Aberdeen council leaders say they’d be ‘foolish’ to accept finance deal

Jenny Laing said city residents would agree the council would be foolish to sign off the settlement.

The leaders of Aberdeen City Council have written to Finance Secretary Derek Mackay confirming they cannot accept his finance settlement as it stands.

The letter, which is signed by co-leaders Jenny Laing and Douglas Lumsden, asks if the current February 2 deadline to accept the grant settlement offered by Mr Mackay can be extended given the local authority won’t learn its exact details until March 1.

Councillor Laing said the people of Aberdeen would agree it would be “foolish” to accept a deal “when we don’t know what the terms are”.

She added: “When we set our budget we want to be sure that we know exactly what the settlement is so we can minimise any impacts on the residents of Aberdeen.”

Last week the local authority agreed a motion which stated it “will be forced” to look at cuts to “vital services”, revealing its revenue grant, which covers the provision of day-to-day council services, looks set to be reduced by £22 million. Cllr Laing said it was too early to say where cuts would have to be made.

But added: “The first place we will look is making efficiencies out of the system before we would look at cuts to frontline services.”

A major restructure of the local authority is currently under way in a bid to save £125m.

The letter to Mr Mackay also reveals the council’s director of resources believes the funding falls below the 85% floor set out by the Scottish Government to ensure all councils receive 85% of the Scottish average total revenue support per head.

By the council’s calculations, it is at 84.69%, meaning they could stand to be underfunded by around £1.6m.

The letter also asks Mr Mackay if he can provide details on what would happen should the council fail to agree to the settlement.

Cllr Lumsden said: “Every year we tell the Scottish Government we are the lowest funded council in Scotland and every year the Scottish Government manages to retain that status.”

A Scottish Government spokeswoman said: “In spite of continued UK Government cuts to Scotland’s overall budget, we have continued to treat local government very fairly. Aberdeen will receive almost £347m in 2018/19, plus their fair share of an extra £181m. This includes an additional £8.7m from the 85% funding floor introduced by the Scottish Government.

“The revised 2018/19 local government settlement provides an increase for local revenue services of over £174m (1.8%) in cash terms and an increase in capital spending of £89.9m (11.4%).

“ It delivers a real terms increase in both revenue (0.3%) and capital funding (9.8%). Councils also have the flexibility to raise an additional £77m by increasing council tax by up to 3%.”