Councils across Scotland claim they will have to set their precarious revenue plans “blindfolded” after the Chancellor announced he would not unveil his budget until March 11 – 20 days before the end of the financial year.
Administration leaders across Courier Country have reacted angrily to Sajid Javid’s announcement on Tuesday the government would not present its budget for another three months.
They claim the knock-on effect of this could lead to “monthly” budgeting as a precaution to the “little time” each local authority will have to set, present and approve its budget.
Council administrations are required by law to agree balanced revenue budgets.
Scottish Government Finance Secretary Derek Mackay said the UK Government had given “no prior warning” as to when the budget date would be set.
The Treasury insisted they had shared estimates of tax and welfare block grant adjustments based on latest OBR forecasts in December 2019 “to aid Scottish Government budget preparations”.
They added there was “no reason” why the Scottish Parliament could not set its own budget ahead of the UK, based on these forecasts.
Mr Mackay said: “The UK Government’s approach to the Scottish budget is completely unacceptable – the delay of over four months since their original planned date cannot be blamed on the general election, and suggests a disregard for devolution and a lack of fiscal responsibility.
“The failure of the UK Government to publish its budget at an earlier time means we do not have clarity on the funding available for our schools, hospitals and other vital public services. Despite this, we remain focused on introducing a Scottish budget for 2020-21 at the earliest practical opportunity.
“We will continue to engage with the Scottish Parliament and the Scottish Fiscal Commission over how best to respond to what are exceptional circumstances, and an announcement on the proposed date for introduction of the new Scottish Budget will be made in due course.”
In Fife, council co-leader David Alexander said: A March 11 budget totally ignores the work the Scottish Government and councils are required to do to be able to set a budget.
“The Scottish Government will not know what their resources are until after March 11.
“Fife Council will not know what our resources are till after that. The Westminster Government had a budget ready to be presented but cancelled it due to the General Election.
“This stunt looks like a deliberate attempt to disrupt the Scottish budget cycle and create concerns among the thousands of staff who provide the services so many rely on.”
Perth and Kinross Council leader Murray Lyle said: “We set our budget last year to cover three years, so we have one we can stick to unlike the Scottish Government.
“One difficulty we might have is setting the council tax rate before the end of the financial year, without having set the budget, we still might not know what the full financial settlement is by then.
“Given the squeeze on money from the Scottish Government in the last four or five years, and we have already trimmed ‘low hanging fruit’, any further cuts could have a terrible impact on public services in Perth and Kinross.”
Alexander Garden, chair of the Chartered Institute of Taxation’s Scottish technical committee, said: “If MSPs fail to reach agreement – a scenario that could be seen as highly plausible in a parliament of minorities – Scotland would revert to the UK rates and bands of tax set by Westminster, effectively foregoing its ability to set its own income tax rates.
“There remains the chance that Derek Mackay could choose to go it alone and outline his plans before 11 March, but in this situation, he would be constrained by not knowing the true extent of Scotland’s fiscal picture.
“None of these scenarios are appealing and mean we are facing a Scottish budget process that will be conducted at breakneck speed, with little room for manoeuvre”.
COSLA’s Resources Spokesperson Councillor Gail Macgregor said:“By delaying the UK budget until mid-March, the UK Government is putting thousands of essential public services at risk of going without funding. COSLA is calling for the Scottish Government to do all it can to mitigate this risk.
“Local authorities carry out a complex and hugely important role in our society. As the employer for 10% of Scotland’s workforce and a procurer of over £6.3bn in goods we are the key economic driver for communities across the country. Any delay to our budgets means that these services are put at risk.”
A HM Treasury spokesperson said: “Nothing stops the Scottish Parliament from passing their budget before the UK budget. We are working with the Scottish Government as part of an agreed process to provide the information they need to prepare their budget.
“At the Spending Round, we announced that the Scottish Government’s block grant will increase by £1.2 billion next year.”
