Fears for future of all local councils
West Lothian Council’s finance chief has warned of a growing risk to the financial sustainability of all Scottish councils.
Increased funding from the Scottish Government has seen more money ring fenced and is a cut in real terms across the board for all local authorities. West Lothian along with all others lost out on expected receipts from planned council tax rises after the freeze was imposed.
While they have received more cash, Scotland’s finance directors are facing a collective £725m budget gap because of increasing demands.
Despite those pressures no Scots council has yet declared itself bankrupt, as many in England have.
However the pressures which have led to those bankruptcies are as acute for Scottish councils, including West Lothian – surging social care costs and spiralling numbers of homeless applicants needing to be housed.
Increased spending in both these areas has risen by around 30 per cent in the last ten years. The spending on looked after children has also risen by more than 10 per cent in the last decade.
Chairing a meeting of the council’s Audit Committee, Conservative councillor Angela Doran-Timson asked:“Is there a real risk to the financial sustainability of Scottish councils in the medium or long term?”
Finance director Patrick Welsh, who delivered his report on financial risks responded:“We’ve seen the situation down in England in terms of a number of local authorities entering into bankruptcy.
“This report does set out really significant challenges and as we know the position is continuing to remain extremely challenging – funding levels, economic indicators, public spending indicators going forward are all suggesting real term reductions to local government funding on an ongoing basis.”