Scottish councils face tougher budget decisions - watchdog

Scotland's councils will need to take ever tougher decisions in the coming years to balance their budgets, according to the public spending watchdog.

The Accounts Commission said most of the extra Scottish government money that local authorities had been given was ringfenced for particular policies and pay.

Council body Cosla said a "real and meaningful" solution was needed to deal with a long-term issue of underfunding.

The Scottish government said it had made record funding available to local authorities this year.

The report comes as council unions await news on this year's pay offer.

The main council unions went on strike in 2022 and 2023 over pay and have warned of the risk of further action this year.

The unions expect this year's pay offer in the next few days but it is likely to fall well short of their aspirations.

The Accounts Commission report looks in detail at this year's council budgets.

Derek Yule, of the Accounts Commission, said it was getting harder for councils to do more with less.

"They have to find and then deliver significant levels of savings to address budget gaps," he said.

"Fully engaging with local people and being clear about the different and difficult budget choices is vital, whilst understanding the impacts on the most vulnerable.

“Councils need to improve the way in which they present financial information, and do this in a clear, consistent and accessible way."

The Accounts Commission has called on councils to increase the accessibility and transparency of publicly available budget information.

It says this will allow for improved comparison between councils, particularly around key information - including action to tackle existing and future budget gaps, and savings plans.

Council workers took part in strike action last year

The report also highlights the growing gap between how much councils need and the money available to them when they are setting their budget.

Councils attempt to bridge this gap through decisions on cuts, savings, changes to services or increased charges.

This year, putting up the council tax was not a realistic option as it would have led to the loss of some Scottish government funding - although both Argyll and Bute and Inverclyde orginially planned increases.

A third of councils said the money they received from the Scottish government did not fully fund the council tax freeze.

The report also highlights wider issues surrounding the funding of councils which are heavily dependent on Scottish government cash.

Councils received a 6% rise in revenue funding from the Scottish government this year, but the funding - worth £13.25bn - masked significant underlying challenges and strain.

The report also argues that the full impact of proposed savings this year by councils on service delivery and communities is unclear.

Cosla - which represents the shared interests of all 32 councils - called for a "real and meaningful solution" to what it described as the long-term issue of the underfunding of local government.

Its resources spokesperson, Councillor Katie Hagmann, said the Accounts Commission’s report "reinforces what we have been saying about council finances and the severe challenges Scotland’s councils face in trying to balance the books and deliver essential front-line services".

She said it was "vitally important" that action was taken because things had never been more challenging for councils.

Finance Secretary Shona Robison said the Scottish government would continue to work with Cosla to empower councils through a new fiscal framework.

"Despite UK government decisions leaving the country in a challenging financial situation, the Scottish government has made available record funding of over £14bn to local councils this year - a real-terms increase of 2.5% compared with the previous year," she added.