Local authority funding fact check – they had a SURPLUS of almost £100 million last year from SNP Government support to add to the £4.5 BILLION they already have!

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https://www.gov.scot/publications/scottish-local-government-finance-statistics-2022-23/

How much have they already got in those usable reserves?

At 31 March 2023, local authorities held £4,532 million of usable reserves.

https://www.gov.scot/news/local-government-expenditure-and-income-in-2022-23/#:~:text=At%2031%20March%202023%2C%20local,be%20repaid%20from%20future%20revenues.

£4.5 BILLION!

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7 thoughts on “Local authority funding fact check – they had a SURPLUS of almost £100 million last year from SNP Government support to add to the £4.5 BILLION they already have!”

  1. Meanwhile in a Labour led council , Birmingham, we hear they are going bankrupt….to follow on from other English councils who also have already went bankrupt…….or where some are in dire circumstances financially….Breaking News ‘Not able to be linked to the SNP’…..despite efforts of some within the media and too others….though it will never be breaking news in the media where ‘we (supposedly) are’ as in a Labour council in England (not only one) gone bankrupt…..as too negative for the Labour party here and also for their HQ and too the Tory UK government.

    Last night BBC Newsnight had a political hustings in Doncaster hosted by Victoria Derbyshire…..interestingly a member of the audience mentioned Labour council in Birmingham going bankrupt…and said hard to vote for anyone in next GE ….including very much the Labour party …..

    On the panel was a Tory and Labour MP….and one Christine Jardine an Edinburgh MP who spoke on the NHS (England) and how the Lib Dems would also use a ‘windfall tax’ to finance the NHS…..sure her Edinburgh constituents will be impressed at her efforts to try and save and fund the English NHS…..from a resource she and her party stated would NOT benefit an independent Scotland…..she mentioned a figure of £15 billion to the UK Treasury via windfall tax though I did not catch what period she said that would be in…..i.e. a year or whatever.

    Interestingly the fourth member of the panel…..was a ……member of the Reform UK party ( who have NO elected MP’s….unless 30p Lee swaps parties and then becomes an MP for the Reform UK Party in the HOC ….as in a party that he was not elected to sit in the HOC to represent in the GE in 2019 by his constituents) ….so basically Newsnight are following the same route that BBC QT has always followed in giving a voice to NON elected political party representatives (right wing ones) thus promoting them as a credible choice for voters in the next UK GE…..next week they, Newsnight, are in the seat for Paisley & Renfrewshire I think……perhaps Christine Jardine could also be on that panel too as a Lib Dem MP supposedly representing a Scottish constituency……and we could also have another Reform UK party member on that panel too…why not as every little bit helps in those attacking the SNP……I mean will there will any room for the SNP on that panel ?…and if there is will they the SNP, as per, be crowded out by Pro UK political party representative (including the Host of Newsnight at that hustings….who will be Kirsty ‘Friend of Jack McConnell’ Wark)…..

    Pro UK stitch up…..another one……but do not look over there at English councils only look over here as in Scotland…where Labour councils are reaching out to a Tory minister to overrule a parliament and government in Scotland on Council tax…..who speaks for democracy and devolution in Scotland ?….not Labour, Tories or indeed the Lib Dems…devolution and democracy be damned and party politics Pro UK style uber alles…..always

    NMRN

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    1. Excellent comment, a good suming up of the situation in the UKnotOK. Scotland should only vote for Scottish politiical parties, and candidates need to be vetted by SNP just going on the two(?) who have jumped ship claiming they no longer support independence etc. Oh aye, I bet they use the new Forth road bridge, the actual functioning Scottish NHS, and take free prescriptions, etc. Maybe we could insist on a swear allegiance to Scotland or something when they take office, 😉

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  2. Local Government finance seems to be so complex that it offers too many opportunities for half-truths, misrepresentation and spin. The issue of financial reserves is just one factor in this mix.

    For example, see this from Audit Scotland (16 January, 2024) ‘Local government in Scotland: Financial bulletin 2022/23’ https://www.audit-scotland.gov.uk/publications/local-government-in-scotland-financial-bulletin-202223 (with my emphasis)

    Para 5: ‘DESPITE THE FINANCIAL PRESSURES OF RECENT YEARS, HALF OF COUNCILS INCREASED THEIR USABLE RESERVES IN 2022/23, AND OVERALL USABLE RESERVES GREW TO £4.45 BILLION. This is driven by growth in committed reserves. SOME OF THIS IS REMAINING COVID‐19 FUNDING, some is attributable to the permitted use of financial flexibilities for the repayment of longer‐term debt but there are also indications COUNCILS ARE BUILDING UP RESERVES to manage the known financial challenges in future years. However, the LACK OF TRANSPARENCY IN SOME COUNCILS’ ANNUAL ACCOUNTS makes it difficult to draw firm conclusions on councils planned use of reserves.’

    We also learn: ‘We undertook a review of councils’ management commentaries to assess the transparency of their reporting …’ and on findings: Para 44 ‘Twenty councils included commentary related to outturn against budget including the main reasons for the variances. Of the remaining, NINE PROVIDED INSUFFICIENT DETAIL OR NO COMMENTARY ON VARIANCES AND THREE LACKED CLARITY ON THE OUTTURN AGAINST BUDGET.’

