Councils warned over scale of financial challenges
Councils must reform "at a pace and depth we've not yet seen" to avoid facing unsustainable losses, Scotland's public finance watchdog has warned.
The Accounts Commission urged local authorities to be upfront about the "scale of financial challenge being faced".
Its latest report, on the 2023-24 financial year, found councils had to plug a budget gap of £759m due to a real-terms decrease in revenue funding from the Scottish government.
It said councils are increasingly reliant on cuts which becomes progressively more difficult year-on-year, and again had to use reserves to remain within their agreed budgets.
Jo Armstrong, who chairs the Accounts Commission, said: "Scotland's councils face a challenging future, with significant financial risks and uncertainties.
"This has been compounded by pressures outwith their control, including ever-increasing demand on services and inflation.
"An expected increase in funding for the year ahead doesn't cancel out the urgent need for transformation, at a pace and depth we've not yet seen.
"With services already being impacted, councils must be clear with communities the scale of financial challenge being faced. Working with communities to deliver differently is vital."
In its Local Government in Scotland Financial Bulletin for 2023-24, the Accounts Commission found there was a 3.3% reduction in councils' total revenue funding and income in 2023-24, compared with 2022-23.
It also found that 12 out of 29 councils that provided data made unplanned use of their reserves in 2023-24 to manage budget pressures.
The watchdog said councils needed to "intensify transformation activity, progressing at scale and pace to ensure their financial sustainability".
It also said that how councils plan to use their reserves, make savings and transform their services needed to become more transparent.
The need to consult local communities and clearly communicate the implications for local services of the budget decisions taken has "never been more important", according to the watchdog.
Since 2007, council tax has generally either been frozen or increases have been capped by Holyrood.
However, a current freeze on rates is due to end in April.
The Scottish government says it is offering local authorities an extra £1bn in 2025-26 and hopes large council tax rises will not be needed.
Individual authorities are expected to decide on any increases next month.
Scottish Conservative finance spokesman Craig Hoy said: "The SNP has been starving councils of resources for years and Scots have seen public services crumble as a result."
Scottish Labour local government spokesman Mark Griffin urged the government not to "bury its head in the sand about the timebomb in local government finances".
He said: "Years of brutal budget cuts by the SNP and growing demands have left councils across Scotland at breaking point."
A Scottish government spokesperson said the 2025-26 Budget would give councils a £1bn funding hike on the previous year.
They added: "Alongside additional funding for local authorities to spend as they require for their communities, there is targeted investment in teacher numbers, additional support for learning and councils' work to tackle the climate emergency."
Cosla has been asked for comment.
Councils must speed up reform to save services - watchdog
Restoring council budgets will take time - Cosla
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
7 hours ago
- Yahoo
Badenoch to call for end to oil and gas windfall tax and ban on new licences
Tory leader Kemi Badenoch is set to call for an end to the windfall tax on oil and gas companies and the ban on new licences. The energy profits levy was put in place under the previous Conservative government but extended when Labour entered power. Designed to fund interventions to bring down household bills, the policy has been criticised by those in the industry. Speaking at the Scottish Conservative conference in Edinburgh on Friday, Mrs Badenoch is expected to tout the oil and gas sector, accusing the UK Government of 'killing' it, claiming 'renewing our party and our country means standing up for our oil and gas industry'. She will add: 'When the oil and gas windfall tax, the energy profits levy, was brought in, the oil price was near a historic high, at the exact time as energy bills for the British people were sky-rocketing. 'But there is no longer a windfall to tax. It has long gone. And the longer this regressive tax on one of our most successful industries remains, the more damaging it becomes. 'Labour have extended and increased this tax. They are killing this industry.' If the measure remains in place to 2030 as intended, Mrs Badenoch will say 'there will be no industry left to tax'. She will add: 'So, today, I say enough. Labour must remove the energy profits levy. Labour must speed up the process of replacing it with a system that rewards success and incentivises investment. 'Because we shouldn't have this energy profits levy at all. 'We must scrap the ban on new licences. 'We must overturn the ban on supporting oil and gas technology exports. 'And we must champion our own industry. 'We must let this great British, great Scottish industry thrive, grow and create jobs – ensuring our energy security for generations to come, driving growth and making this country richer in the process.' Mrs Badenoch will address her first Scottish party conference as leader on Friday while her counterpart north of the border Russell Findlay will deliver his inaugural address on Saturday. Responding to Mrs Badenoch, Simon Francis of the End Fuel Poverty Coalition said her comments were 'out of touch', adding: 'Even with the windfall tax in place, the energy industry made over £115 billion in profits in 2024 alone. 'Meanwhile, average household energy bills remain hundreds and hundreds of pounds higher than they were before the energy crisis started. 