Scottish councils could face a combined funding gap of £553 million by 2018, according to a new report from the Accounts Commission.
The Commission has said that based on figures from 2015/16, local authorities are currently in good financial health but have found that there could be “significant challenges” in the future.
Councillor Kevin Keenan, finance spokesperson for the Convention of Scottish Local Authorities (COSLA), today praised the financial performance of councils across the country:
“As today’s report recognises, yet again councils have remained within their overall budgets, in addition they have increased their reserves ever so slightly and, the icing on the cake if you like, reduced their debt in 2015/16.
“This is all the more incredible when you see the demand on council services as the austerity agenda starts to bite.”
The Commission’s report found that in 2015/16 Scottish Government funding accounted for 57% of the total revenue and capital income for councils; a reduction in real terms of 8.4% since 2010/11.
A spokesperson for the Scottish Government claimed that they had supported local councils throughout the recent years of austerity across the UK:
“Despite the cuts to the Scottish Budget from the UK Government, the Scottish Government has treated local government very fairly.
“This report highlights the pressures that councils – like other parts of the public sector – face, but also highlights that they are continuing to improve services.
“We expect local authorities to continue to use resources as efficiently and effectively as possible to ensure taxpayers get the best possible services and value for money.”
Edinburgh Councillor Alasdair Rankin, who is also convener of the city’s Finance and Resources Committee, said that the council was very aware of the financial challenges ahead.
He added that the council are considering a range of options to ensure they keep the budget balanced while maintaining the standard of services:
“We know we have work to do to meet the challenges of the future. We are looking at all areas. We are looking into the possibly of sharing services with other councils and generally finding ways to effectively co-operate with other councils in the future.”