Feature: Moray is not alone in making difficult choices

Talking Numbers – our columnist Tim Eagle looks at the enormous task facing Moray Council – and every local authority in Scotland. He attempts to put some sense into the debate and explain why we are where we are…..

How did we get to the stage of savage cuts?

LET’S TALK NUMBERS for a second – If I said 13 you might think of a baker’s dozen, if I said 10 you might think of Downing street, If I said £14million you may think about the amount Moray council are looking to save in the next year.

Moray Council are currently having discussions about the budget, the results of which we will all have a clearer picture on after their crunch meeting tomorrow. However, we could probably guess that the talks will be tense, after all Moray Council needs to save a lot!

Is Moray Council alone in this steep task though? They are not alone in having to make savings, every council is the same. SNP-led councils Angus and Dundee need to save £12.5million and £15million respectively, while Labour-led councils need to save £20million in Falkirk and £14.5million in Inverclyde. So, if any political party tries to blame the other for the big gaps in council budgets then it is not true.

But why is this the case then? Why now are all Councils facing such drastic gaps in the budget?

It all comes down to allocations of funding. Councils get their funding in a variety of ways – typically Council Tax raises only around 11% (15% in Moray) of the total funds. Local councils can further raise up to 25% (Only 6% in Moray) through service income and around 6% from housing.

The bulk of the funding, nearly 60% (79% in Moray), is from the Scottish Government. This is supplied through general grants, non-domestic rates (NDR) which are taxes on business properties and capital grants. Of course the amount each council receives from any of the above greatly depends on its location and size.

The Scottish Government has not raised council tax since 2007 which, while providing only around 11% of the council budget, is one way that local councils can increase revenue. Local councils have the power to raise council tax as they wish – it is actually not in the hands of the Scottish Government.

However, given the large part of the funding that is provided from Scottish Government they can twist the arm of the council so to speak if there is a manifesto pledge to stop council tax rises [as happened a year ago when Moray tried to raise the Council Tax by as much as 18%].

According to Audit Scotland “councils’ revenue funding from the Scottish Government will reduce by 5% in 2016/17”. This means that in real terms the revenue funding since 2010/11 is down 11%, despite the government having added £70million to the pot every year to cover the council tax freeze.

That might be OK if it was not for the huge increase in costs associated with service delivery, such as social care, education, housing, and winter maintenance. On top of this is the fact that policy decisions by central government greatly reduce the flexibility of local councils to allocate the money available, for example having to maintain teacher numbers and social care budgets – so the money the councils do get is for a large part allocated for them.

Difficult choices here are shared around the country.

Most councils have already made easier savings. Moray have saved £24million in the past few years including reducing their workforce, while many councils are planning further reductions in staff.

Staff can be a big cost and whilst it is true that some employees get high salaries it is only those who hold an incredible amount of responsibility. In Moray Councils’ 2016 accounts only four are mentioned by name, although 18 staff members are paid over £70,000.

Whilst cutting staff saves money, Audit Scotland point out that they “need to ensure they have people with the knowledge, skills and time to design, develop and deliver effective services in the future” – so it is not as simple as cutting staff.

Running a council is a complicated business. There are few companies with a portfolio of services they need to deliver which is so vast.

This leaves councils like Moray with a problem going forward, where do they make more cuts?

That will be one of the big questions in the upcoming elections, each [political] side will have their own viewpoint on that but what is important is the realisation that all councils are in the same boat. Local services are vitally important to local people as it affects us more than most national policy decisions.

Councils must do all they can to limit their statutory burdens and protect the services which effects the lives of local people – even if that does mean a fundamental rethink of their service delivery model.

Given recent press about revisiting the school estate in Moray and closing leisure facilities, now more than ever is it important to challenge central government to fund our councils better and reduce their growing burdens.

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