Councils are handed ‘game changing’ package of emergency virus support

UNDER-PRESSURE local councils have been handed extra funding and will be given flexibility over their finances to help authorities respond effectively to the pandemic.

Local authorities have faced large funding gaps as costs have increased and revenue streams have been reduced amid the coronavirus crisis.

The Scottish Government has stumped up an extra £90 million directly to local authorities, while council trusts, some of which provide leisure and cultural services, will be able to receive a share of £49 million of extra funding that was made available by the UK Government last month.

Along with new financial flexibilities, the Scottish Government insists the support package could be worth up to £750 million.

It is believed that if all councils use the new flexibilities to the maximum, it could be worth up to £600 million – but there are concerns the new powers could just delay costs until future years.

Councils will be able to use receipts from selling assets such as buildings to fund one-off revenue funding pressures including the extra costs brought on by the pandemic. Authorities will also be able to extend a debt repayment period over the life of an asset, rather than the contact period.

Councils will be allowed to take a repayment holiday in either this or the next financial year to defer loan fund repayments.

The Scottish Government has already committed £382 million to help councils survive the pandemic and officials claim the latest support package and flexibilities will take the total support up to £1 billion.

Finance Secretary Kate Forbes said: “Working in partnership with Cosla, the Scottish Government has delivered on our commitment to support councils across Scotland with a game changing package of financial flexibilities, giving them the powers they need to make informed decisions about spending at a local level.

“This support will help councils and their trusts manage the loss of income they are facing from local services due to Covid-19.”

Cosla’s resources spokesperson, Gail Macgregor, said councils face “a real challenge”.

She added: “We welcome this substantial package of measures from which councils can choose, depending on local circumstance.

“Responding to Covid-19 whilst continuing to deliver essential, everyday services has put extreme pressure on local government finances this year. The pandemic has also meant substantial losses of income across a range of council services including leisure, sport, culture, and planning.”

Scottish Labour local government spokeswoman, Sarah Boyack, said the help “has come too late in the day for councils to avoid having to use their reserves” warning that “it remains to be seen whether the increased flexibility in dealing with debt is enough to enable councils to continue to provide services and jobs”.