Gordon Munro: Blame Holyrood, not Westminster, for budget woes

The Scottish Government has cut funding to local government by 3.7 per cent from 2010/11 to 2017/18. Picture: John Devlin
The Scottish Government has cut funding to local government by 3.7 per cent from 2010/11 to 2017/18. Picture: John Devlin
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Edinburgh is done no favours by those seeking to portray Westminster as the source of Edinburgh’s budget problems faced by the council. This contradicts the facts.

The fact is that the SNP Scottish Government had a Revenue cash increase of 2.2 per cent ; a capital cash increase of 10.3 per cent; plus additional borrowing power of £450 million. Despite this increase the SNP Scottish Government chose to cut funding to local government in Scotland by £350m. A cut made less savage through an intervention by the Greens but a cut none the less. This meant that Edinburgh received the lowest grant settlement since devolution from the Scottish Government. This is part of a long-term approach by the Scottish Government which has cut funding to local government by 3.7 per cent from 2010/11 to 2017/18 taking a whopping £1 billion from councils in Scotland. To blame Westminster for this decision made in Scotland is disingenuous but is also a disservice to the city we serve . We need “robust representations” made to Holyrood, not platitudes that will please the party faithful.

Councillor Gordon Munro is a Labour councillor for Leith. Picture: Neil Hanna

Councillor Gordon Munro is a Labour councillor for Leith. Picture: Neil Hanna

Edinburgh’s Revenue budget of £967.9m for 2017/18 is comprised of three main sources: general revenue funding of £346.5m; non-domestic rates of £355.1m; and council tax of £266.3m. The Scottish Government, not Westminster, determines the general revenue funding and non-domestic rates funding. Until this year council tax had been frozen for tenlong years by the Scottish Government as a condition of grant with penalties threatened on any council bold enough to attempt to raise funds through this source. This meant that Holyrood, not Westminster, controlled all three main sources of council funding till this year.

This control has seen the council budget and its workforce reduce drastically. In a recent communique to all staff the chief executive pointed out that in the last five years alone Edinburgh had made cuts of £240m. It has reduced its workforce from 15,589 in 2011 to 14,143 in December 2016 . To date the policy of no compulsory redundancy has been adhered to, but for how long given the funding situation outlined in the budget consultation .

The wider context of funding for Edinburgh also needs to be taken into account. The Scottish Government has chosen the context of one year only for the budget despite the long-term context. Audit Scotland have helpfully provided that context in their report in their audit of Edinburgh for 2016/17. They comment that Edinburgh needs to make further cuts of £142m and should expect a reduction in grant revenue funding of £59m up to 2020-21. This is on top of the cuts of £240m already made. This is despite the demographic and service pressures faced as Edinburgh grows in size and its population ages. Factoring in demographics, wage rises, City Deal and other factors takes this figure of £142m to as much as £204m by 2022/23 .

So what can be done? Westminster will announce the block grant for Scotland in November. A reduction in this will inevitably mean even deeper cuts from Holyrood A standstill grant means a case can be made for a standstill grant to Edinburgh. An increase in the block grant means a case can be made for an increase in grant to Edinburgh .

The second main source of funding for Edinburgh is non-Ddomestic rates . Holyrood has direct control of this and can make decisions which help bring more funds or take away funds from Edinburgh. It is, however, their choice .

The third main source is Council Tax. Despite a promise made by the SNP in 2007, no action has been taken on this source of funding. This means that in Edinburgh council tax banding starts at properties in this city below the value of £27,000. Believe it or not there are 23,667 properties in Edinburgh in this band. Raising tax on property values set on April 1, 1991 – last century – especially in a city where the average house price is £246,000 is a nonsense. This was recognised by the Scottish Government which working with Cosla commissioned a report published in December 2015. It concluded that “the present council tax system must end” and entrusted that its report would be taken forward in the form of primary legislation being enacted. This is still to happen. Incredibly, though, the Parliament did find time in its busy schedule of legislature for a bill to dock puppy dogs tails. Both choices made in Holyrood, not Westminster, and both choices a dereliction of duty by Holyrood.

Edinburgh is not alone in facing a crisis in local government funding. The cuts are being made all over in Scotland but with its own legislature powers and the report from 2015 it has the ability to change funding for public services for Scotland, not just for Edinburgh. In the meantime Edinburgh needs to make the “robust representations” talked about by its leader in this newspaper. Both he and the deputy leader of the council together should be making these representations and working with Cosla for implementation of the Commission Report .Citizens can play their part too by responding to the consultation demanding a change in council funding that changes the choice from “what cuts should we make” to one that has real funding choices.

Councillor Gordon Munro is a Labour councillor for Leith Ward