Scotland’s councils facing ‘increasingly difficult choices’ on spending

Councils across Scotland are facing “increasingly difficult choices” on spending, the Accounts Commission has warned.

The Commission, the independent body which holds councils to account, said local authorities were now entering the “most difficult budget-setting context seen for many years”.

It said that even with additional Covid-19 funding during 2021-22, councils had to make significant savings last year to balance their budgets. Many councils have also used reserves to bridge funding gaps and fund vital services. This is expected to be the case for 2022/23.

The Commission said the additional £570m for councils which was announced by the Scottish Government in the December Budget would help address upcoming costs, but added that further change and reform was needed to “ensure longer-term financial sustainability”.

William Moyes, chair of the Accounts Commission said: “It’s clear the financial situation of councils is increasingly fragile. Councils are having to deal with the effects of inflation, the increasingly desperate cost of living impacts and rising demand for services, whilst at the same time delivering vital day to day services to their communities.  

“To be financially sustainable, councils must deliver savings and reduce reliance on non-recurring reserves to fill budget gaps. If they are to find a safe path through the difficult times ahead, councils need to focus more on service reform, alongside meaningful engagement with their communities, about what services can be provided given the financial pressures they are facing.”