Criticism of Scots budget 'double counting'

The Scottish government insists its budget will give councils extra spending power

Questions have been raised over the Scottish government's use of health funds to boost local services spending on its budget balance sheets.

The Scottish Parliament Information Centre and the Fraser of Allander Institute noted that social care funds were being used to show an increase in both the council and health budgets.

The Tories said this was a "double counting con" by the finance secretary.

The government said the budget would give councils extra spending power.

Meanwhile Scottish Labour claimed the budget had become a "total shambles" after revised funding allocations had to be sent out to councils.

A political row broke out over the draft budget as soon as it was announced by Derek Mackay, with opposition parties claiming council funds had been cut despite Mr Mackay claiming a £240m boost for local services.

The core grant for councils was reduced in the budget, but the government argued this was more than offset by funds for local services such as schools and health and social care partnerships, along with potential increases to council tax - although it is down to individual councils whether to raise taxes.

'Highly controversial'

A budget briefing by the impartial Scottish Parliament Information Centre (Spice) pointed out that £107m of social care funds cited by the government for local services were "already included in the health budget totals".

This means the same funds have been used to contribute to a growth in both the health budget and the local services budget.

The Fraser of Allander Institute, an economic think tank based at the Unviersity of Strathclyde, said this was "highly controversial".

They wrote: "The funding for this actually already appears in the health budget lines - indeed it is fundamental to the government's commitment to increase the health budget in real terms.

"But the government often double counts this as spending on local services. Clearly this isn't right, it either has to be one or the other.

"There can be some justification for the additional £107m being viewed - in part - as resource for local services as a large chunk will be used to support the living wage for social care workers in local authorities.

"But if this is the case, then the money should be deducted from the health budget line and thereby reduce the level of investment in that major manifesto commitment. You cannot have it both ways."

The Scottish Conservatives said the government had been "found out" over a "double accounting con".

Finance spokesman Murdo Fraser said Mr Mackay had "signed off on the kind of creative accountancy that would make Fred Goodwin blush".

He added: "NHS money has been double counted as cash for local councils. And the SNP has simply banked 3% council tax rises everywhere in Scotland, even though this is for local authorities to decide."

Scottish Labour meanwhile highlighted revisions to funding allocations sent out to councils over the weekend.

The party's deputy leader Alex Rowley said: "The SNP's budget has now become a total shambles. It's bad enough that SNP ministers are cutting £327m from local services, but to have to correct their own figures to individual councils within a few days is farcical."

A Scottish government spokesman said: "The 2017/18 draft budget local government finance settlement figures, taken together with the opportunity to raise additional council tax, provide a package of measures that confer additional spending power to support local government services of £241m or 2.3% based on the local government finance settlement presentation.

"In addition to their core grant, councils will receive their share of £120m for schools, £107m for social care and £111m in additional revenue from reform of council tax bands."