Mackay accused of ‘sleight of hand’ over £320m raid on local government budgets

Finance secretary Derek Mackay has been accused of funding spending commitments with a £320 million “raid” on local government.

Delivering his draft budget for 2019-20 at Holyrood on Wednesday, Mr Mackay promised a real-terms increase in the total local government settlement of more than £210m.

But independent analysis published by the Scottish Parliament Information Centre (SPICE) showed the core local government revenue settlement would fall in real terms by 3.4 per cent.

It led the Scottish Greens to accuse the SNP of forcing cash-strapped local authorities to fund national spending commitments.

The minority SNP government has relied on the support of the Greens to get recent budgets through Parliament.

But Greens leader Patrick Harvie yesterday used First Minister’s Questions to accuse the SNP of attempting to conceal council cuts.

He said hundreds of millions of pounds in new Scottish Government commitments, including on nursery places, would be taken from what should be core funding for council services such as schools, social care and libraries.

Mr Harvie said: “Yesterday the Scottish Government’s finance secretary claimed he was providing a real-terms increase of more than £200m to local services around the country.

“Once again, this claim ignores the fact the Scottish Government is forcing councils to use their resources to fund Scottish Government policies.”

Mr Harvie said analysis by local government organisation Cosla had seen through the government’s “sleight of hand” to reveal a £200m cut.

He added: “Later, Parliament’s independent research unit – whose impartial work sometimes shows the truth being somewhere between what the Scottish Government and local government say – they produced more detailed work, saying the truth is more than a £300m cut to local services.

“Councils around the country are now being forced to look at cuts to schools, social care, parks, libraries. Where does the First Minister think those cuts should fall?”

Nicola Sturgeon said: “The settlement outlined yesterday by Derek Mackay does deliver a real-terms increase in both revenue and capital funding to local councils – that’s before we take account of councils’ own ability to raise revenue through the council tax.

“Yes, that includes funding that the Scottish Government has made available to increase childcare – £210m in revenue for childcare. It includes a transfer from health to help fund social care. These are all important priorities and it’s absolutely right that the Scottish Government and local councils work together to ensure the delivery of these priorities.”

She added: “I’m going to make the same offer to Patrick Harvie as I made to [Labour leader] Richard Leonard. We have allocated all of the resources at our disposal in this budget.

“I would like to do more for local government, for health, in a whole range of different areas. But if opposition parties want extra spending in some areas of the budget, then there is a duty to say in what areas they think that money should come from. We are happy to have those constructive discussions. They have to be hard-headed discussions because we can’t create money out of nowhere.”

Mr Harvie said national policies should be funded from national resources, not from a “raid on council budgets”.

It has also emerged that increased income tax revenue will generate an extra £182m once funding reductions from the UK government are offset.