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22/02/14 09:30

Funding for local government

Swinney sets out transparent funding options in light of COSLA stance.

Finance Secretary John Swinney has written to the Convention of Scottish Local Authorities (COSLA) asking for confirmation that they wish the Scottish Government not to uprate needs-based indicators when allocating funding for individual local authorities in 2015-16.

Earlier this month, the Scottish Parliament approved over £10.6 billion of funding to deliver local services across Scotland, with extra support for students and businesses. The 2015-16 local government finance settlement represents flat cash with extra money for new responsibilities.

COSLA Leaders had previously taken the view that the needs-based indicators should not be uprated and that all 32 councils should receive the same share of funding in 2015-16 as they will receive in 2014-15 – meaning the latest figures on populations and deprivation would not be applied.

Having considered COSLA’s request and respecting the partnership with local authorities Mr Swinney is minded to accept the COSLA Leaders’ majority decision not to uprate the needs-based indicators and allocate funding on the same shares as in 2014-15.

Mr Swinney said:

“I have written to COSLA asking them to confirm that they do not wish to uprate the funding formula for 2015-16.

“I am respectful of the relationship we have with local government and of their internal decision-making, and for those reasons I am minded to accept the proposal from COSLA that they do not wish the government to uprate the funding formula for 2015-16.

“However I also want this decision to be made with the utmost transparency. The view COSLA has expressed will have funding implications for councils around the country. I have set out to all local authorities the two different scenarios to ensure that the full facts are available and that informed decisions are taken.

“I have now written to COSLA to provide them with the two different funding scenarios for local councils – one based on uprating the needs-based indictors and one based on COSLA’s approach to stick with 2014-15 rates.

“The figures I am publishing today allow each local authority to see an estimate of the funding that will be available if the view of COSLA is confirmed, and the funding that would have been available if the needs-based assessment is applied.

“My preference will always be to have a fair and equitable settlement for all councils that is based on local needs and gives the maximum opportunity to deliver strong local services for local people. I will continue to work closely with COSLA to ensure that is achieved.”

The local government settlement includes resources for councils to continue the council tax freeze to help families in tough economic times; to maintain teacher numbers in line with pupil numbers and secure places for all probationers under the teacher induction scheme.

Notes to editors

Mr Swinney’s letter to Councillor David O’Neill, President of COSLA, including the two funding scenarios, is below for information.

21 February, 2014

Further to my letter of 7 November, I am writing to provide you with an update on my consideration of the distribution of the local government finance settlement allocations for 2015-16.

I have noted and reflected on the COSLA Leaders' view not to endorse the recommendation of the joint Settlement and Distribution Group that all needs-based indicators for the 2015-16 settlement should be uprated and instead pass a motion to roll forward the 2014-15 settlement to 2015-16 at an individual council level.

I can confirm that after careful consideration, and in line with the importance and commitment I attach to our joint partnership working, I am minded to accept the view COSLA Leaders' have expressed not to uprate the needs based indicators for the 2015-16 settlement.

However, while I fully recognise the right of COSLA Leaders to take the view they have, I am also conscious that in so doing so they were not in possession of the detail of what that would mean for councils' allocations. In the interests of transparency, as this is a departure from the normal agreed practice and changes the distribution, the attached tables set out the detail under the two scenarios of what the revenue and capital allocations would have been had the needs based indicators been uprated alongside the allocations councils will receive following COSLA Leaders' view not to uprate the indicators.

In line with standard practice, both sets of figures are necessarily provisional and still to be subject to the normal thorough checking procedures so any redistribution to address any agreed discrepancies will be undertaken within the total settlement allocation and not through the provision of any additional resources provided by the Scottish Government.

I would be grateful for confirmation, in light of this further detail on the funding implications this will have for councils around the country that COSLA Leaders' view remains not to uprate needs-based indicators when allocating funding for individual local authorities in 2015-16.

I am copying this letter to all Council Leaders and have also placed a copy in the Scottish Parliament Information Centre.

JOHN SWINNEY

COSLA is the representative body for all 32 councils and their majority decision is for a flat cash settlement for all 32 councils with extra money for new responsibilities.

The provisional allocations have been announced to give councils confirmation for their budget planning purposes of what they are likely to receive in 2015-16.

More information on the local government settlement is available at: http://news.scotland.gov.uk/News/Council-funding-backed-by-Parliament-vote-905.aspx

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Local government finance settlement 2015-16

Local government finance settlement 2015-16

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