Watchdog warns Scottish councils face worst-ever challenges

Scotland's councils "have never faced such acute challenges", according to a public spending watchdog.

The Accounts Commission has said reform is "increasingly urgent" and both budgets and workforce are "under severe stretch and strain".

In a new report, it claims councils and their partners "must significantly increase the pace and scale" of transformation in order to protect the services their communities rely on.

The delivery of commitments made in 2023's Verity House Agreement, which set out terms for a "stronger partnership" between the Scottish Government and town halls, will help provide that protection, it is claimed.

Jennifer Henderson of the Accounts Commission said: "Local government has been transforming how they deliver services for years. But given growing demand and ongoing financial pressures, councils must now move with an ambition and pace we've not yet seen if they're going to successfully address the financial sustainability, workforce and service challenges they're facing."

The watchdog said it realises the "challenging situation councils and their public and third sector partners face". 

It has called for "significant progress" to be made over the next 12 months on agreeing a future operating model for councils and their services.

Councils body Cosla and the Scottish Government are to make "sustained progress" on agreeing a fiscal framework, measures for accountability and assurance and completing the Local Governance Review over that timescale.

Individual authorities must move on their own local transformation work and there must be more clarity on timescales, costs and other aspects of the Transformation Programme being pursued by the Society of Local Authority Chief Executives (Solace) and the Improvement Service, the report said.

Henderson commented: "To protect vital services, to pivot to prevention and increase the pace of collaboration, councils must commit to and sustain their own transformation programmes, whilst collaborating with sector-led work.

"Successful delivery of transformation programmes is essential to achieve financial sustainability and improve the lives of individuals and communities. Collaborating with others, both within and outwith local government, will be a key part of the solution."

Mark Griffin, Labour's local government spokesperson commented: "This stark report lays bare the huge pressure councils across Scotland are under.

"For years the SNP has hollowed out council budgets and lifeline services across the country have been cut to the bone as a result. We need real leadership from the Scottish Government to help councils deliver the reforms needed to make sure local services are fit for the future. The SNP must stop inflicting brutal cuts on local government and instead support councils in reforming and modernising these vital services."

Lib Dem economy spokesperson Willie Rennie said: "The SNP have taken deliberate decisions to starve Scotland's councils, sometimes as a budget gambit, sometimes as a stunt and sometimes because their own bad decisions have left them short of funds.

"Humza Yousaf committing to a council tax freeze on a whim so that he had something to announce at SNP conference was the absolute nadir of this approach.

"Local government deserves respect, long term funding deals and a commitment from the Scottish Government to work in partnership."

Responding to the report, Shona Robison, Cabinet Secretary for Finance and Local Government, said: "The report from the Accounts Commission recognises collaboration and transformation is vital to protect public services. This aligns with this government’s core priorities of ensuring the delivery of effective public services, eradicating child poverty, growing the economy, and prioritising net zero.

"Despite the decision of the previous UK Government leaving the country in a challenging financial situation, the Scottish Government has made available record funding of over £14bn to local councils this year – a real-terms increase of 2.5 per cent compared with the previous year. We will also continue to work with Cosla to empower councils through a new fiscal framework."