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Sat April 20 2019

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Report calls for change in Scottish local government funding

4 days A report published today by Unison Scotland and the Jimmy Reid Foundation calls for changes in funding for local government, including enabling PFI contracts to be taken over by the Treasury.

The report, Additional Revenue streams sources of funding for the delivery of local government services, says that local government has borne the heaviest burden of austerity cuts to the Scottish budget since the financial crisis. It says that there isn’t enough money in the local government budget to meet the needs of citizens and that there is a need to examine new and alternative sources of revenue for local government.

The report recommendations include that unions and others should also explore how local authority debts and PFI/PPP contracts can be taken over by the Treasury, saving local government many billions in interest charges each year and so releasing tax revenues for investment in local economies and communities.

Parliament, councils, unions and communities should explore how new taxes and levies can be introduced to support inclusive growth and the foundational economy, says the report. Unions should consider how municipalisation of buses, energy, and other public services could be appropriately pursued. This may require powers to be devolved from Westminster.

 Local government has experienced substantial cuts to its budget and ability to deliver services to the public, says the report. The Information Service Annual Benchmark report shows that total revenue funding for councils has fallen by 8% in real terms across eight years. There has been a reduction of almost 15% in roads spending and of almost 10% in environmental services spending, the report says.

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Professor Mike Danson, the lead author of the report, said: “Within the constraints of the fiscal powers devolved under successive Scotland Acts, there are still some opportunities to generate greater funding for public services locally. Some changes will require time to explore, plan and introduce but it is economically efficient and effective to shift the tax burden onto property and land owners and away from council taxpayers, making the tax system more progressive and more based on ability to pay.”

Unison Scottish secretary Mike Kirby said: “Over the years, the balance of funding for public services through local government has shifted from approximately 50% coming from national government to 50% being raised directly by local authorities, to 85% of funding coming from central government and 15% being raised directly by local authorities.

“Together with an overall reduction in funding, during a period of austerity, this has resulted in severe financial pressures and impacted upon the quality and delivery of vital public services. Politicians in all spheres must create the time and space for a fundamental review of funding local government. This report is a contribution to that essential debate.”

MPU

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