The year in local government: the struggle for power
If Prime Minister Boris Johnson’s first trip to Scotland is anything to go by, councils could benefit from the power struggle between the UK and Scottish governments over devolution, as the UK Government has indicated its intention of making more direct investment north of the border.
This was apparent on the new PM’s first trip visit here, where he tried to draw attention away from negative no-deal Brexit headlines with announcements for growth deals in Argyll and Bute, Falkirk, the Scottish islands and Moray, backed by UK Government funding totalling £300m, including the £32.5m already announced for Moray, while committing to growth deals for every region of Scotland, Wales and Northern Ireland.
This followed the signing of the £400m Borderlands Growth Deal at the beginning of July, with around £150m of the money to be spent in the Scottish Borders and Dumfries and Galloway.
Plans for the region include a feasibility study on extending the Borders Railway to Carlisle, creating the first gigabit city region and the first zero-carbon city region, better transport connectivity, skills development and promoting tourism.
But while funding for major infrastructure and economic development seemed positive, the state of councils’ revenue budgets continued to be bad news.
An Accounts Commission report in November 2018 reported that councils had been using savings and reserves to fill a four per cent funding gap and another report in March 2019 said “fundamental change” was needed to meet the growing gap between demand and resources.
The initial figure for the proposed budget in December saw a £198m overall increase in the revenue budget and £207m in the capital budget, but included in that were ringfenced amounts to cover Scottish Government policy commitments to be delivered by councils, such as an increase in free childcare hours and the extension of free personal care to under-65s, which COSLA calculated would leave councils with £192m less for services they already delivered.
This cut was confirmed by figures from SPICe, which calculated that councils were getting a real-terms cut of £319m to their revenue budget. COSLA’s resources spokesperson, Councillor Gail Macgregor, expressed “disappointment” at the offer.
An eleventh-hour deal with the Greens saw an extra £90m added to the block grant, as well as allowing local authorities to raise council tax by 4.79 per cent instead of three per cent, while the Scottish Government was also pushed into agreeing to a consultation on giving councils the powers to introduce a tourist tax and to adding powers for councils to introduce a workplace parking levy to the Transport Bill – something which caused widespread hysteria.
Finance Secretary Derek Mackay also committed to new cross-party talks on developing a replacement for the council tax, although any agreed change would not be introduced until after the 2021 Scottish Parliament election.
Power struggles were evident too, elsewhere, with local authorities increasingly pushing the message that they are not subsidiary to the Scottish Government – or its delivery arm.
A key theme of COSLA’s annual conference in autumn 2018 – pointedly called ‘Our Agenda’ – was of councils as a distinct sphere of government.
In her conference address, COSLA president Alison Evison said: “We cannot allow people to accuse us of allowing others to set the agenda for us. We cannot allow people to say that our agenda is about the interests of other spheres of government. I, along with every single elected member in this room, stood for election in the first place to put communities first.
“I am not prepared to put other organisations or sectors before local government. Alongside us as partners, yes. As our superiors, no. We are elected representatives in the governance of the country.”
This struggle between councils and the Scottish Government was particularly evident around new revenue-raising powers and powers over the short-term lets market that some councils want to see.
After the City of Edinburgh Council ran a consultation on introducing a tourist tax, a proposal which saw widespread support, including from 70 per cent of businesses, the Scottish Government announced it would run its own “objective” consultation.
And an amendment to the Planning Bill by Green MSP Andy Wightman, that would have made short-term lets subject to planning approval, was voted down, although the Scottish Government subsequently launched a consultation on alternative regulation of short-term lets.
Two major new bills this year will have implications for councils. The Transport Bill, currently at stage three, is expected to bring in low emission zones for Scotland’s cities, as well as allowing councils to take ownership of bus companies and set a workplace parking levy, while the Planning Bill was passed in June with support from Conservatives against opposition from Labour, Greens and Lib Dems, after a mammoth three-day debate with over 230 amendments.
Changes brought in by the bill include local place plans that planning authorities will be legally required to take into account and a duty for councils to work together on ‘regional spatial strategies’, with the aim being to make development easier and more sustainable.
Planning minister Kevin Stewart said the bill would give local authorities more powers and “put sustainable development at the heart of the system”, but opposition parties criticised it as a lost opportunity after amendments to give communities the right to appeal against planning decisions, as well as for land value capture and regulation of short-term lets through the planning system, were voted down.
Meanwhile, the effects of austerity and the introduction of Universal Credit are still being felt, putting additional pressure on councils, with them having seen an 11 per cent increase in applications for crisis grants and a four per cent increase in the number of children living in temporary accommodation, as well as a 1.3 per cent rise in the number of homelessness applications.
Funding challenges will be particularly acute for Glasgow City Council after a long-running equal pay dispute with a group of around 14,000 mainly female workers was finally settled in January, which will see the council pay around £500m in compensation.
Glasgow City Council leader Susan Aitken said she was “proud to be able to recommend a settlement to right this historic injustice”, but the council is having to sell off property to fund the settlement and further payments will need to be made as a job evaluation process still has to be carried out to replace the current pay scheme.
And while budget challenges still exist, particularly with Brexit looming, more fundamental reform of local government looks further off. In a joint statement in May on the findings of the first stage of the Local Governance Review, Alison Evison and Local Government Secretary Aileen Campbell indicated that they would take time to consider the next steps.
Campbell said: “We want to see a step-change in democracy in Scotland where decisions on public services are made in communities – where they have the biggest impact. Options are open as to what services are devolved.
“However, throughout the process, people have told us there will be a lot of detail to work out if we are to get this right. As a result, we will not rush to introduce legislation in this parliament. We have an exciting opportunity to shape the future of democracy so local communities can really flourish.”