Councils raid their rainy day reserves by £157m to deal with ‘cutbacks’

Scottish councils were forced to raid £157 million from their reserves to fund day-to-day spending last year, according to new figures.

The statistics from the Scottish Government revealed that local authorities’ savings fell by 9.7 per cent last year – and they are predicted to fall by another 6.9 per cent by March 2020.

The figures come just months after the Accounts Commission warned councils had to make fundamental changes to how they delivered and funded services in an uncertain financial environment. It also said an increase in funding being “tied to Scottish Government priorities” gave councils “less flexibility in where to spend and where to save”.

Yesterday opposition parties said the raid on the reserves was the result of a financial crisis imposed by the Scottish Government.

Scottish Conservative local government spokesman Alexander Stewart said: “The SNP has cut council budgets to the bone, and now local authorities are having to sell the family silver to compensate.

“It’s a complete disgrace that councils are having to raid their well-earned savings just because this SNP government won’t fund them properly. The nationalists seem to think they can scrimp on local government funding, and that hardpressed council tax payers will pick up the slack.

“Local government is entirely devolved to the SNP, and has been for more than a decade. The fact we’ve reached this stage is entirely the SNP’S fault.”

Scottish Labour’s local government spokesperson Alex Rowley added: “Scotland’s councils are fast running out of money to provide lifeline local services after successive real terms cuts to their budgets by the SNP. These reserves are meant to be there for emergencies, now they are being used just to keep the lights on. Local government is in crisis but it is clear that SNP ministers simply do not care.

“It’s time for the government to listen to councils, listen to Labour and listen to the public by ending the austerity they have imposed on local government.”

And a Cosla spokesperson said: “The use of reserves is rightly a matter for local determination by individual councils based on local need and circumstance. However reductions in the overall pot of funding coming to local government for our essential services are forcing councils to reassess their use of reserves and make often uncomfortable decisions.”

Council funding has dominated recent Scottish budget debates at Holyrood with opposition parties claiming a real-terms reduction in the core revenue grant, while ministers saying the overall package had gone up. The Accounts Commission has reported funding “increased slightly” between 2018-19 and 2019-20, but set this against a longer-term reduction of 6 per cent in total revenue funding since 2013-14.

However a Scottish Government spokesperson said council reserves at March still stood at £1.5bn, and added: “We are delivering a funding package of £11.2bn for all local authorities in 2019-20 – a real terms increase of £310 million for essential public services in Scotland.

“Local authorities must use the financial resources available as efficiently as possible to ensure the best possible value. How this is done is a matter for each council.”