Local councils in Scotland could be in financial crisis, with a study by the Local Government Information Unit (LGIU) suggesting that a quarter of councils fear they will be unable to balance their budgets next year. The study gathered responses from 42 council leaders, chief executives, and finance directors representing three-quarters of Scotland’s 32 local authorities. All respondents said they were planning spending cuts on services with 97% confirming they would be increasing fees and charges.
More than four in five respondents noted that cuts would be allocated to back-office and corporate services, with two-thirds saying they would also cut education spending, outlay on parks and leisure, and business support. The LGIU warned that it was “only a matter of time” before one council went effectively bankrupt. The council umbrella group, Cosla, recently warned that local authorities need almost £14.4bn in the Scottish Budget just to “stand still”.
The survey also revealed that respondents believed cuts to services would be made evident to the public, with only 24% believing services were as good as they were last year. In addition, the study stated that only 8% of respondents were satisfied with the progress the Scottish government had made in considering and involving local government in the decision-making process.
During the recent local election campaign, Scotland’s First Minister, Humza Yousaf promised a council tax freeze, however, a council tax freeze was eventually announced in October, with councils waiting to hear more details about compensation. The Scottish government reported that the resources available to councils in 2023-24 had increased by £376m, compared to the previous year.
The LGIU chief executive, Jonathan Carr-Watson, claimed that councils in Scotland were “raising a red flag” that finances are “completely unsustainable”. Carr-Watson recommended that the Scottish government worked together with councils to restore trust, removed ring fencing, identified revenue streams, and reformed core funding for councils to ensure that residents and particularly the most vulnerable in communities had access to the services they need and pay for
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