Government accused of ‘ambivalence’ over dire financial situation facing councils tackling Covid-19

The Scottish government’s suggestion that councils could use their reserves to fight Covid-19 – rather than passing on £155 million of extra funding – has been condemned by an isles MSP.

Jamie Halcro Johnston, who represents the Highlands and Islands, said the extra cash should be given to councils in full rather than diverted into the Scottish government’s coffers.

The extra funding has been awarded to devolved governments by the UK government, as part of the Barnett formula, but the Scottish finance secretary Kate Forbes, has yet to confirm it would be passed on in full.

In a debate last week, Ms Forbes said she was consulting with the Convention of Scottish Local Authorities (Cosla) to understand what the full costs are.

In a letter to Cosla, Ms Forbes said she was committed to deploying extra funding in a way that is helpful to local government – but also suggested the use of council reserves.

Mr Halcro Johnston said: “This is a quite remarkable way for the finance secretary to respond to the genuine concerns of Scotland’s councils.

“Kate Forbes is either completely unaware or totally ambivalent to the dire financial situation local authorities across my region face.

“Many have very little left in the way of reserves after years of SNP pressure on council budgets.

“The UK government has provided £155 million of cash for local authorities in Scotland. But instead of simply passing that on to Scotland’s local councils, it looks like some of it will be diverted into the Scottish Government’s coffers.

“Yet again, communities across the Highlands and Islands will miss out because funding intended for their local councils will be held back by ministers in Edinburgh”.

Cosla has also urged ministers to pass on the funding to help councils at the ‘vanguard’ of the fight against Covid-19.

“Whilst we fully appreciate the pressure facing the cabinet at this time, councils are facing an extremely challenging situation on the ground, with significant additional costs being incurred on a daily basis, as well as massive losses of income as a result of the lock down,” said Cosla’s resources spokeswoman Gail Macgregor.

“The response from Scottish government so far does nothing to alleviate the collective concerns of Scottish local government and we call on the consequentials to be passed to local government immediately.”

Ms Forbes said in a debate last week that she recognised the pressures faced by councils but it was important to understand what the full costs are.

“It is perfectly reasonable to operate on that basis,” she added.

Last month, suggestions were raised that the SIC should look again at whether to use its own reserves – after Orkney Islands Council made £5 million available to businesses to help amid the Covid-19 crisis.

The SIC said at the time its priority was to work with central government  – and was waiting to hear how the consequentials funding would be passed on to councils.


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