Calls for greater budget flexibility

COUNCILLORS from all parties and none in Inverclyde have called for greater flexibility over council finances to help reduce the impact of cuts to jobs and services.

Inverclyde Council’s members’ budget working group (MBWG), which is made up of elected representatives from all political parties and independents, made the plea to Scotland’s deputy first minister John Swinney.

In a second letter to Mr Swinney, who is also the stand-in finance secretary, about the local funding pressures, councillors Stephen McCabe, Elizabeth Robertson, Tommy McVey and Graeme Brooks highlighted the £3.8 million shortfall facing the council on top of £6.7m of savings that have already been taken as a result of the Scottish Government’s settlement for local government.

They also called for greater flexibility for local authorities to manage their own finances – something that is currently restrained by ‘ring-fenced’ funding allocated for specific initiatives and projects that councils have no control over.

The elected members also warned that the council could be forced to look at compulsory redundancies because so few staff are seeking voluntary severance.

In the letter, the councillors said: “All we seek is a fair settlement and greater flexibility to manage the resources available to us for the benefit of the people of Inverclyde.”

The full letter is as follows:

Dear John

Thank you for your reply dated 24 January to our letter dated 7 December regarding the impact of the Scottish Government’s funding settlement on the financial sustainability of Inverclyde Council and on the communities it serves.

The four groups represented within the Members’ Budget Working Group have considered your response and believe there are elements within it that need to be challenged.  We also wish to highlight in clear terms the stark choices faced by the Council prior to the finalisation of the Scottish Budget in the coming weeks.

Firstly, we note the various figures quoted in your letter and have sought clarification from our Chief Financial Officer regarding their source.  His advice is that a significant majority of the increases referred to relate to 2022/23 funding rather than funding to meet new pressures in 2023/24.  His detailed analysis aligns with that of COSLA, in that there is £72 million net extra non ring-fenced funding for Local Government to meet new inflationary and other pressures in 2023/24.

In practical terms for Inverclyde this equates to £960,000 unattributed extra grant against which we face estimated inflationary pressures of £3.8million (pay), £4.7 million (non-pay), £1.4 million (income reductions linked to Covid/Cost of living) and £1.2 million (NDR Revaluations), a total of £11.1 million in 2023/24 alone.  This explains why, despite having already approved £6.7 million of savings for 2023/24, the Council faces a remaining funding gap of £3.8million prior to any increase in Council Tax.

The second issue the Members’ Budget Working Group must raise is the contradiction between your statement that “It is the responsibility of individual Councils to manage their own budgets and to allocate the total financial resources available to them on the basis of local needs and priorities”, with the recent announcements by the Scottish Government regarding teacher numbers and pupil/teacher ratios.  This move, allied to the requirements set out in the Local Government draft settlement regarding guaranteed uplifts for IJBs, over £11million in ring fenced grants plus over £20 million in loans charges, means that savings have to be focussed on an increasingly small but extremely important element of the Council’s Budget.

We attach the current savings options from which the remaining funding gap requires to be closed. You will appreciate the real impacts many of these savings will have on our local communities and on the employees who lose their jobs and on their families.  Unlike in previous years, we are not seeing significant numbers of staff seeking voluntary severance.  This means that it is becoming increasingly difficult to make cuts without resorting to compulsory redundancy.

All we seek is a fair settlement and greater flexibility to manage the resources available to us for the benefit of the people of Inverclyde.

Yours sincerely

Councillor Stephen McCabe

Councillor Elizabeth Robertson

Councillor Tommy McVey

Councillor Graeme Brooks