'While the Government is right to be consulting on reform of the windfall tax, maintaining a profits levy could help fund home upgrades and a social tariff which would bring down energy bills for the most vulnerable in society.' SNP MSP Kevin Stewart said: 'The Tories wrecked our economy, presided over soaring household bills and ripped Scotland from the EU against our will. 'And now they're lurching further to the right as they haemorrhage votes to Nigel Farage. 'This weekend will be an important reminder of how Westminster has failed Scotland. Only the SNP is offering hope and a brighter future as an independent nation.' Scottish Labour deputy leader Jackie Baillie said: 'While the Tories and SNP let energy workers down by failing to plan for the future, Scottish Labour is committed to taking action towards reaching net zero, creating jobs and cutting energy bills. 'The Tories are on the side of oil and gas giants rather than working Scots, but Scottish Labour will work with the UK Government and use devolved powers to deliver a just transition for the industry. 'With Kemi Badenoch desperately attempting to rally the few remaining Scottish Tories, it seems like it won't be long until they can fit all of their MSPs in a single taxi.'
Yahoo
12 hours ago
- Yahoo
Acorn carbon capture project to get £200m, Miliband confirms
UK Energy Secretary Ed Miliband has confirmed that £200m will be provided to progress the Acorn Carbon Capture and Storage (CCS) scheme in Aberdeenshire. Miliband - who has been visiting the St Fergus gas terminal where the project will be based - said he had told the company behind the project that he expected it to make a final investment decision by the end of the parliament. He said he wanted to see significant progress "by the turn of the decade" but would not commit to a firm timetable. Environmental group Friends of the Earth, which is sceptical about carbon capture, said the "scarce public money" would only directly benefit "greedy oil and gas companies". The investment in the Acorn Project comes as part of the UK government's spending review which will increase Holyrood's budget by £2.9bn a year on average. As part of his announcement, Miliband added that a Scottish Labour government would deliver new nuclear power in Scotland. Acorn has said its project will safeguard about 18,000 jobs that would otherwise have been lost, including jobs at Grangemouth. CO2 captured at Grangemouth will be transported to storage facilities under the North Sea, avoiding its release into the atmosphere. The jobs will be needed to build pipelines to transport the CO2 safely and generate low-carbon power to homes and businesses. The UK government is providing similar funding for the Viking carbon capture project in the Humber. Miliband said: "This government is putting its money where its mouth is and backing the trailblazing Acorn and Viking CCS projects. "This will support industrial renewal in Scotland and the Humber with thousands of highly-skilled jobs at good wages to build Britain's clean energy future. "Carbon capture will make working people in Britain's hard-working communities better off, breathing new life into their towns and cities and reindustrialising the country through our Plan for Change." Scotland to get extra £2.9bn from spending review, says Treasury Acorn Project funding to be announced in spending review Tim Stedman, chief executive of Storegga, lead developer of Acorn, said: "We warmly welcome the UK government's support for the Acorn project and the commitment to development funding that will enable the critical work needed to reach Final Investment Decision (FID)." He said the funding announcement was a "milestone" and was on top of significant private sector investment. "We look forward to working with government in the months ahead to understand the details of today's commitment, and to ensure the policy, regulatory and funding frameworks are in place to build and grow a world-leading UK CCS sector," he added. Once Acorn and Viking are operational, combined, it has been claimed they could prevent up to 18 million tonnes of CO2 being released into the atmosphere each year. Those involved in the CCS schemes say they can also play a role in low-carbon power and hydrogen production, supporting thousands of jobs. Dr Liz Cameron, chief executive of Scottish Chambers of Commerce, said: "The government's backing for the Acorn Project is a significant endorsement which will help to make the north east a world leader in the low-carbon industry. "This major carbon capture and storage facility puts us on an ecologically more sustainable trajectory and will bolster the region's economy by creating up to 15,000 jobs in construction and attracting billions in private investment. "Whilst this intervention is undoubtedly welcome, we urge both the UK and Scottish governments to work in collaboration to realise Acorn's potential in full." Caroline Rance, head of campaigns at Friends of the Earth Scotland, said: "This is an enormous handout of supposedly scarce public money that will only directly benefit greedy oil and gas companies. "Politicians are paying hundreds of millions to keep us locked into an unaffordable energy system which is reliant on fossil fuels and is destroying the climate. "Carbon capture technology has 50 years of failure behind it, so businesses, workers and the public are being sold a lie about its role in their future." She said building new fossil fuel infrastructure would undermine the energy transition and embolden oil firms to continue drilling in the North Sea. "Both the UK and Scottish governments should instead be backing climate solutions that can improve people's lives such as upgrading public transport, ensuring people live in warm homes and creating green jobs for the long-term," she added.
