There really isn’t a short answer to Ross’s question (‘Worst deal of all?’, SN 9/5/17) but I’ll have a go!
The Scottish Government decides how much will go into the local government funding pot each year. The amount for councils has reduced by more than the real-terms reduction in the Scottish grant because the Scottish Government has given relative protection to NHS spending in Scotland, for example, at the expense of local government.
The Scottish Government advises COSLA of the amount of money available for all 32 councils and this figure is then run through a distribution formula. The formula was agreed with the Labour/Lib-Dem coalition government before the SNP came to power. More information can be found here.
The formula is complex since it contains around 100 “indicators” that are updated every year. These indicators cover everything from the length of roads a council has to maintain, to age demographics – how many children, old people etc. it has to provide services for. This means that there are variations every year. We gained £5 million from the same formula in 2008/9.
John Swinney wanted to review the distribution formula soon after he became finance secretary. However, he took the lid off, had a look and slammed it down again very quickly without making any significant changes. It is hugely complex as you might imagine. There’s also floor and ceiling mechanisms which are supposed to ensure that no council loses too much from one year to the next and no council gains too much. Unfortunately this can’t deal with the cumulative effect of repeated cuts; it’s the formula that has worked against us more so than anything the government has done.
I wanted to change it but when the amount going into the formula is being reduced the only place that extra money can come from is other councils. When you consider that COSLA itself is a democratic organisation, where currently around 12 of the 32 councils in Scotland are losing more while 20 aren’t doing as badly, then this is even more difficult. I’m not a betting man but those aren’t good odds.
I scored a short-lived victory a few years ago when Labour decided to put a whip on its 16 members at COSLA in order to not update the indicators on the basis that councils had been offered the same amount of money from the government as in the previous year.
I voted with them as I suspected Shetland would be quids in – and we were. To the tune of around £1.4 million! This was short lived though because Aberdeen City very quickly realised that they were set to lose about £7 million by this while Glasgow would gain around £13 million.
The matter was brought back and the decision was reversed but not without controversy. Four councils quit COSLA, while others gave notice and the leader of Aberdeen City Council – Barney Crocket – was a casualty.
That said, the fact that Comhairle nan Eilean Siar has also suffered similar cuts to those we have endured despite having both an SNP MP and MSP doesn’t lend itself to the conspiracy theories. Does it?
I hope this goes some way to explaining the situation. I don’t believe that it’s one that COSLA can resolve on its own and I think the review, that John Swinney thought better of, is long overdue and could, perhaps, be undertaken by his successor Derek Mackay.
17 Burnside, Lerwick
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