Scotland’s councils face a “financially uncertain” future while still dealing with the ongoing challenges caused by Covid-19, according to a report from Audit Scotland.
The report, published by the Accounts Commission, reveals that councils’ total funding and income increased by £1.8bn in 2020/21. However, this was mainly because of additional Scottish government Covid-19 funding of £1.5bn.
Excluding the additional funding, council funding reduced by 4.2% in real terms.
Local authority reserves increased considerably, but again this was due to Scottish government funding that is still committed to Covid-19 recovery. Other elements of the reserves are earmarked for economic recovery, transformation projects and, in some cases, balancing budgets.
This, the report suggests, limits councils’ flexibility to respond to unforeseen challenges in the future.
William Moyes, chair of the Accounts Commission, said: “Councils face serious challenges, driven by financial constraints, increasing demands on service and resource. Alongside these longer-term issues are the financial uncertainties caused by the impacts of Covid-19, including loss of income and additional costs.”
Moyes called for a multi-year funding settlement. “Whilst councils must address longer-term financial planning, having in place funding certainty, beyond a one-year settlement from the Scottish government, remains a critical issue.”
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