Plenary, 10 Feb 2010

Meeting date: Wednesday, February 10, 2010

Official Report 468KB pdf

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Local Government Finance (Scotland) Order 2010

The next item of business is a debate on motion S3M-5649, in the name of John Swinney, on the Local Government Finance (Scotland) Order 2010.

The motion seeks the Parliament's agreement on the allocation of revenue funding to local authorities for 2010-11.

In 2010-11, the Scottish Government will provide councils with almost £12 billion, which includes total revenue funding of £11.141 billion and support for capital expenditure of more than £843 million. Although it is not contained in this order, we have earmarked a further £70 million to enable councils to freeze council tax again next year and I am delighted that seven councils—East Lothian, Midlothian, North Lanarkshire, Renfrewshire, West Lothian, Glasgow City and West Dunbartonshire—have already decided to freeze their council tax for a third consecutive year. I urge all councils to follow their lead. Once all councils have set their rates, I will bring a further order to the Parliament to allow the extra funding to be issued.

The order distributes £10.085 billion out of the total £11.141 billion. The balance includes £533.1 million of ring-fenced grants, mainly the police grant; £273.5 million for police and fire pensions paid to police and fire boards; £39.5 million for additional police officers; £86.5 million paid to criminal justice authorities; and £123.1 million to be distributed later, including £37.5 million for the teachers induction scheme and £15.6 million for adult support and protection.

Although it is not part of this order, the overall package includes support for capital funding of more than £843 million. Over the 2008 to 2011 spending period, total support for capital investment will amount to more than £2.8 billion, an increase of £200 million on the period 2005 to 2008.

Turning to 2009-10, the order seeks approval to distribute an additional £76.9 million to allow councils to carry through a number of agreed spending commitments that have arisen since the 2009 order was approved. They include: £37.5 million for the teachers induction scheme; £15.6 million for adult support and protection; £7 million for the zero waste fund; £6 million for backdated fire pensions and commutations; and £3 million to employ 100 extra teachers. Those resources are provided to help local authorities to meet the many challenges that they face, now and in the future, so that they can provide the vital services upon which communities across Scotland rely. The local authorities of Scotland face those decisions in partnership with the Scottish Government and recognise that, during the current spending review, the share of the budget that is going to local authorities has increased as a consequence of the Government's decisions on allocations to local authorities.

In October, I announced a new scheme to enable councils to apply for consent to borrow to meet equal pay back-pay costs. After consideration of the applications received, I confirm—and I will set out the details in a letter to the convener of the Local Government and Communities Committee—that I am granting consents with a total value of £65.4 million, which will come into force with immediate effect. Those further consents are additional to the £11 million that I announced last year for Aberdeen City Council.

In recognition of the pressure on councils that has been caused by damage to the local roads network across Scotland in the recent severe winter weather, I confirm that the Government is providing an additional £5 million in 2009-10 to be shared across all councils.

In November, I announced the lowest national poundage rate ever set in Scotland for business rates, matching that in England. We estimate that that will benefit Scottish businesses by more than £200 million in 2010-11. That means an average benefit of more than £1,000 per business property. In connection with the 2010 revaluation, our analysis indicates that almost 60 per cent of businesses will see their bills fall, with average savings of more than £1,300, which is almost double the reported figure in England. That is before the application of any of the relief scheme that we have made available.

Central to our consideration has been the question of transitional relief. Evidence shows that a transitional relief scheme would increase the rates bills of most small and medium-sized private sector businesses, which are at the very heart of our economy. Eight out of 10 properties that would have seen bills fall would be worse off. The retail sector alone would lose £25 million. Another consequence of a transitional relief scheme would be that the public sector would benefit at the expense of the private sector. Such outcomes are not desirable, so I have concluded that there will not be a transitional relief scheme to accompany the revaluation.

Given the fact that, after the previous revaluation in Scotland, the Government consulted on giving the business community and others an opportunity to express their views on the prospect of a transitional relief scheme, why did the Scottish Government choose not to do so on this occasion?

The Government chose not to do so because we looked carefully at the evidence, which demonstrated the factors that I set out in the comments that I have just placed on the record.

Following revaluation, the thresholds for payment of the supplement for larger businesses and for rural relief, which provides a vital lifeline to our rural communities, will both rise from 1 April. We will further expand the criteria for eligibility under the small business bonus scheme from 1 April to those who have more than one property, and whose cumulative rateable value is less than £25,000. That means that 3,600 more properties will be eligible for a discount on their rates bills.

To support the renewable energy sector, I am introducing a new targeted, stepped relief scheme, offering discounts of up to 100 per cent. Those reliefs, which are the most generous in the United Kingdom, will provide a real boost to businesses in Scotland. Information on individual property values is being released by the assessors today on their website. Details of relief schemes and a rates calculator will be on the Scottish Government website.

In summary, the total funding going from the Scottish Government to local government next year will amount to almost £12 billion. That is the funding that we have put in place to ensure that our local authorities are able to deliver the services that are expected by the communities of Scotland.

I move,

That the Parliament agrees that the Local Government Finance (Scotland) Order 2010 be approved.

