Tough years ahead for Scottish councils – Accounts Commission

Local government will face financial pressures “of a scale not previously experienced” in the coming years, according to Scotland’s public spending watchdog.

Releasing its annual overview report, the Accounts Commission said many councils are now reporting funding gaps which cannot be closed by reducing the workforce alone.

The report added that councils need to have “effective” long-term financial plans to give them a good understanding of their finances and the future pressures - and provide options for addressing them.

The challenge for councillors is to make best use of the money that is available

Douglas Sinclair, chairman of the Accounts Commission, said: "Councils have coped well so far. But they will face pressures beyond next year of a scale not previously experienced, as budgets become even tighter and demands on services continue to increase.

"The challenge for councillors is to make best use of the money that is available and to take difficult decisions now to avoid storing up problems for the future.

"Regular reviews of governance are essential due to continuing changes in council staff, management and political structures and delivery models, such as the use of arm's-length external organisations and the new health and social care partnerships"

According to the report, in the context of overall reductions in public sector budgets, council funding has decreased.

In 2013/14, the Scottish Government allocated £10.3bn to councils - 8.5 per cent lower in real terms (allowing for inflation) than in 2010/11.

At the same time, demand for council services is rising, mainly because Scots are living longer.

The report added that councils need to ensure governance and scrutiny arrangements keep pace with changes in their structures and the way they deliver services, including the integration of health and social care services.

The Convention of Scottish Local Authorities’ (COSLA) finance spokesman Kevin Keenan said: “Scotland’s councils should be applauded by communities for the job they have done in protecting them because despite the financial difficulties and extreme budgetary pressures local government feels year on year, Scotland’s councils, based on their individual need and local priority, have done their utmost to protect frontline services and ensure to the best of their ability that the service user does not suffer. 

“As the report points out it is also fair to say that this is going to get even tougher in the next few years and just like in previous years really, really difficult decisions will need to be taken by Scotland’s councils.

“That is why councils need to be far more empowered in relation to the resources that they have at their disposal. 

“They need to be freed up to raise more of their own finances as it is local politicians who are held accountable for the success or failure in relation to the achievement of local aspirations.”