SHETLAND Islands Council leader Steven Coutts has encouraged the Scottish Government to move beyond one year budget settlements to enable “better longer term planning”.
It comes as a new report from the Accounts Commission highlighted the financial pressures facing the country’s 32 local authorities.
Excluding Covid-19 support, councils have seen funding reduce in real terms by 4.2 per cent since 2013/14, with increasing amounts of money ring-fenced to meet Scottish Government priorities.
The report, published today (Thursday), said that while councils have increased reserves over the last year, they must “address the impacts of an overall reduction in funding and ongoing challenges caused by Covid-19”.
Coutts said the findings are not surprising.
“We have had to deal with real term cuts on our core government funding for a number of years,” he said.
“We have continued to deliver high quality key services but this gets more difficult every year with less money to do so and increasing demand.
“The recovery from the pandemic will only add to the pressure.”
The outgoing leader, who is not standing in May’s council election, said year on year budget settlements “create uncertainty”.
Every year MSPs in the Scottish Parliament pass a budget, which includes the core funding designated for councils.
Coutts encouraged the government look at longer term financial planning for local authorities.
Audit Scotland, which prepared the report, said the long-term funding position for councils “remains uncertain”.
It said there are significant challenges ahead as councils continue to respond to the impacts of Covid-19 on services, finances and communities.
Other aspects in the mix for local authorities include addressing child poverty, inequalities, improving economic growth and delivering Scotland’s net zero ambitions.
Accounts Commission chair William Moyes said: “Councils face serious challenges, driven by financial constraints, increasing demands on service and resource.
“Alongside these longer-term issues are the financial uncertainties caused by the impacts of Covid-19, including loss of income and additional costs.
“Now, as we look ahead and beyond council elections in May, councillors must determine how to restart services, deliver differently, save money and empower communities.
“They must do so alongside focusing on national priorities, including climate change.
“Whilst councils must address longer-term financial planning, having in place funding certainty, beyond a one-year settlement from the Scottish Government, remains a critical issue.”
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