£780M BLACK HOLE
Local leaders slam SNP as budget shortfall to grow
CASH-STRAPPED councils are facing massive tax rises and huge service cuts to plug a £780million black hole.
A new report published today warns of “ever tougher decisions” by town hall chiefs.
According to the Accounts Commission, local councils faced a funding gap of up to £585m this year when setting budgets. Experts said this is estimated to rise by around £200m by 2026/27.
They said the most common way of balancing budgets has been cuts, dipping into reserves and charging citizens for services.
They added the near six per cent in Scottish Government revenue funding to councils “masks” problems. The Commission said “almost all” the increases in funding have either been ringfenced for policies or allocated for pay rises. Stephen McCabe, leader of Labour-run Inverclyde council, blamed the Scottish Government’s council tax freeze. He said: “I said at the time the freeze would push councils one step closer to bankruptcy. This report proves I was right.
“The only way council budgets can be balanced is through significant cuts to jobs and services and large rises in council tax.
“I call on the new First Minister to rule out any further centrally imposed freezes or caps on council tax.”
Councillor Katie Hagmann, resources spokesperson at council umbrella group COSLA, said: “The Accounts Commission’s report reinforces what we have been saying about the severe challenges Scotland’s councils face in trying to balance the books and deliver essential frontline services. It is vitally important these concerns are acted upon.”
Derek Yule of the Accounts Commission said: “It’s getting harder for councils to do more with less. They have to find and then deliver significant levels of savings to address budget gaps.
“Fully engaging with local people and being clear about the different and difficult budget choices is vital, whilst understanding the impacts on the most vulnerable.”
Cabinet Secretary Shona Robison said: “The report from the Accounts Commission confirms that the Scottish Government provided a real terms increase in revenue funding for local government in 2024-25, building on increases in recent years.”