    1. ‘Eleven councils outlined progress against savings targets to some extent, with some providing a table of savings performance trends and/or links to other documents. Of the remaining, 12 PROVIDED GENERIC STATEMENTS OR INSUFFICIENT DETAIL, SEVEN PROVIDED NO INFORMATION and two referred only to previous or future savings plans.’

    On the 2022/23 financial position: Para 51. ‘In 2022/23, the total usable reserves across all councils as a proportion of total net revenue expenditure was 27.3 per cent compared to 20.4 per cent in 2019/20 before the pandemic.

    1. ‘IN 2022/23, NO COUNCIL HAD USABLE RESERVES THAT WERE LESS THAN TEN PER CENT OF NET REVENUE EXPENDITURE COMPARED TO FOUR COUNCILS IN 2019/20. TWENTY COUNCILS HAD RESERVES THAT WERE OVER 20 PER CENT OF NET REVENUE EXPENDITURE, COMPARED TO NINE IN 2019/20.’

    Exhibit 11. Level of usable reserves as a proportion of net revenue expenditure, split by council, 2022/23 – the highest levels were for: Renfrewshire = 42%
    North Lanarkshire = 35%
    North Ayrshire = 32%
    Argyll & Bute = 31%

    Amongst the others, Inverclyde = 16%

    ‘Some councils hold very low levels of uncommitted reserves BUT HAVE SPECIFIC RESERVES EARMARKED FOR CONTINGENCY INSTEAD.

    1. ‘Councils have reserves policies in place that set out the rationale or the minimum reserves levels set by the council. Most councils plan to maintain uncommitted reserves at around 2 to 4 per cent of net budgeted expenditure as a contingency to respond to unforeseen events and associated cost pressures.’

    And more on Inverclyde Council, comparing reserves in 2012-13 with last FY:

    Source: Inverclyde Council AUDITED ANNUAL ACCOUNTS 2012-2013:

    – ‘Uncommitted General Fund Reserve as a proportion of Annual Budgeted Net Expenditure – Reflects the level of funding available to manage financial risk/unplanned expenditure. THE COUNCIL’S POLICY IS 2% OF ANNUAL TURNOVER which is considered appropriate in the context of the Council’s financial and ongoing risk profile.’

    THE REPORTED LEVEL IN 2012-13 WAS 2.74%

    Source: Inverclyde Council AUDITED ANNUAL ACCOUNTS, 2022-2023:

    – ‘Uncommitted General Fund Reserve as a proportion of Annual Budgeted Net Expenditure – Reflects the level of funding available to manage Financial risk/unplanned expenditure. THE COUNCIL’S POLICY IS 2% OF ANNUAL TURNOVER which is considered appropriate in the context of the Council’s financial and ongoing risk profile.’

    The statement of accounts records that in 2021-22 THE LEVEL WAS 1.83% AND IN 2022-23 THIS HAD INCREASED TO 3.49%.

    I think it’s fair to say that when it comes to political commentary on local government funding in the media the best advice is ‘be alert’: if a journalist or quoted political source is suggesting simplicity or straightforwardness be sceptical!

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  3. THE BIGGEST SINGLE WORRY THAT ENGLISH COUNCILS ARE BANKRUPT

    is when labour gets into power

    THEY WILL STEAL THE MONEY NEEDED FOR ENGLISH INEFFICIENCIES

    FROM SCOTLAND

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  4. Unionist councils spend too much on building empty shops and offices. Instead of building schools and affordable houses.

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  5. Just published by the Scottish Government:

    https://www.gov.scot/binaries/content/documents/govscot/publications/statistics/2024/03/scottish-local-government-finance-statistics-2022-23/documents/scottish-local-government-finance-statistics-2022-23/scottish-local-government-finance-statistics-2022-23/govscot%3Adocument/scottish-local-government-finance-statistics-2022-23.pdf

    ‘’Usable reserves reflect a local authority’s accumulation of surplus income that can be used to finance future revenue or capital expenditure on services.’

    ‘The General Fund is the principle usable revenue reserve of the local authority. Any deficit in a local authority’s revenue accounts is met from their General Fund, and any surplus is added to the General Fund reserve. The General Fund therefore reflects a local authority’s accumulation of surplus income that can be used to finance future revenue expenditure on services or to fund future capital expenditure.’

    ‘Local authorities had AN INCREASE OF £118 MILLION IN THEIR REVENUE RESERVES, AND AN INCREASE OF £222 MILLION IN THEIR CAPITAL RESERVES IN 2022-23. THIS MEANS LOCAL AUTHORITIES’ USABLE RESERVES INCREASED BY £339 MILLION OVERALL, from £4,193 million at 1 April 2022 to £4,532 million at 31 March 2023.’

    From the Guardian 28 February: ‘Nearly one in 10 English councils expect to go bust in next year, survey finds – Annual poll of council leaders and top managers finds near-total collapse in confidence in their financial viability’.

    From the Independent on England’s local authorities (20 February): ‘

    ‘Nearly all councils are planning to raise council tax by the maximum amount permitted without holding a referendum, new analysis shows, amid a crisis in local authority funding.

    ‘All but eight of the 136 top-tier councils to have declared their proposals plan to hike council tax by at least 4.99 per cent in April, according to analysis by the County Councils Network (CCN).

    ‘And in some areas the jump will be even higher; four councils recently forced to declare effective bankruptcy – Birmingham, Woking, Slough and Thurrock – have been given special dispensation by the government to raise council tax by up to 10 per cent.’

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