If ever a speech from a Government minister confirmed the impression of many on the Labour benches that the Government operates in a parallel universe, we have just heard it from Mr Swinney. Here in the real world of Scotland in the third year of a Scottish National Party Government, The Herald newspaper can run articles for a whole week exposing the effects of the £270 million-worth of cuts that it has identified are being forced on our local authorities. In today's Scotland, our biggest public service union warns us of the dangers of the cuts that are being imposed on our front-line services because of the £305 million-worth of reductions in council budgets that it has identified.

The reality for many Scots as we move into the second decade of the 21st century is that local authorities are taking community wardens off our streets and reducing library opening hours and roads maintenance and resurfacing. In education, further cuts are planned in the number of teachers, classroom assistants, janitors, workshop technicians and cleaning staff. That is all at a time when the Scottish Government has nearly £1 billion more to spend than last year and greater resources than any previous Administration had.

That is the reality in today's Scotland, yet over in the alternative realm of concordat land that is inhabited by the SNP, all is well. In concordat land, the SNP can claim, despite all the evidence to the contrary, that its budgets have been cut while the funds that are available to local authorities are on the increase. In concordat land, the cabinet secretary wants us to believe that he has delivered a bountiful sufficiency of funds and that local government has been given the flexibility that it needs to respond to local needs. He wants us to share his view that the concordat creates greater flexibility, when the reality is that it restricts the single most important mechanism of financial autonomy that is available to local authorities: the council tax.

If I understand the member correctly, he is saying that the Scottish budget has gone up. In that case, as it is indisputable that the share of the Scottish budget that is being allocated to local government has also gone up, how can he accuse the Scottish Government of meanness in that respect?

Because the reality is that what is being counted has gone up, but the actual funds have not. The cabinet secretary has added funding streams to his calculations. His letters to the Scottish Parliament information centre show that there is no like-for-like comparison between the figures when we were in Government and his current calculations.

I have in front of me the like-for-like comparison, which shows that, when I became Scotland's finance minister, the share of the budget going to local authorities was 33.39 per cent and now it is 34.08 per cent. It has gone up under the SNP Government.

What the cabinet secretary is counting has increased, but the actual amount of money has not.

Freezing the council tax is not in itself the problem, but the way in which it is done under the concordat is Tory capping by another name. It is little wonder therefore that Mr Swinney's acolytes in the Tory party are always eager to support his budgets. Probably the only thing on which Labour agreed with the Tories about Mr Swinney's budget was that it was a Conservative budget.

If capping is somehow a Conservative principle, will Mr McMahon explain why the UK Government retains the ability to cap in England? That is still a Labour Government, is it not?

Because we want to retain the ability to protect local people. That is not the same as using the power when local authorities are being reasonable and responsible.

Last month's budget was not alone in being supported by the Conservatives as a Conservative measure. The fact is that we have merely arrived at a position that Labour forecast would happen under the terms of the concordat when it was set out in the spending review of 2007. As far back as that, the underfunding of new spending commitments, the unachievable doubling of efficiency savings targets and the loss of flexibility through the council tax freeze were evident and their consequences were inevitable. For the past two years, we have predicted the impact of the fiscal squeeze on councils and argued that, contrary to the efficient government agenda, budget savings were being made in front-line services.

While the Convention of Scottish Local Authorities sucked on the lollipop of de-ring fencing, under the concordat individual councils were being forced to cut services to achieve their savings targets over three years. Cash efficiencies were to be made through reducing back-office costs and bureaucracy, better procurement and better asset management. The concordat states that such savings should be redeployed

"against ongoing pressures and address local priorities."

Falkirk and Stirling Councils have both made savings in procurement and Glasgow and East Dunbartonshire have delivered some of their savings through property and asset management. In all authorities, however, the cuts will be deep and the impact on jobs and services will be severe. South Ayrshire reported that it needs to achieve a significantly reduced expenditure in employee costs by reducing the workforce to help find savings of £7 million and it has also agreed a 6 per cent rent increase. Highland has set a savings target of £11.45 million in education and £5 million in social work.

Michael Forsyth would be glowing with pride that his party has worked with the SNP to pursue the decimation of public services that he once dreamed of. Every community in Scotland will suffer because the SNP has done a deal with the Tories to launch the biggest assault on local services since Thatcher. The cuts will adversely affect jobs and services at a time when the economic recovery would benefit from retaining them. I look forward to the rest of this afternoon's debate, but I fear that, when it is over, some of us will be left to wonder whether we inhabit the same world as the cabinet secretary and the rest of his party.

Mr McMahon talked about a parallel universe—it might well be a parallel universe in which Michael Forsyth is glowing with pride at me and the other Conservative MSPs, but if that is the case, we will understand it better from Mr McMahon than from anyone else.

Some of the stuff that we heard from Mr McMahon is just utterly implausible. We were told that all local government's problems are somehow the fault of the Conservative Party, which is not in Government, or the fault of the Scottish Government. If we look at the broader issues that councils are facing, we all appreciate that throughout the country councils are facing reductions in their income from the usual fees and charges that they tended to rely on. Yes, they have a council tax freeze, but they are still funded to a greater extent than inflation requires to benefit from that council tax freeze. If we look at the cumulative figure across local authorities in Scotland, there is probably a net benefit to the tune of something like £45 million.

