The UK government’s decision to publish its Budget on the same day as Scottish councils are legally required to set Council Tax levels will create “unprecedented” problems for local government.
The Accounts Commission, the public spending watchdog for local government, warned Holyrood’s Local Government Committee today that the decision will be “problematic” for councils.
The UK budget has been pushed back to 11 March and this is causing major uncertainty for the Scottish budget, which cannot be set without knowing UK spending plans. This delay will have a knock-on effect to local councils, which – by law – must set their council tax by that date.
Kenneth Gibson MSP, who questioned the Accounts Commission at Committee, commented:
“This is a stark warning of the impact of this delay to the UK budget on communities across Scotland.
“It’s clear that the Tories either didn’t understand or didn’t care that delaying their budget will cause major headaches to the Scottish Government and local councils. They did so without either informing or consulting anyone north of the border.
“The Tories are treating Scotland with enormous disrespect. We deserve better.”
Dr Graham Sharp, Chair of the Accounts Commission said:
“Clearly this situation is problematic and I supposed the good news is that everyone has identified that and are working on it. As you say the timing and the legislation relating to the setting of a rate which should be based on a balanced budget simply doesn’t cohere with a UK budget on the 11th March and I know everyone is going to be working on that and on our part we’re very happy to participate and contribute to that. From a governance point of view I think each council will need to be taking advice from its monitoring officer and its s.95 officer on exactly what the position is and what it has to do in the time scales and I know a number of options have been floated and I don’t know what’s going to happen in the next few weeks there.”
Fraser McKinlay, Controller of Audit, Accounts Commission said:
“Just to add briefly it is as the chair says a really problematic and kind of unprecedented as many of you will know having been sitting round the council table as well. And there are issues for the Scottish Parliament and Government and everyone else in this. And as the chair says we are very happy to contribute to the discussions about how we manage this over the next few weeks. From our perspective I think our interests are in good governance as the chair describes in terms of making sure that Councillors are given the right kind of information and advice particularly from the statutory officers.
“It is possible for councils to set council tax without approving the overall budget. It’s clearly not ideal in terms of good financial management although I would say given the evidence in councils these days that their medium-term and longer-term financial planning is actually in pretty good shape, they are probably in a better place to do that now than say 5 years ago. I think the work that councils have done on medium term financial planning stands them in better stead if that’s where they get to. As the chair says we will keep very close to the discussion and options being presented but as things stand it is really difficult to see how councils can set a fully considered and balanced budget in the timescales required.
“I think, as again members will know, that the 11th March date is not a date plucked out the area there is also the practical matters of getting council tax bills printed and sent out to council tax payers so they know what they are paying. And the final I think practical implication that would be the scope for councils to set council tax has in the past few years been part of the local government settlement. Now the local government settlement comes as part of the Scottish budget process so there is a bit of an issue there even if some councils were to want to set council tax before the 11th March in advance of doing a budget so there is a lot to work through.”