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Scottish councils facing ‘real risks’ as cuts loom

SCOTTISH councils face “real risks” amid a yawning budget gap, the Accounts Commission said today.

The local government spending watchdog says town halls must find £725 million in cuts and efficiencies for the next finanicial year to balance the books, almost double the £476m figure from 2023-24.

Despite warnings from the Local Government Information Unit in December that up to a quarter of Scottish councils could face “effective bankruptcy” — as seen in Birmingham and Middlesbrough — the commission said auditors had not found evidence any were “financially unsustainable in the short term.”

However, it warned: “The financial outlook is extremely challenging, with Scottish councils facing unprecedented financial and service demand pressures which present real risks for the future.”

Its report said councils would need to “continue to innovate at pace and make difficult decisions to become more financially sustainable” and called for “effective consultation to counter the ongoing significant resistance” to cuts.

The Convention of Scottish Local Authorities (Cosla) resources spokeswoman, councillor Katie Hagmann, welcomed the report, commenting: “Today’s Accounts Commission bulletin is a true reflection of where we are now.

“Our reality right now is extremely challenging — years of real-terms cuts to council budgets have been coupled with increasing additional policy commitments and increased ring-fencing.

“With so much funding still directed, the ability to take local decisions on most of our budget is almost impossible.”

A spokesman for the Scottish government said: “The Scottish government recognises the financial challenges that the entire public sector are facing and that local authorities and their employees play a pivotal role in our communities.

“In the face of a profoundly challenging financial situation, we are making available record funding of over £14 billion to councils — a real-terms increase of 4.3 per cent compared with the 2023-24 budget.”

 

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