MORE than 15,000 jobs have been lost and councils forced to plunder cash reserves in a bid to shoulder cuts of £1 billion over the last five years, spending watchdogs have revealed.

Around half of local authorities are said to be ill-equipped to bridge projected funding gaps, with current measures neither “sufficient or sustainable”, the Accounts Commission has warned in a damning report that also claims education budgets are being raided to bolster the burgeoning cost of providing social care. 

Deputy chairman Ronnie Hinds, a qualified accountant with more than 30 years’ experience in local government, said councils were operating in an “increasingly demanding environment”.

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Following the upcoming local government elections in May, he said: “New and returning councillors face major challenges from continued reductions in their funding from the Scottish Government, and greater demands for services from an ageing population and, in parts of the country, a growing school population.”

And in a signal that the private sector could step in to relieve pressure, he said councils must consider “alternative forms of service delivery” to achieve best value. 

In its 2017 overview published today, the Accounts Commission outlines a long-term decline in Scottish Government real terms funding, which makes up around 60 per cent of council income.

At the same time, there continues to be increasing pressures on services, particularly in social care and education, which together account for over 70 per cent of council spending.

Welcoming the report, Kevin Stewart, the Local Government and Housing minister, said councils had been treated “very fairly” by the Government and insisted the Accounts Commission failed to consider other support for local services that was being made available this year.

While it insists that, overall, local authorities have maintained or improved their performance despite the challenges, levels of public satisfaction are declining and complaints are increasing as taxpayers become increasingly unwilling to pay more for a reduced service.

And it warns councils to resolve problems urgently, with financial pressures likely to worsen as elderly populations double in many areas over the next two decades.

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Despite councils relying on cash reserves to deliver services, it emerged last week that local authorities recorded surpluses of £450 million for the past year and currently sit on cash reserves of almost £2 billion.

The report said charges are being increased and services reduced to accommodate budget cuts.

“Paying more for potentially fewer or reduced services will be a difficult argument to sustain, and even more so if compounded by possible increases in other charges,” it said.

“The pace and scale of reform needs to increase in some councils. Despite these challenges, councils’ performance has been maintained or improved.”

Council-tax bills will rise for many households this year, with the Scottish Government increasing the charge for people in more valuable homes and also ending the freeze, allowing authorities to increase the tax by up to 3 per cent.

The report also said that cutting sickness rates could give a staffing boost equivalent to taking on about 650 full-time workers.

It highlighted staff sickness rates for 2015-16, with these varying from non-teaching staff taking an average of 8.8 days off a year as a result of illness in Aberdeenshire to an average of 14.8 days in the Western Isles.

Scottish Labour deputy leader Alex Rowley branded the report “damning” and said the “human cost of SNP austerity” was the equivalent of 15,100 full-time jobs lost since 2010.

“That is a tragedy – and the truth is services will only decline further as councils are given less and less support by the SNP,” he said.

COSLA President Councillor David O’Neill said: “There have been various presentations and misrepresentations of the local government budget over the last couple of years which we feel are not only confusing to communities but also significantly damaging to the role of local government.

“Despite challenging financial circumstances Councils continue to prioritise spend in front line services and the vast majority of productivity, output and outcome measures within Councils have improved. “

Jenny Laing, leader of the Scottish Local Government Partnership, which represents Aberdeen City Council, Glasgow City Council, Renfrewshire Council and South Lanarkshire Council, said the report highlighted how “relentless” budget cuts was taking its “toll on frontline services”.

She said Nicola Sturgeon and Finance Secretary Derek Mackay should be “empowering councils... so we can improve the lives or ordinary, hard-working families”.

Kevin Stewart, the Local Government and Housing minister, said: “We welcome this report and expect all councillors to take any necessary action to consider and implement its recommendations. Local authorities are expected to use resources as efficiently and effectively as possible to ensure taxpayers get the best possible services and value for money.

“The Scottish Government has treated local government very fairly, maintaining funding in cash terms despite the cuts to the Scottish Budget from the UK Government.

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“The Accounts Commission Report does not take into account the other support for local services being made available in 2017-18.  Taking this into account, local authority revenue funding between 2010-11 and 2017-18 is broadly the same as the reduction in the Scottish Government’s overall budget imposed by the UK Government over the same period.”