reservations they may have.

Councils are under a legal obligation to produce balanced budgets and could not operate without government money.