Thursday, 8 January 2009

Local government feels the Gnats' bite

Right, time to get back to blogging after two weeks away over Christmas and New Year, and then being struck down by a cold on my return (sniff, cough).

The Herald today splashed on the fact that local councils in Scotland face severe financial pressures as they prepare to set their budgets for the coming year. That shouldn't really surprise anyone, as a combination of a council tax freeze, reduced revenues as a result of the recession, the increased expenditure that recessions also bring and finally the requirement from the Gnat government for a total of £500m in 'savings' from local government all make this a very tight year for local budgets.

And let's be clear about this: the bulk of that £500m sum will be cuts in actual services. While there is always some room for cutting wasteful spending, anyone who knows anything about local government will be aware that there is not a great deal of fat to be trimmed. For local government to find the scale of the cuts demanded by the Gnats and to keep the council tax frozen, there will have to be either reductions in frontline services or significantly increased charges for services (or both).

Of course, this is nothing new for local government under the Gnats: the same thing happened last year. But what is different this year is that the Gnats aren't applying their own logic on a Scotland-wide level. Although local government is expected to make cuts of £500m - which can only be achieved through cutting services - the Gnats are refusing to contemplate any reduction in expenditure on a national level in order to fund cuts in income tax, to help people struggling during the financial crisis, as the Scottish Lib Dems have called for.

Of course, such tax cuts will require tough decisions on spending to be achieved. But it shouldn't be too difficult. Maybe the Office of the First Minister could do without the additional £13m that Salmond's proposing for it. And perhaps the Scottish Government could do without the additional £7.2m it's proposing to spend on administration. Given that the Gnats are proposing to end prison sentences of less than six months, perhaps the budget of the Scottish Prison Service might not need the additional £13.4m that is being suggested. Are tax cuts really less of a priority than an additional £3.5m in total for Forest Enterprise Scotland and Forestry Commission Scotland? (All figures from the Scottish Government's draft budget).

Although all these sums soon add up, obviously decisions also need to be made about major areas of expenditure. The Gnats are proposing additional expenditure on motorways and trunk roads (while at the same time cutting spending on rail and bus transport - so much for sustainable transport!). Perhaps some of that extra £134m could go towards tax cuts instead?

But ultimately, such a commitment towards taking tough decisions on spending can't really be expected from this Gnat government. As shown by the farce over the new Forth Bridge funding proposals, the Gnats don't really do responsibility or prioritising. Anyone could have told them that in the current financial climate the Treasury weren't going to support that 'front-loading' proposal and that the Scottish Government would be told to decide what their priorities really were.

And that lack of responsibility means that local government is being forced to cut its services, while the Scottish Government refuses to do likewise.


Anonymous said...

Followed the link from scottish round-up

CIPFA e-mail circular today quotes Audit Commission in England as saying LA's are all OK

Are ours in the north a lot worse off ?

Bernard Salmon said...

In England, they don't have a government committed to freezing the council tax and nor are councils being expected to find 'savings' (for which read cuts) of £500m.

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