South Ayrshire Council has doubled down on its claim that its hands are tied by ‘increasing’ ring fencing of Scottish Government funding.
As it prepares options for next year’s budget, SAC has posted its annual video outlining how it receives funding and how that money is spent.
This includes information about how much of its funding comes directly from the Scottish Government and the restrictions it is placed under.
The video states: “This means that an increasing portion of Council budgets is ring-fenced to drive national policy initiatives and for the protection of education and health and social care services, leaving an ever-decreasing portion of the block grant that we can use to fund and deliver all other services.”
In 2023 the Scottish Government and Local Government body CoSLA signed the Verity House Agreement.
The agreement stated: “From this point onwards, the default position will be no ring-fencing or direction of funding, unless there is a clear joint understanding for a rationale for such arrangements.”
This was reiterated in a briefing to the Scottish Parliament in September which stated that ‘the proportion of local government funding from the Scottish Government which is formally ring-fenced is lower now than it has been for six years.’
However, South Ayrshire Council says that a higher proportion of funding is ‘directed’, reducing the council’s control over its spending.
A South Ayrshire Council spokesperson said: “As local authorities have faced a progressively challenging financial position, the nature of Scottish Government funding has come under increasing scrutiny.
“A key area of focus has been on ring-fenced or directed support, i.e., directed funding, where funding is provided for a specific purpose set out by the Scottish Government.
“There are conflicting views of the amount of funding that is directed, as illustrated in Audit Scotland’s Local Government in Scotland Overview 2023.
“CoSLA have been seeking changes to the Scottish Government approach to funding local authorities, noting that each year a higher proportion of funding is ‘directed’, reducing Local Government flexibility.”
CoSLA has urged the Scottish Government to allow more spending to be decided by local councils ahead of this week’s Scottish budget.
In a statement, they said: “We are calling on the Scottish Government to provide fair and flexible funding to allow councils to balance budgets, meet workforce challenges such as recruitment and retention issues, higher demand for services, and the ability to provide fair pay uplifts.
“Our councils carry out fantastic and essential work within our communities every single day. It is imperative that Local Government is provided with the necessary funding to preserve this and ensure sustainability of local services so we can continue to deliver the best outcomes for all.”
The Scottish Government have been contacted for comment.