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Native Scottish Councils are liable to chapter if funding from the Scottish authorities shouldn’t be improved, council leaders have stated.
Cosla issued the warning in a briefing paper forward of the Scottish finances on 19 December.
The native authorities physique stated Native Scottish councils want practically £14.4bn within the finances simply to “stand nonetheless”.
The Scottish authorities stated it had given councils a real-terms improve of £376m, or 3%, this 12 months.
Cosla’s feedback got here after Birmingham and Nottingham metropolis councils successfully declared themselves bankrupt.
Each authorities have issued Part 114 notices, which forestall spending on just about every part aside from statutory companies.
In its briefing paper, Cosla said: “There’s a danger this turns into the truth for Scottish councils if the funding by Scottish authorities doesn’t match rising price pressures.”
A council tax freeze was introduced by First Minister Humza Yousaf in October.
No particulars have emerged on how a lot cash councils will obtain to compensate for this.
The Scottish authorities insisted the coverage could be totally funded.
‘Difficult finances’ for Native Scottish councils
Cosla sources spokeswoman Katie Hagmann stated that “robust decisions” may imply important companies they supply “will stop”.
She added: “Our actuality proper now’s a particularly difficult monetary local weather coupled with years of real-terms cuts to council budgets, whereas further coverage commitments are regularly being launched.
She stated Cosla had been “clear that reducing frontline workers isn’t the reply” and with out funding councils wouldn’t have the ability to present “sustainable public companies”.
Scottish Conservative finance spokesperson, Liz Smith MSP, stated Cosla’s warning was a “damning indictment on years of brutal SNP cuts”.
She added “Scotland’s native authorities have been struggling to offer core companies for years now and it seems they could lastly be nearing breaking level.”
The Scottish authorities stated it was dealing with “essentially the most difficult finances settlement since devolution” because of excessive inflation and a UK authorities autumn assertion that “didn’t ship the funding wanted” in Scotland.
A spokesperson stated: “The Scottish Authorities has elevated the sources accessible to native authorities in 2023-24 by greater than £793m, a real-terms improve of £376m or 3%, in comparison with the 2022-23 Price range figures.
“Choices on native Scottish councils finances allocations for future years are topic to the end result of negotiations with Cosla, the outcomes of which will likely be confirmed in future Scottish budgets.”
The authorized responsibility of Native Scottish councils
Native Scottish councils are underneath a authorized responsibility to supply a balanced finances annually.
As such, they can not go bankrupt within the true sense.
If mandatory they’ll use their money reserves to supply balanced budgets though the reserves of some councils are getting low.
However what would occur if a council didn’t agree a finances? Maybe as a result of the choices for balancing the books have been too controversial?
Prior to now councils have warned this was a risk.
Had been a council to fail to supply a finances, its duties might be taken over by Scottish authorities civil servants.
Native Scottish Councils are nonetheless ready to listen to how a lot cash they are going to get from Holyrood to fund subsequent 12 months’s council tax freeze.
Inflation and power payments have added to their monetary challenges.
The opposite main query is whether or not councils will really go forward with proposals for controversial cuts in companies – comparable to Stirling’s proposal to shut all however one among its libraries.
Two months in the past North Lanarkshire deserted plans to shut many libraries and leisure centres after an area outcry.
However whereas sure cuts might show politically unacceptable, the necessity to produce balanced budgets stays.
Had been civil servants to take over accountability, the expectation could be that they might be extra prone to take the unpalatable selections which councillors might discover politically not possible.
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