Highland Council Appeals To The Scottish Government To Reverse Budget Reductions

15th January 2022

The Highland Council is calling on the Scottish Government to provide greater transparency in relation to its budget settlement for local government and is seeking further funding to address a range of significant external budget pressures. The Council has asked the Government to examine the analysis of the budget settlement which shows less money will be flowing into the Highlands from Edinburgh.

Leader of The Highland Council, Cllr Margaret Davidson, met with the Finance Secretary, Kate Forbes today (13 January) to explain the implications of the Scottish Government's budget settlement for Highland Communities.

She advised Ms Forbes that the Council was facing a £3.9m core budget reduction, coupled with significant additional pressures, resulting in an overall budget shortfall in the region of £38m. This will lead to some very challenging decisions being taken at future meetings.

Whilst she recognised the additional funding from government to support areas such as adult social care, teacher numbers, free school meal expansion and free music tuition, she emphasised that these moneys could only be used to support those specific government priorities, hiding the true extent of the cuts to the Council’s core budget which supported local people in the Highlands.

Acknowledging the Council could look to raise Council Tax, Mrs Davidson explained: "Each percentage increase in council tax raises only £1.3M of revenue, meaning that it would require an increase of some 30% to close the gap, which we simply will not expect our communities to afford. This leaves us with no option but to reduce or cut core council services.

“It is particularly concerning that the settlement does not include funding for the increased National Insurance employer contributions for which the Scottish Government received compensatory funding from the UK Government through the Barnett consequentials. This funding has indeed been passed directly to the NHS in Scotland and to local government in England, Wales and Northern Ireland. We need fairness in Scotland too.

“I am pleased we have a continuing dialogue with Government on our budget and welcome the fact that Ms Forbes has offered one of her finance officers to work through the budget with us and to be clear we have a shared understanding of what is being proposed. I am always happy to meet with Ms Forbes because, as a local MSP, she understands the impact of local authority service cuts on Highland communities.

“I will be following up our meeting with a letter setting out the full impact to Highland of this settlement. In particular, we want to know why we have not received the funding to cover National Insurance Employer contributions and why the Scottish Government is not taking account of the enormous inflationary pressures which local authorities are facing as well as the impact on families and businesses. We will be seeking greater transparency regarding the nature of new funding streams and the many gaps remaining in terms of how existing Covid pressures and the Government’s new requirements are to be funded."

Depute Leader, Alasdair Christie said: “The Council continues to feel the impact of Covid on its budget and the increased costs and reduced income expected in the next 12 months - with additional pressures arising from the hidden longer term harms of Covid expected to be with us for many years to come. With no funding to support those costs the Council will have to reduce services elsewhere to pay for them and this will impact further on hard hit Highland communities. We are at the crossroads of our recovery and a little bit more support and investment in local government from the Scottish Government would go a long way to improving the everyday lives of Highland folk

Cllr Jimmy Gray added: “Highland Council like the other 31 local authorities in Scotland are in cross-party agreement that this budget settlement is bad news for local government and that councils cannot accommodate the significant cuts and pressures, without impacting on services, jobs and communities in our region. This comes at a time when local government has stepped in to deliver existing and new critical services throughout the pandemic.”

Notes: On 22 December all of Scotland’s 32 Council Leaders unanimously rejected the Scottish Government’s settlement stating that ‘they owe it to their communities to take the case for a better financial settlement directly to the First Minister as a matter of urgency’. To date there has been no reply to Cosla’s letter.