Councils facing £350m shortfall

Coronavirus has left Scotland’s councils facing a £350 million funding shortfall, with MSPs warned cuts may have to be made to services.

Hugh Lightbody, from the local government body Cosla, said councils have delivered “vital services” during the pandemic but this has “come at cost”.

Sarah Watters, the chief officer for local government finance at the group, said authorities are now looking to “recast and reprioritise” their budgets.

She also told MSPs on Holyrood’s economy committee that talks are under way with the Scottish Government as local authorities seek to use cash already allocated to them for capital projects for day-today spending instead.

Mr Lightbody, the chief officer at Cosla’s Business Gateway national unit, warned: “With reductions in income from a range of sources, and increased expenditure to respond to the crisis, councils will face a funding gap this year of £350m once all consequentials have been factored in.

“Many councils will be starting from a deficit position, so if the Covid-related gap cannot be addressed then there will ultimately need to be further reductions in services.”

Ms Watters said Cosla has been working with the Scottish Government to “explore a range of fiscal flexibilities that we would seek to use in this financial year and next financial year”, adding this includes using a proportion of this year’s general capital grant for revenue purposes.