Councils need to make fundamental changes to meet demands, new report finds

21 March 2019, 06:18

Scotland's councils are dealing with rising demands for care and increasing staff sickness rates while day-to-day funding from the Scottish Government has fallen in real terms over the last six years, a new report has warned.

The Accounts Commission said councils may have to make "fundamental" changes to "ensure services meet the shifting demands of local communities".

The local authority watchdog's latest report on Scotland's councils said while revenue funding would rise by 1.1% in real terms between 2018-19 and 2019-20, budgets had fallen by 6% overall since 2013-14.

At the same time, local government is having to spend more of its cash on central government priorities - with the proportion of funds going to support specific Scottish Government policies increasing from £643 million this year to £1.2 billion in 2019-20.

Such initiatives will account for 12.1% of council funding next year, the Accounts Commission found.

The 2019 Local Government Overview report warned this could mean services not viewed as priorities by ministers could have budgets cut by up to 16%.

With councils responsible for delivering both education and care services, demographic pressures such as Scotland's ageing population "continue to increase the demands on council services".

Almost a third of all local authorities expect to record an increase in the number of people aged over 65 and youngsters under 15 in their area.

To increase their budgets, 12 councils have opted to increase council tax by the maximum permitted level of 4.8%, with seven authorities upping bills by between 3.9% and 4.5%, while the remaining 13 have approved rises of 3%.

In addition, the report found councils have increased 11 different charges by more than the rate of inflation between 2016-17 and 2018-19 - with the cost of a burial plot having risen by 20% on average over this period, while burial services have gone up by an average 12%.

While local government employs around 243,000 people - the full-time equivalent of 197,500 staff - staff numbers have fallen by almost 5,000 since 2013.

Meanwhile, the average number of sickness days taken by non-teaching staff has increased from 10.9 days in 2016-17 to 11.4 days in 2017-18 - with staff in Clackmannanshire Council absent because of illness for an average of 16.8 days.

Overall, the report said "councils need to continue to deliver on the increasingly complex range of local and national priorities and initiatives, despite several years of reducing funding and increasing demands on services".

It added: "Between 2013-14 and 2019-20, total revenue funding has fallen 6% in real terms.

"Scottish Government funding to councils is forecast to continue to reduce in the medium-term."

The report also stated: "Scottish Government revenue funding to councils has reduced in real terms between 2013-14 and 2019-20, while national policy initiatives continue to make up an increasing proportion of council budgets.

"This reduces the flexibility councils have for deciding how they plan to use funding."

The commission found "across local government most performance indicators are improving or being maintained" although it added that "some service areas show more strain"

Accounts Commission chairman Graham Sharp said: "It's important to recognise that councils are working hard to maintain and, in some cases, improve services.

"Now fundamental change is needed to ensure services meet the shifting demands of local communities, with councils working and collaborating with communities to deliver the change needed.

"Councils must now focus on changing how frontline services are designed and delivered."

Gail Macgregor, resources spokeswoman for the local government body Cosla, said: "Today's Accounts Commission report, like other recent independent reports, clearly shows that councils have performed well and continued to deliver essential services for their communities over the last year despite the severe financial challenges that they face.

"Today's report also makes clear that difficult times and choices lie ahead - coupled with continuing pressure on our finances."

Opposition politicians hit out at councils for increasing the fees faced by bereaved families.

Tory local government spokesman Alexander Stewart said: "It is inexcusable that the SNP government expects to slash council budgets and force grieving families to pay more as a consequence.

"If Nicola Sturgeon was serious about properly resourcing local government many of these increases would not be necessary.

"This SNP government has again cut council finances to the bone, then expects hard-working council tax payers to pick up the slack."

Labour finance spokesman James Kelly said the report "exposes the brutal legacy of the SNP's cuts to council funding".

He said: "We know across the country local authorities are struggling to keep up with demand and having to make brutal cuts and increase charges as a result.

"It's simply horrifying that the cost of burying a loved one is soaring because of brutal cuts to councils."

A Scottish Government spokesman said: "We recognise there are challenges but we have continued to treat local government very fairly.

"Local authorities will receive £11.2 billion in 2019-20 through the local government finance settlement, a real terms increase in both revenue and capital funding which, together with actual council tax rises, provides an extra 5.6% in overall resources to support local services."

He added: "We welcome the report's findings that local authority performance is largely improving or being maintained.

"We expect all councils to consider and take any necessary action to implement the report's recommendations to help meet future challenges and continue to improve outcomes."