‘Perilous’ state of Council finances a ‘huge concern’

The ‘perilous’ state of Moray Council financial situation remained at the centre of attention both locally and nationally yesterday.

The matter was raised in Parliament by Highlands & Islands MSP John Finnie (Scottish Greens), asking: “The First Minister will be aware of the perilous financial state of Moray Council. Clearly, the Scottish Government has a role to play here, so will she outline the steps that will be taken to ensure that my constituents enjoy essential council services?”

Reflecting the current state of budget negotiations, First Minister Nicola Sturgeon replied: “Obviously Moray Council is responsible for the decisions that it takes, but with the combination of the draft budget resources that are being provided and, indeed, its own potential with regard to council tax, it will have £4.3 million more in revenue funding in the coming year than it had in the previous financial year. However […] these are difficult financial times, and I understand the pressures that local councils, including Moray, are operating under.

“As I have said many times in the chamber, we have sought in the draft budget to protect local government as far as we can within the resources that are available to us. We are approaching the next stages of consideration of the budget, and we remain open. I know that discussions have been had with others about whether there are other areas of the budget that we can redirect money from to help councils further, but as I have said before—and it is simply a statement of fact—we have no unallocated money. If we are going to increase the money to local authorities, that money has to come from somewhere else in the budget. I am sure that these discussions will continue over the next couple of weeks.”

Commenting after the Parliamentary session, Mr Finnie added: “My constituents in Moray are hugely concerned about the perilous financial state of the council’s finances. Cuts will have a detrimental impact on the local services that people rely on. Greens have been clear that protecting council services is a priority for us in budget negotiations, and while we are of course happy to engage in a constructive manner, these proposed cuts must be taken off the table.”

Meantime, Conservative MSP for Highlands & Island Jamie Halcro Johnston has used Freedom of Information legislation to ask for records of meetings and communication between Moray Council and the Scottish Government, after accusing the SNP administration on Moray council, and the local MSP, of failing to stand up for Moray.

“Moray Council is in an untenable position, being expected to lump further cuts on top of millions of pounds of savings that are already in the pipeline,” he said.

“The SNP administration should be standing up for Moray and representing local people’s interests to the Scottish Government ahead of the council’s budget being finalised. And they should be able to count on the support of their SNP MSP to help them make their case.”

As reported by insideMORAY yesterday, Council Leader Cllr Graham Leadbitter wrote to Derek Mackay, Cabinet Secretary for Finance, Economy & Fair Work at the Scottish Government earlier this month to ask for more money for Moray and more flexibility in how Councils can allocate their budgets.

In his letter, Cllr Leadbitter writes: “I am writing to set out my concerns over the proposed grant settlement for Moray Council.

“The settlement, as proposed, poses significant challenges for us. At the time of writing this response Moray Council has already approved budget savings totalling £6.4M at meeting of the Council on 18 December. Against a total budget of around £200M this is obviously a significant saving that has already been achieved.

“Having now digested the letter from you to the COSLA President dated 12 December and the subsequent detail in Local Government Finance Circular No. 8/2018 setting out the proposed Local Government Settlement for 2019/20, our Chief Financial Officer’s advice is that there remains a funding gap of £8.1M which requires to be addressed at our budget meeting in late February.

“In total this equates to £14.5M of efficiencies, savings and service cuts being made in a single financial year, nearly 10% of the value of our total revenue grant.

“For a comparatively small council this is a huge financial pressure and the level of savings required will unquestionably result in major service cuts.

“We recognise the Scottish Government’s commitment to Early Years Expansion and the funding that is supporting that, however the underlying core revenue budget for Moray Council is of very significant concern.

“While we continue to invest in education in support of the early years expansion commitments, the impact on other services will be very significant and very obvious to our communities.

“We recognise that the UK Government’s grant to Scotland is extremely challenging and that continuing austerity makes your own choices as difficult, however I believe it is incumbent upon me as Leader of Moray Council to express my grave concern that unless the Local Government share of spending improves, then valued public services, including library and leisure facilities, could be lost. In a region that has dispersed rural communities this is a particularly challenging situation.

“In that vein I would urge that the priority given to local government spending is reviewed. If we lose preventative services at Local Government level that will simply add to pressures in the health sector that could otherwise be avoided and could set back the prevention agenda.

“I would also urge that every conceivable area of local government finance continues to be explored with a view to maximising the flexibility of our funding.

“In relation to Moray’s proposed settlement I would once again restate my view that for a Council having such a significant budget pressure, combined with a significantly lower than average budget per head of population, to have a further near £2M reduction as a result of the floor calculation is utterly perverse and cannot be the purpose of the floor mechanism.

“Some improvements in the floor formula have occurred this year but the impact is still more than 1 percent of our total grant, which remains a very significant figure.

“The floor formula must continue to be reviewed to reduce this impact, which I believe is discriminatory to the people and communities of Moray. I fully recognise that this is a joint arrangement with COSLA and I will continue to push this issue through COSLA as well.

“In addition the funding formula agreed with COSLA continues to have a disproportionately negative impact on Moray. I fully accept that this is an issue that needs to be pursued through COSLA and I am pro-actively doing that, however it would be useful if the Scottish Government’s officials who are working with COSLA on the formula could carry out some assessment of the impact of the formula on areas like Moray to help inform debate on the formula.

“In relation to the current budget period I would also urge you to resist calls from others in the Scottish Parliament to cut public spending and give tax cuts to the most wealthy, which would clearly further damage the financial sustainability of public services in Moray and elsewhere in Scotland.”

Further details about the Council budget proposals can be seen at http://www.moray.gov.uk/moray_standard/page_119975.html