By Richard Johnstone | 28 March 2013
Scottish councils face a continuing spending squeeze in the coming financial year and it will be a ‘tall order’ for them to maintain services, the Accounts Commission has warned.
The annual examination of the sector, prepared for the commission by Audit Scotland, found the 32 councils spent £21bn providing local services in 2012/13.
However, cuts in grants from the Scottish Government will leave substantial funding gaps over the next three years’, according to Responding to challenges and change. Funding from Holyrood to councils will fall by 2.2% in real terms from April.
In response, authorities would now have to consider decisions, such as cuts to services, which had previously been ruled out, the auditors concluded. For example, councils were increasingly charging for some services, but they needed to weigh these decisions against the impact on service users.
Accounts Commission chair John Baillie said: ‘It is clear that councils will need to do more with fewer resources.’
He added: ‘They have coped well with the financial pressures of recent years but these pressures are not abating.
‘They need to continue to review existing services as well as identifying fresh ways of providing them – working with their partners, sharing skills and resources and keeping a close tabs on budgets to ensure every pound is spent wisely. This is a tall order but there is a fresh appetite now from government and councils for new ways of working, such as more effective community planning.’
It was also ‘difficult to overstate’ the potential implications welfare reform will have on authorities in the year ahead, the report added. Councils had been preparing well for the changes, the report found, but there would be ‘major challenges’ in implementing the new arrangements.
The report follows a warning from the Convention of Scottish Local Authorities earlier this week that benefit reforms could have ‘a real and long-term damaging effect on the most vulnerable in society’.
The changes, which include localisation of Council Tax Benefit and caps on Housing Benefit, including the controversial ‘bedroom tax’, were effectively transferring the ‘cost and responsibility for the needs of people on benefit to local government’, Cosla warned.
Responding to the Accounts Commission’s findings, Cosla vice president Michael Cook said it was no surprise councils faced even tougher challenges in the year ahead.
He added: ‘We welcome that the Accounts Commission has provided a reminder of those facts in its annual overview report.
‘Local government provides a range of vital services that people rely on, day in and day out. As the report says, councils have been coping well and are working hard to protect their communities. However, diminishing resources and growing demand for services mean that most councils are predicting substantial funding gaps over the next three years.’
A Scottish Government spokesman said councils’ share of devolved budgets had increased since 2007.
He added: ‘The strong course set by the Scottish Government’s reform approach will enable local government to improve the outcomes that people and communities want to see, as well as reducing demand for their services. These reforms are being delivered in the face of Westminster cuts to our budget.
‘We welcome the recognition by Audit Scotland of the pressures that the UK government’s welfare reforms place on local and central government in Scotland, and the measures that we have put in place to work with local government to mitigate those.’
