Scots councils handed £750m Covid funding package boost

A £750 million funding package to help councils deal with the impact of coronavirus across key areas like social care and schooling has been unveiled by the Scottish Government.

Thursday, 8th October 2020, 12:30 pm
Kate Forbes has unveiled £750m package
Kate Forbes has unveiled £750m package

The money will include a £90m scheme to compensate councils for lost income in areas like lost sales, fees and charges from services such as sports centres and parking charges.

The pandemic has placed extreme pressure on local authority budgets, coupled with a dramatic loss of income as leisure centres and cultural hubs were forced to closed.

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Extra teachers have been recruited to deal with restrictions on school class sizes, while social care demand has soared.

The new package, agreed between the Scottish Government and local government body Cosla, will allow individual councils to spend the cash as they see fit, depending on local circumstances.

Finance secretary Kate Forbes said: "The Scottish Government has delivered on our commitment to support councils across Scotland with a game changing package of financial flexibilities, giving them the powers they need to make informed decisions about spending at a local level.

“In addition, we are close to finalising the details of additional financial support through a Lost Income Scheme, worth an estimated £90m subject to confirmation of the funding from the UK Government. For trusts delivering services on behalf of councils this can also be topped up with £49m of additional funding already confirmed.

“This support will help councils and their trusts manage the loss of income they are facing from local services due to Covid-19.

“These measures are excellent examples of how the Scottish Government is working together with Cosla and local authorities to ensure that we are doing everything within our power to save jobs, protect our public services and reboot our economy.”

Councils are to be granted additional spending powers which could be worth around £600m over the next two years to address the financial pressures caused by coronavirus.

New funding levers will allow councils to use capital receipts to meet one-off revenue funding pressures, including Covid‑19 related costs. They will also mean councils can extend the debt repayment period over the life of the asset rather than the contract period, as well as taking a “repayment holiday” this year or next to defer loan fund repayments.

In addition to this, a lost income scheme will be established to help compensate councils and trusts for lost sales, fees and charges from services such as sports centres and parking charges. Councils and their trusts will have access to an estimated £90m of funding with council trusts delivering services on behalf of councils able to receive a share of a further £49m of support through the scheme.

Cosla’s resources spokesperson Councillor Gail Macgregor welcomed the latst measures.

“Responding to Covid-19 whilst continuing to deliver essential, everyday services has put extreme pressure on local government finances this year," she said.

“The pandemic has also meant substantial losses of income across a range of council services including leisure, sport, culture, and planning. Balancing budgets will be a real challenge and this has been fully recognised by Scottish Government.”

Added to additional funding already committed, this brings the value of the overall Covid-19 support package for councils to more than £1 billion.

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