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Almost all of Scotland’s councils dip into cash reserves over year

Cosla said local authorities had to make ‘uncomfortable decisions’ in 2018-19.

All but three of Scotland’s councils needed to use reserve funds to help pay for day-to day services. (Edinburgh City Council/PA)
All but three of Scotland’s councils needed to use reserve funds to help pay for day-to day services. (Edinburgh City Council/PA)

All but three of Scotland’s councils had to rely on cash reserves to cover day-to-day running costs last year.

In 2018-19, a total of 29 out of the 32 local authorities used reserve funds to help with expenditure, according to Scottish Government statistics.

Of the £1.136 billion cash councils had saved away on April 1 2018, authorities used £157 million.

Meanwhile, £47 million was transferred into the reserve fund from other areas, leaving a closing balance of £1.026 billion at the start of April 2019.

This year, 22 councils say they plan to use reserves to fund day-to-day spending.

In contrast, five authorities plan to increase the amount of cash they have set aside, with the remaining five planning to neither increase or decrease their reserve fund.

Conservative local government spokesman Alexander Stewart said reserves were being used because “the SNP has cut council budgets to the bone and now local authorities are having to sell the family silver to compensate”.

The Tory MSP said: “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.”

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 Spokesman for local government body Cosla

Labour local government spokesman Alex Rowley also voiced his concerns, saying: “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.”

A spokesman for the local government body Cosla 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.”

The latest local government expenditure figures showed council spending is expected to total £12.3 billion in 2018-19 – a rise of 2.4% on the previous year..

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Education Secretary John Swinney. (David Cheskin/PA)

More than two-fifths of spending went on education services, with councils also spending 27% of their overall budget on social work

Spending in these two core areas is expected to increase further this year, with education and social work expected to account for 71% of all council funds in 2019-20.

It is anticipated more than £5.5 billion will go on education in 2019-20, a rise of £398 million on last year.

Education Secretary John Swinney welcomed the 5.6% real-terms increase in spending, saying: “Much of the increase is driven by councils expanding their early learning and childcare offer to families as we look to nearly double entitlement to 1,140 hours a year from next August.

“With higher spending in both primary and secondary schools and the share of local authority spending on education rising, councils are demonstrating a strong commitment to giving every child the best start in life.”

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