FINANCE Secretary Kate Forbes has insisted the cash settlement for councils in next year’s Budget is fair – despite claims that she is “short-changing” local government.
Forbes was pressed on the issue after local government body Cosla claimed councils are not getting enough cash to fully fund the Scottish Government’s public pay policy.
Cosla resources spokeswoman Gail Macgregor also warned that if the additional money authorities will receive is not maintained, Scots could be facing a council tax hike of 6% in 2022-23.
Forbes refused to say if the funding can be continued, as she is “not in a position to determine what the envelope is for next year’s Budget”.
But with the Scottish draft Budget for 2021-22 having allocated £11.6 billion to local government, Forbes said: “I do think in short that it is a very fair settlement.”
However she told the committee that there could be more cash to come to Scotland.
The ongoing coronavirus pandemic means Westminster could increase funding for Holyrood, with the Finance Secretary saying: “I think there will be further funding.
“Local government is on the front line in terms of distributing grants and other supports, so yes, local government is a priority.”
With Budget talks with opposition parties now under way, she also said extra cash for councils is a priority for them and she would be “very happy to look at how we can provide additional funding”.
Tory MSP Murdo Fraser pressed her on the overall allocation to councils.
He said the Scottish Parliament Information Centre (Spice) had said that while the Scottish Government’s overall resource budget had increased by 11.2% last year, local government core funding had only risen by 0.9%. Fraser told Forbes: “That looks like you are short-changing local government, who have of course borne the brunt of many of the issues and responsibilities in relation to Covid, not least rolling out business support.”
But the Finance Secretary said local government would see an increase of £335.6m for revenue spending, with councils also getting an additional £259m to deal with “Covid pressures”.
However, Cosla’s chief finance officer Sarah Watters said only £94m of the £335.6m mentioned by Forbes can be used for “dealing with the pressures that are already in the system”, due to ring-fencing.
Forbes went on to state that money being given to councils to make up for the loss of income they have suffered during the pandemic is being increased from £90m to £200m.
She told the committee: “Overall the funding settlement deals with the Covid pressures, there is an increase in the core settlement.
“That is a point that is accepted by Cosla as well as ourselves, and on top of that compensation for the lost income.”
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