Shadow Finance Secretary Donald Cameron is engaged in a war of words with Finance Secretary Kate Forbes over whether councils should use their remaining reserves to pay for the fight against coronavirus.

Kate Forbes wrote to the Convention of Scottish Local Authorities (Cosla) in response to calls for her government to pass on all £155 million in “Barnett Consequentials” intended for local authorities.  She indicated that there would be nothing immediate about this process.

The so-called “Barnett consequentials” arise under the Scottish Government funding formula because it was announced that  £1.6 billion would be passed on by the UK Government to English councils to help alleviate coronavirus associated costs.

Mr Cameron, a Highlands and Islands MSP, said: “This is an extraordinary statement from the Finance Secretary.

“She seems to be completely unaware of the dire financial situation confronting local authorities across the Highlands and Islands.

“Instead of simply passing on the funding provided by the UK Government directly to the councils, she is dithering and delaying.

“Councils like the Comhairle, which have already seen their reserves dwindle, are in no position to provide extra cash at the drop of a hat.

“Ministers in Edinburgh need to get real, show that they are on our side, and properly value what local authorities are doing for our communities.”

Kate Forbes told Councillor Gail Macgregor, the COSLA Spokesperson for  Resources in letter dated April 29: “that the Scottish Government remains committed to deploying any additional funding in a way that is helpful to local government and the Covid response.

“I am aware of the cost collection exercise COSLA are currently co-ordinating and that is a critical piece of evidence to inform how we can best allocate additional funding and what outcomes we are seeking to support.

“As part of that I want to understand how those costs are being mitigated by the funding measures we have already committed, including support for Communities, Social Care, Non-Domestic Rates measures, and as well as through flexibilities on ring-fenced grants, like Early Learning and Childcare funding.

“I also want to consider what further reprioritisation we could undertake jointly to free up resources to meet the cost challenges now and in the future, along with the use of local government reserves and applications to the Coronavirus Job Retention Scheme (e.g. for ALEOs) to help contain the costs.”

Councillor Gail Macgregor said on Friday May 1st: “Council Leaders were clear today that the reaction of councils to the Covid-19 epidemic, ensuring essential services are secured, and that our most vulnerable people are protected has been a remarkable effort and, as such, the £155 million of consequentials should be passed to Local Government immediately.”

Local government, with its public and third sector partners and volunteers, was at the vanguard of protecting communities during the pandemic, she added.

“Councils are working hard to keep a huge range of essential services running to meet the needs of communities and to be responsive locally. But the bottom line is that protecting people and providing services costs money.

“That is why, when the £1.6 billion of funding was announced by the UK Government for councils in England over two weeks ago, we immediately wrote to the Scottish Government in relation to the £155 million of consequentials for Scottish councils. I will continue to keep discussions going with Kate Forbes on this issue.

“Whilst we fully appreciate the pressure facing the Cabinet at this time, Councils are facing an extremely challenging situation on the ground, with significant additional costs being incurred on a daily basis, as well as massive losses of income as a result of the lockdown."

Shetland Islands Council leader Steven Coutts says it is an “untenable position” for the Scottish Government to hold on to £155 million in cash that should be passed immediately to local authorities.
Coutts said that the consequentials would not pay for all the coronavirus related costs to councils. He said: “The main issue is that in comparison to the UK government the Scottish Government have held on to that money and at the moment there’s no clarity on why.”