Yahoo
12 hours ago
- Yahoo
Swinney begs rebels not to oust him
The SNP leader has pleaded with party rebels not to press ahead with a threatened leadership challenge after a shock by-election defeat. John Swinney, the First Minister, warned it would not be a 'good idea' for disaffected Nationalists to try and oust him at the SNP conference in October. Mr Swinney said he had helped the SNP 'recover from a very, very difficult situation' following the troubled final months of Nicola Sturgeon's premiership and Humza Yousaf's chaotic tenure. His plea came the day after it was reported that 25 senior SNP figures met on Monday evening to discuss removing Mr Swinney, barely a year after he succeeded Mr Yousaf. They warned that he risked facing a leadership challenge at the SNP conference in Aberdeen unless he comes up with a new strategy to achieve Scottish independence. Discontent with his leadership has surfaced after Labour pulled off a surprise victory in last week's Hamilton, Larkhall and Stonehouse by-election, which the SNP had been hot favourites to win. The defeat followed Labour's rout of the SNP in last year's general election, also under Mr Swinney's leadership. Alex Neil, a former Cabinet minister in Alex Salmond's and Ms Sturgeon's governments, said that Mr Swinney should be replaced. Mr Swinney is expected to face robust questions at a meeting of the party's ruling national executive committee on Sunday about his by-election campaign strategy, which focused on the claim that it was a straight fight between the SNP and Reform UK. The Guardian reported that he faced criticism about the strategy at a 'fractious' MSP group meeting on Tuesday, with one backbencher claiming he had 'panicked' at the rise of Reform, which finished a close third in the contest. Insiders also expect him to face pressure to come up with much clearer strategy for achieving independence, after he warned that support for separation would have to rise to more than 60 per cent to get another referendum. Under SNP rules, any member who can secure 100 nominations from 20 different branches ahead of party conference can trigger a leadership vote. Mr Swinney admitted that he had 'absolutely no idea' about whether he would face a challenge but said: 'I don't think that would be a good idea.' Speaking after First Minister's Questions at Holyrood, he said: 'I came into office to help the SNP recover from a very, very difficult situation in the spring of 2024, and I'm very focused on making sure that we make that recovery to be ready for the 2026 elections, and that's what's the focus of my thinking and my planning. 'I've obviously taken forward a number of steps over the course of the last 12 months to get the SNP into a better position.' He insisted that the SNP would not have even been in contention in the by-election before he took over, despite the party winning the seat in the 2021 Holyrood contest by 4,582 votes. Labour won the contest last week by 602 votes, after the SNP vote in the seat dropped by 17 points compared to 2021. However, Mr Swinney said he was 'not in the slightest' worried about the internal briefing against him, and rejected criticism that he was not moving fast enough on independence. He said he had spent the first year of his leadership 'addressing the issues that people are immediately preoccupied by', such as the cost of living crisis. Mr Swinney said this was necessary to ensure 'we could get a hearing' from the public, but his 'phase two' plan was to 'open up a conversation about independence' ahead of next year's election. But Anas Sarwar, the Scottish Labour leader, said: 'Even John Swinney's MSPs are now openly rebelling against him with senior figures saying he has two weeks to come up with a new idea to save his job. John Swinney and the SNP are out of ideas, out of steam and out of time.' He told First Minister's Questions: 'One SNP MSP said about John Swinney, 'there is no energy, no fire, no boldness, no long-term vision' – they are right.' It is not thought that an MP or MSP will directly challenge Mr Swinney for the leadership ahead of the May 2026 election, but the rebels said a rank-and-file activist could come forward as a stalking horse. They warned that any contest would be 'hugely damning and damaging, and make the party look utterly ridiculous'. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
