John McLellan: Mackay must find a Scottish money tap

As Edinburgh Council's administration takes the begging bowl up to Scottish Finance Secretary Derek Mackay in a bid to stave off the latest round of hefty local government cuts, have we heard any cheers for the £866 million boost for Scotland in UK Chancellor Philip Hammond's Budget this week?

Thursday, 1st November 2018, 6:00 am
Finance Secretary will present his Budget next month. Picture:  Andrew Cowan/Scottish Parliament
Finance Secretary will present his Budget next month. Picture: Andrew Cowan/Scottish Parliament

That would be too much to ask, especially as the council’s SNP leadership has been desperate to deflect any blame for the reduction in spending on council services away from their colleagues in St Andrews House and towards the UK Treasury.

Not only is Edinburgh Council currently wrestling with the challenge of finding £106m of savings in the next four years to keep its budgets balanced, it is also struggling with the failure to deliver all the savings it promised in the previous year on top of the £28m it needs to find in the coming year alone, so the problems are stacking up.

Although nothing has been confirmed, we already know the council is considering slashing headteachers’ budgets, less money for waste collection and road repairs, stopping emergency tenement repairs and ending free electricity in common stairs.

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Everything rests on the Scottish Budget to be revealed on December 12 and we can only hope council leader Adam McVey is making strong representations to Mr Mackay, with whom he is said to have a positive relationship. But for now we have to settle with his administration asking the general public for advice through a consultation with a month to run.

The consultation comes with a bright and colourful handbook to help explain the jigsaw puzzle which is council finance, the foreword to which reads: “Our income from taxation and our funding from Scottish Government, which has been impacted by Westminster policies, is not sufficient to deal with the pressures from rising demand on Council services.”

So it’s all Westminster’s fault? Because the SNP is in charge at the City Chambers it fails to point out the impact on council services from the decisions made by the SNP at Holyrood is greater than those of Westminster.

Don’t take my word for it; in May the Scottish Parliament’s Information Service reported the Scottish Government had cut council grants by £744m in the previous five years, a 7.1 per cent reduction, compared to a fall in its own revenue budget of £547m, just 1.8 per cent, in the same period.

Audit Scotland also pointed out this year that the Scottish Government has cut council budgets by 9.6 per cent in real terms since 2010, which Mr Mackay said was all Westminster’s doing. It was the same story this week, with Mr Mackay claiming the Scottish budget would be 
£2 billion lower in real terms by 2020 than it had been ten years previously, as if Scotland should somehow have been immune from the effect of the global crash which wasn’t fully felt until 2011.

Yet the UK Budget’s 2.8 per cent cash terms increase in the Scottish block grant gives Mr Mackay an extra £866m more to play with, a 1.25 per cent real terms increase of £381m. So will the council’s budget consultation document be updated to say the impact of Westminster policies is to give the Scottish Government more money to spend?

Not in what is essentially a political document, but what should be expected is the opening of the public spending tap in Westminster being replicated at Holyrood.

And we should also expect Cllr McVey to put his access to Mr Mackay to good use to deliver a far better deal for Edinburgh from the Scottish Government than in previous years. Last year at the last minute Mr Mackay reined back from an expected 3 per cent cut and Edinburgh’s reduction was £25m less than planned.

If he did it last year, he can certainly do it next month.