Councils in Scotland have been given “game-changing” powers over their finances to aid the Covid-19 recovery, Finance Secretary Kate Forbes has said.
But last night the Scottish Government was accused of encouraging local authorities to “sell the family silver to keep the lights on”.
Ms Forbes announced councils would be able to use capital receipts to relieve pressure on day-to-day spending, including on the pandemic effort, and permitted them to extend the repayment period for building loans over the life of council-owned assets – rather than the period defined in any contract.
The government estimates the new powers are worth £600 million.
A £90m council lost income scheme was also unveiled, with another £49m on offer to trusts delivering services on behalf of councils, such as Sport Aberdeen and High Life Highland.
The finance secretary yesterday said: “Working in partnership with Cosla, the Scottish Government has delivered on our commitment to support councils across Scotland with a game-changing package of financial flexibilities, giving them the powers they need to make informed decisions about spending at a local level.
“This support will help councils and their trusts manage the loss of income they are facing from local services due to Covid-19.”
The full £150m promised is yet to be secured from the UK Treasury.
Last night Aberdeen City Council Conservative co-leader Douglas Lumsden branded it a “cheeky” move.
“These new powers basically encourage us to sell the family silver to keep the lights on – it’s an absolute disgrace,” he said.
“Once again ministers aren’t funding us correctly and are encouraging us to asset strip to pay the bills – this after all the extra work councils have taken on through the pandemic.”
Financial relief was more warmly welcomed by fellow Conservative and Aberdeenshire Council leader Jim Gifford – although he worried the £90m fund would not go far enough.
He said: “This is just flexibility and not new cash, which is what we really need.
“If the scheme is worth £90m, our share through the standard formula would be around £350,000.
“Not an insignificant sum but, compared to the costs we have been racking up, not an awful lot at all when we are looking at a figure well north of £45m over the next three years.”
The package was created in consultation with Cosla, the representative body for Scottish local authorities.
And Moray Council leader Graham Leadbitter praised the “creative approach”, which he said would “bear fruit” for the region.
“While it will take a bit of time to calculate the full benefit for Moray we do know it is substantial and will cover many of our costs associated with tackling the pandemic.
“Going forward that will really help us to focus on investment in transformation of services, improvements in key areas like educational attainment and economic recovery without having excessive stress over budgets.”
