Scottish local government finance leaders claim Audit Scotland report underestimates pressures currently faced by councils.
CIPFA’s Local Government Directors of Finance group, comprised of 32 chief financial officers of Scottish councils, claim Local government in Scotland: Financial overview 2015/16 doesn’t fully recognise the significance of the immediate pressures councils are under by suggesting local authorities are currently in good financial health.
However, the group welcomes the acknowledgement of future financial challenges and the recommendation that councils must move to medium and long-term financial planning to best manage this.
To ensure long-term planning, the local authority finance leaders urge the Scottish Government to take a more strategic view of service delivery and funding levels. They strongly recommend this should include a move away from one-year grant settlements.
The group also welcomes Audit Scotland’s recognition of strong financial management being deployed by local authorities and agree that this will likely become more challenging given significant future pressures.
Derek Yule, Chair of the Local Government Directors of Finance, commented on the report:
“We are pleased that the report appreciates the tremendous cost pressures that Scottish local authorities will have to manage in the future and recognises the strong financial management currently in place.
“But, after years of real term reductions in funding coupled with a rise in demand for core services, councils are already facing significant funding gaps. But unfortunately by claiming that councils are in good financial health, this report does not take into account the current scale of uncertainty.
“Indeed, as Audit Scotland itself states, councils are already having to make tough decisions and employ strong financial management to balance the books.
“Therefore the Scottish Government must do more to support local authorities so they are in the best position to manage future financial pressures. Key to this will be moving from year to year grant settlements that hinder councils from adopting a more long-term approach.”
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