Scottish councils ‘must find savings’

5 Apr 18

The need for Scottish councils to find savings is “increasingly critical” against a backdrop of reduced funding and rising demand for services, the Scotland’s public spending watchdog has said.

In its annual overview of local government challenges and performance, released today, the Accounts Commission said a real terms cut in revenue funding of 9.6% over the last eight years meant councils faced a major challenge in delivering services at current levels while also making savings.

The watchdog warned that the requirement to direct funding towards education and social care – which together account for 76% of council spending – could create tensions between local and national priorities and risked the viability of some services.

Smaller departments had borne the brunt of budget cuts, with spend on planning and development services down by a fifth, and on culture services by over a tenth, in the last five years.

Councils had done a considerable amount to manage the impact of continued budget reductions, said the commission, with national indicators suggesting maintained or improved performance in a number of areas.

However, there was also evidence that budget cuts were having an impact on services, and customer satisfaction levels had fallen in areas such as refuse collection, street cleaning and libraries.

Some services, such as adult social care, were not keeping up with demand and there was a risk that quality was being affected.

Eleven mainly rural councils faced overall population decline – and therefore reduced funding under the population-based local government funding formula - while also seeing increased numbers of older people and therefore demand for social care. Their predicament reinforced the need to ensure the formula was fit for purpose, the report said.  

Graham Sharp, chair of the Accounts Commission, said councils faced the major challenge of reducing costs, maintaining services for an ageing population and putting significant policy and legislative change into practice - all at a time of increasing uncertainty, for example over the impact of Brexit.

“They have done a lot to manage the impact of budget reductions, but with forecast funding gaps higher than current levels of reserves for some councils the delivery of savings is now increasingly critical,” he said.

“Decisive leadership, innovative thinking around service delivery, and robust planning based on community engagement is now more important than ever to ensure council services stay sustainable.”

Gail Macgregor, resources spokesperson for the Convention of Scottish Local Authorities, said councils had already transformed and would continue to do so, but this was not an “overnight fix”.

The choices open to councils were increasingly restrictive, she added, with new Scottish Government policies obliging councils to target funding towards particular services.

“A lot of our funding comes for specific policy areas, this can stifle local autonomy and real ‘needs-based’ flexibility,” she said.

“Many of these policies place restrictions on councils and present immense pressures on other essential council services.”

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