Scottish councils stunned by government accounting blunder

Derek Mackay MSP minister spoke out.
Derek Mackay MSP minister spoke out.

Cash-strapped councils across the country have been told a Scottish Government accounting error could leave their budgets £86million worse off than expected.

Aberdeen co-leader Jenny Laing said finance officials from local authorities were told of the apparent blunder at the end of last week.

It is understood provisional local government settlements announced in December included a block of funding, ring-fenced for criminal justice, which had been mistakenly allocated to two separate areas.

Councillors and officers who had already started planning next year’s finances on the basis of December’s estimated settlements will need to rethink major financial decisions, with just weeks to go before March 10, when council tax must be set for the next year.

Authorities across the north and north-east are already proposing deep cuts to some services as they struggle to balance the books.

Mrs Laing said the government’s Finance Secretary Derek Mackay had “proved beyond doubt that he is totally out of his depth and that the SNP government cannot be trusted to handle our citizens’ hard earned-taxes and run this country.”

She said: “Councils were told on Friday that the Scottish Government had double-counted the money ring-fenced for criminal justice, and that this error would mean a further reduction to the overall local authority settlement of £86million. This level of incompetence beggars belief, but such mismanagement has become a hallmark of Mr Mackay’s tenure as finance minister.

“Once you come to terms with this shocking blunder, we are then left grappling with the news that Aberdeen’s settlement for this year may be cut by another £3.5million.

“Councils up and down the country are facing similar cuts but, as Aberdeen is already the lowest-funded council in Scotland, the effects of this will hit us hardest.”

It came as MSPs also demanded to know if Scottish Government ministers took account of the £150million cost to councils of increasing public sector pay.

A Scottish Government spokeswoman said: “The provisional local government finance settlement was issued on December 14, 2017. This marked the start of the statutory consultation period with local government on the terms of the settlement and the indicative allocations to individual authorities. As a result of this consultation period we have received some suggested adjustments to be made to the provisional allocations from Cosla. We will respond to these requests shortly.

“The consultation circular makes it clear that the allocations in the December 14 consultation circular were only provisional at that stage and local authorities should not set their final budgets on the basis of these until the final allocations are confirmed following the end of the consultation period and the publication of the late February 2018 circular.  Local authorities have until March 10 to set their council tax for next year.”