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RECORD FUNDING PROPOSED FOR SCOTTISH COUNCILS

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An Order has been proposed in Parliament for record revenue grant funding of more than£6.5bn for Scotland's local ...
An Order has been proposed in Parliament for record revenue grant funding of more than£6.5bn for Scotland's local authorities.

Finance and public services minister Andy Kerr asked MSPs yesterday to approve the grant support for Scottish council revenue spending for in 2002-03.

He said:

'This Order distributes more than£6.5bn of resources to local government. That is£.5bn more of additional resources than in 2001-02. We are distributing historic levels of resources to local authorities and working closely with them to encourage and support their efforts and to remove barriers to improvement.'

This Order commits substantial additional resources to deliver key policy priorities, including, for example:

the modernisation of the teaching profession

improved care services for older people

enhanced concessionary travel schemes

extra resources for the police

The minister also described a range of measures designed to enhance local government flexibility and autonomy in managing their financial affairs and to improve services. One such area will be a review of the capital control system to aid local authorities in making their own decisions on capital spending levels, tailored to meet the needs of their local communities.

He continued:

'Last year the executive announced a 40 per cent increase in local authority capital allocations over three years. With our local government partners, we are working towards improving the capital finance system so that it allows councils to meet the challenges of the 21st century - to invest in assets fit for purpose - and improves the quality and accessibility of the services they deliver by investing in the latest technology.

'We are making progress towards this goal and I intend to make an announcement soon on the way forward. To underpin our reforms to strengthen local government, we are working to develop a finance system which supports our partnership with local government rather than impeding it. We have already introduced three-year revenue and capital allocations, secured councils' agreement to publish 3-year council tax figures, abolished expenditure guidelines, and begun putting in place local outcome agreements.

'In setting their budget priorities, local authorities have flexibility over the vast majority of the resources available to them, either through executive grant or locally raised income. Ring-fenced grants now account for less than 10 per cent of the total revenue funding I am announcing today and we will consider the potential for further reductions in ring-fenced controls where appropriate.'

The local government settlement was announced in December. The settlement included, for the first time in recent years, provision towards general local authority pay and price inflation. This was argued for by local government.

The Order brings in resources for additional money for needs like:

* Pre-school education, to ensure resources are made available to local authorities to enable them to provide by April 2002, a free, quality part-time pre-school education place for every 3 and 4 year old, whose parents wish it

* Supporting people, to enable vulnerable people to live in the community

* Adult Literacy, to raise levels of adult literacy and numeracy in Scotland, to more than double the annual capacity and help over 80,000 adults by 2004

* Rough sleepers initiative, to ensure no one will have to sleep rough by 2003

* Out of school care provision for children in deprived areas

The allocations do not include provision for the executive's policy on personal nursing care, which will be confirmed seperately, following discussions with Cosla.

Councils will also confirm their budgets and council tax levels next month. However, they have already published indicative council tax levels for next year. The settlement allocations include full Executive provision for new burdens and should not, therefore, impact on these projections. Over recent years council tax increases in Scotland have been lower than in England.

Local authorities require the consent of Scottish ministers to incur liabilities to meet capital expenses. The formal consent (under section 94 of the Local Government(Scotland) Act 1973) issues annually and limits the amount of an authority's capital spending. In practice most capital spending is funded by local authority borrowing but authorities can also use capital receipts from the sale of assets and revenue to fund capital spending.

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