Call For Fundamental Review Of Funding Local Government

15th April 2019

UNISON, the largest trade union in Scotland, and the Jimmy Reid Foundation are calling for a fundamental review of funding local government.

The call will be made at the launch of joint UNISON and Jimmy Reid Foundation report: Additional Revenue streams sources of funding for the delivery of local government services The report will be launched today (Monday 15 April) at the STUC 122nd Annual Congress in Dundee.

The Report states that expansion of local public services is possible with a fairer system of property taxes, and environmental charges. Local government has borne the heaviest burden of austerity cuts to the Scottish Budget since the financial. There just isn't enough money in the local government budget to meet the needs of our citizens. We need to examine new and alternative sources of revenue for local government.

Mike Kirby, Scottish Secretary of UNISON said: "Over the years, the balance of funding for public services through local government has shifted from approximately 50% coming from national government to 50% being raised directly by local authorities, to 85% of funding coming from central government and 15% being raised directly by local authorities.

Together with an overall reduction in funding, during a period of austerity, this has resulted, in severe financial pressures and impacted upon, the quality and delivery of vital public services. Politicians in all spheres must create the time and space for a fundamental review of funding local government. This report is a contribution, to that essential debate"

Professor Mike Danson, the lead author of the report said: "Within the constraints of the fiscal powers devolved under successive Scotland Acts, there are still some opportunities to generate greater funding for public services locally. Some changes will require time to explore, plan and introduce but it is economically efficient and effective to shift the tax burden onto property and land owners and away from Council Taxpayers, making the tax system more progressive and more based on ability to pay."

The report was commissioned by UNISON Scotland and carried out by Professor Mike Danson and Dr Geoffrey Whittam on behalf of the Jimmy Reid Foundation. The report will be launched at a lunchtime fringe meeting at the STUC congress in Dundee on Monday 15 April 2019. The speakers will be

• Professor Mike Danson (JRF)

• David Ross, Labour councillor and co-leader, Fife Council,

• Maggie Chapman, co-convenor, Scottish Greens

• Lilian Macer, Convenor, UNISON Scotland

The report recommendations:

i) Recruitment of additional council, government and agency staff to ensure that registration, regulation and collection of revenues is undertaken in order to identify where loopholes, avoidance and coverage has allowed some to escape making their fair contribution.

ii) Committees of the Scottish Parliament should examine whether the Small Business Bonus Scheme, and other reliefs from Non-Domestic Rates, are fit for purpose and determine what alternatives could support private and social enterprises and other bodies more effectively.

iii) Unions should remind the Government and Parliament of how the Fair Work Framework should underpin both these reviews and implementation of tax changes. Making reliefs and subsidies and tenders for public procurement dependent on good practices at the local level should raise revenues indirectly for Council budgets.

iv) Parliament, councils, unions and communities should explore how new taxes and levies can be introduced to support inclusive growth and the foundational economy. Attention should be paid to the opportunity for such initiatives to change behaviours and overcome negative externalities and market failures.

v) Unions should consider how municipalisation of buses, energy, and other public services could be appropriately pursued. This may require powers to be devolved from Westminster.

vi) Unions and others should also explore how local authority debts and PFI/PPP contracts can be taken over by the Treasury, saving local government many billions in interest charges each year and so releasing tax revenues for investment in local economies and communities.

vii) UNISON should consider establishing improved research and policy facilities through collaborations with academics and others in the STUC research network to assist in the above.

Some of the proposals that may follow from these recommendations would generate new income for local authorities while others may rebalance the burden of taxation onto the wealthy and higher income groups.

Some of the changes that may follow can be implemented immediately, some would require legislation by the Scottish Parliament, and others would require significant further devolution of fiscal and other powers from the Westminster Parliament.

Cuts to local government funding:

Local government has experienced substantial cuts to its budget and ability to deliver services to the public. The Information Service Annual Benchmark report shows what's happening to funding for individual services. Total revenue funding for councils has fallen by 8% in real terms across 8 years. Spending on teacher numbers and social care has been relatively protected. Education and social care make up 70% of expenditure within the bench-marking framework so this means substantial cuts have had to fall on other areas.

• a 22% reduction in culture and leisure spending

• a 34% reduction in planning

• almost 15% reduction in roads spending and

• almost 10% in environmental services spending

Children's Services

The education budget has reduced by 2.5% since 2010/11 but the number of primary school pupils and pre-school registrations has increased by 30,000. That is a big cut in the money available for each pupil. Total spending on primary and secondary education has grown in cash terms the real spend per pupil has fallen since 2010/11. (8% for primary and 4% for secondary). Satisfaction with schools has fallen for the sixth year in a row.

Adult Social Care

Total social care spending has grown by 10% since 2010/11 although spending on home and residential care for older people has fallen as a percentage of that total. Although the number of hours of home care has been relatively static spending on home care has risen by 15% since 2010/11. Much of this is due to paying staff the living wage. Spending on residential care has fallen by over 12% although the number of residents has only fallen by 2%.

Culture and Leisure Services

Culture and leisure services have seen substantial increases in demand alongside a 22% spending cut. Sports facilities have increased visitor numbers by 19%, libraries by 36% and museums by 29% over the period analysed. Spending on parks has also reduced by 5% . Public satisfaction rates have fallen for all culture and leisure services in the last 12 months.

Environmental Service

Despite the direct importance of these services to the health and safety of citizens real spending has reduced by 10%. Waste management has been cut by 3%, street cleaning cut by 27%. Preventive services like trading standards and environmental health have been cut by 18%. Spending on roads has fallen by 15%.