SNP Highlands and Islands MSP Maree Todd has urged the Tories to end their “ideological obsession with austerity” after fellow list MSP Douglas Ross criticised a “simply unfair” settlement that has seen Shetland lose a greater proportion of funding than any other Scottish local authority.
An Audit Scotland report published on Tuesday showed that Shetland had lost 23 per cent of its funding over the past seven years – leaving it marginally ahead of the Western Isles as the worst affected of Scotland’s 32 councils.
SIC leader Gary Robinson said the report “confirms pretty much what I suspected”, but he accepted the deal had not deviated from a local government funding formula which had seen the council enjoy a considerable funding increase back in 2008.
While Shetland and the Western Isles are now losing more proportionally, councils such as Orkney and Aberdeenshire are receiving smaller reductions, and Robinson described that as “swings and roundabouts”.
While the funding formula is “far from an ideal system”, he said there was “a genuine reluctance among Scottish local authorities to meddle in it, because the only place that more money can come from is other councils, and there isn’t a council in Scotland that hasn’t been squeezed”.
Conservative MSP Ross pointed out that the SIC’s overall cut was 18 per cent greater than those faced by the least-affected council, West Lothian.
“It’s been evident for some time that councils across Scotland are facing a very challenging financial future, and Shetland is set to be hit the hardest,” he said.
“In his budget, Derek Mackay cut Shetland’s budgets to the bone, something the SNP has done repeatedly since 2010.
“It’s simply unfair for Shetland to have seen such a significant reduction in council budgeting in as little as seven years.
“There are many pressures on council funding in Shetland and it’s disappointing that they are on the receiving end of such cuts from the Scottish Government.”
But Todd said Tory austerity at Westminster had “put massive pressure on the Scottish Government’s budget”, and it was doing its best to “soften the blow for local councils”.
She said Accounts Commission figures also showed real-terms reductions in council funding were broadly the same as budget reductions imposed on Holyrood over the same period.
“All local authorities receive their fair share of the available funding, which is distributed using a needs-based formula which has been agreed ahead of the 2017/18 settlement with COSLA on behalf of its member councils – of which Shetland is one,” Todd said.
She pointed out that the figures in the report did not include an additional £160 million announced on 2 February and other sources of support available through council tax rises and support for integration of health and social care amounting to an overall increase of £323 million or 3.7 per cent.
“It is clear that the real cause of the reduction in local government funding is due to the Tory austerity agenda,” Todd said. “If Douglas Ross is really concerned about local government funding, then he should contact his Tory colleagues in Westminster and ask them to end their ideological obsession with austerity.”
Robinson agreed there “most certainly has” been a real terms cut in the Scottish block grant, but at the same time some local government reductions were “very much as a result of decisions taken by the Scottish Government” to protect spending in other areas.
“Health and education are their first priorities, and as a consequence local government has been squeezed,” he said. “Which is kind of ironic when you consider school education is provided by local authorities who have had their funds squeezed.”
He said the SIC’s own figures showed funding for education had reduced by around £7 million since 2010 – although the council “now spends a bigger share of albeit a smaller budget on education than we did at the start of this council”.
What does compound Shetland’s problems, Robinson added, was that notional loan support it has received “in lieu of money we would otherwise have spent servicing debt when we were debt-free” was also falling.
That sum has dropped from a 2010 peak of just under £16 million to £10 million now, and will dwindle away to nothing by the mid-2030s.