Report predicts more cuts to local government funding
The Fraser of Allander Institute has predicted a 4.6% real-terms cut to unprotected portfolios' resource budgets in 2018/19
Local government should expect further cuts to its funding over the next two years, according to a new report from independent economic researchers.
The Fraser of Allander Institute has predicted a 4.6% real-terms cut to unprotected portfolios' resource budgets in 2018/19 and a further cut of 3.6% in 2019/20.
In cash terms, this would see the local government settlement reduce by 2.6% in 2018/19 - about £250 million lower than in 2017/18.
A further cash-terms reduction of 1.8% is predicted for 2019/20.
The figures are contained in a report commissioned by the Scottish Local Government Partnership (SLGP), which represents Glasgow, Renfrewshire, Lanarkshire and Aberdeen councils.
An interim report published in December found local authorities have suffered more than £1 billion of cuts over the past five years and could face further reductions.
Its final report, which takes into account the 2017/18 budget settlement, provides a more detailed analysis of the future outlook for councils.
It states: “In the absence of any multi-year budget plans or spending-review documentation, we can only infer what the Scottish Government's plans might involve, based on its stated plans.
“In its 2016 manifesto, the SNP made three high-profile spending commitments with clearly set-out budgetary implications.
“These were: to increase NHS spending by £500 million more than inflation by 2021/22; to maintain police spending in real terms; and to expand the provision of free childcare, resulting in an additional £500 million spending on childcare by 2020/21.
“Assuming that these commitments continue to represent government policy, the implication for remaining 'unprotected' portfolios is likely to be substantial.”
The report continues: “Clearly it will be for the Scottish Government to decide how to allocate remaining resources across portfolios.
“But given that local government revenue funding accounts for just over half of the Scottish Government's unprotected portfolio spending, some degree of real-terms cut seems inevitable.”
It concludes: “Overall, the future funding outlook for local government remains uncertain. The Scottish Government has only set a one-year budget for 2017/18.
“The outlook for the Scottish Government's block grant from Westminster, together with the Scottish Government's stated spending commitments and tax plans, implies that local government should expect further real-terms falls in its budget over the next two years.”
SLGP convener Jenny Laing said a Holyrood inquiry was needed to review local government finance.
“This position is not sustainable and we need to force a reversal in policy by this SNP administration which keeps piling financial misery on to the people of Scotland year after year,” she said.
“I welcome this Fraser of Allander report which calls for an urgent debate around the issues we face as local authorities.”