Scotland’s “long overdue” ‘New Deal’ settlement for local government must be “urgently” finalised to allow for more long-term planning, flexibility and transparency in councils’ budgeting processes.
That’s the message from the Accounts Commission to the Scottish government and COSLA in a new report.
Currently, the audit body said, an increasing proportion of funding is ringfenced for national priorities, which constrains councils “from making decisions about how to best use money to address the local needs of their citizens and communities”.
A key recommendation of the report was that the government and COSLA should agree “a new partnership agreement with councils that supports collaboration” as well as “a fiscal framework for local government that supports sustainable funding and greater financial flexibility and transparency”.
Additionally, the Scottish government “needs to provide more detailed financial information” such as a breakdown of type of funding and individual council allocations to support councils’ longer-term financial planning.
Councils, the report stated, need to “set out medium- to long-term financial plans that detail how they will make recurring savings and reduce reliance on reserves to fill budget gaps” and “how council resources are targeted to achieve their long-term policy and performance priorities”.
Councils must also now rethink how they work together, and with local partners and communities, to provide financially sustainable services while tackling national issues such as climate change, child poverty and inequalities, the report concluded. Few councils provide services jointly or share support services across different councils, it noted. Councils also need better data in order to ensure that they can demonstrate that their services are meeting their citizens’ needs.
Tim McKay, acting chair of the Accounts Commission, said: “The New Deal for local government, agreed between the Scottish government and COSLA, is long overdue. Putting this in place will give councils longer-term financial stability, supporting them to make decisions and make the fundamental changes that are urgently needed.
“Councils have gone beyond the point where making savings is enough. If the change needed doesn’t happen now, some services will continue to get worse or deeper cuts will be made. This will impact communities and individuals that are already at crisis point with the effects of inequality and persistently high poverty.
“Councils need to have open and honest conversations with their communities and staff about the future of council services.”
The New Deal settlement for local government is expected to include a partnership agreement with councils, a fiscal framework to support greater transparency and accountability, and a working group to explore different options for the funding of local government in the future.