If, somehow, it is all the Conservative Party's fault that councils in Scotland have to reduce spending, I wonder why the Local Government Association in England issued a press release suggesting that

"Town halls are having to tighten their belts in exactly the same way as hard-pressed families are"

and that

"Council income is falling sharply at a time when more and more people are turning to the town hall to help people through tough times."

The Local Government Association in England said that

"A half of councils have already cut jobs ... and seven in ten anticipate making further cuts."

The Conservative Party has nothing to do with the Government of England and, unless before we came to the chamber the Scottish Government managed to annex England and Mr Salmond took his ambition to a true unionist level by becoming First Minister of England as well, it is rather difficult to see how the Scottish Government can be blamed for the problems faced by councils south of the border.

What we have heard from the Labour Party is a repeat of the tirade that we heard last week about how councils are short of money. Last week Labour members of course had no suggestion about where the money should come from. That is ironic, because one would have thought that the first stop that they would make to find that funding would be the Labour chancellor at number 11 Downing Street. He, however, is busy talking about funding cuts of 17 per cent in real terms. It is difficult to see where the Labour Party expects all the extra money to come from. Perhaps we will hear now that Mr McMahon has risen.

Does Mr Brownlee accept that we do not expect it to come from anywhere, because the Government already has it? There is an extra £1 billion in the Government's coffers this year, but it has chosen not to spend it on the right priorities.

In that case, perhaps the member can tell us which priorities he does not support getting that money. I did not hear the Labour Party say last week that the national health service, the transport system or anything else should get less money. What the member says is brazen; it is the cheapest form of political game, it does not fool the public and it is pathetic.

When we look at the situation facing councils, we all acknowledge that they face difficulties in their forward planning and that, in common with the rest of the public sector, councils will have to make some pretty difficult decisions. Of course, that is because of the truly legendary scale of the financial incompetence of the Labour Government that is sitting in office at Westminster—a fact that conveniently passes by the Labour members in the chamber. It beggars belief that, at a time when the UK Government is passing blame to all and sundry, Labour members are happy to stand up and spout the sort of nonsense about cuts that we have heard this afternoon.

I thank the member for taking an intervention. As I understand it, the Conservatives will vote for the local government finance order tonight. We accept that there are difficult times ahead, but my concern is that we have the lowest ever funding settlement per head of population. If the Conservatives vote for the settlement, they will be supporting the worst ever funding settlement for Aberdeenshire Council.

If I am correct, what we will support this evening is the same allocation methodology that was used by the Administration of which Mr Rumbles was such a fervent admirer. There is a particular issue about whether the allocation methodology is fair. As I have said before, the recent review was not sufficiently impartial; it excluded issues such as rurality, which, in the case of Aberdeenshire, probably would be beneficial. I accept that the current allocation formula is not necessarily perfect. I also accept Brian Adam's point that for as long as COSLA is involved we might not get much progress on that. The allocation formula is one issue. The sum of money is the issue that the Labour Party has raised. Both are to some extent false issues.

I turn to the news on the road fund, which local authorities will welcome. I would welcome clarity on how, specifically, it will be allocated to local authorities. I am particularly grateful for the news about the business rates relief for multiple properties, which is an issue that I raised in last week's debate on the budget. Progress has been made, particularly in relation to the business rates announcement today.

If we are honest about the future funding of councils and every other public sector organisation, we will acknowledge that there are very tough times ahead. Rather than try to pretend that we can magic money out of thin air, it would be much better if we focused on how we allow local authorities and other public bodies to deal with the constrained times that are inevitably coming.

Given our discussions with local government colleagues about setting their budgets for the coming year, we all know the difficulties that they are already facing in council chambers and local services. Similarly, we all know that the difficulties will continue. Indeed, we know that they will get considerably worse.

That is why the cabinet secretary's tone today was substantially different to that of his speech of two years ago, which I reread in advance of the debate. Today, there was scant reference to the brand new relationship with local government. I am not even sure that we heard any references to the concordat.

Historic concordat.

As my colleague points out, we now know that it is genuinely a historic concordat. Times have changed.

Mr Purvis is always very proper about the record and I would not want him not to properly recount my remarks. He will know that I said that the Government works in partnership with local authorities at local level. That is how this Administration started out and how it intends to carry on.

For a moment I thought that the cabinet secretary was about to say, "and that is how this Administration will end." As we have seen from class sizes and a number of other areas, I think that it probably was going in that direction. The former Cabinet Secretary for Education and Lifelong Learning carried on the same narrative, which ended with her threatening the removal of local power.

The context that we see is a financial context. The information with which the Parliament is provided by its independent information centre, SPICe, is interesting and helps us to understand exactly the position that we are in. What the Government did not say is that, in real terms, the combination of revenue and capital increase for the coming year is 0.02 per cent. That is in a year where there has been real-terms growth of considerably more than that in the Scottish Government's budget—of course, that is recognising the change in the profile of accelerated capital.

The SPICe briefings are very clear. I read with interest the cabinet secretary's supplementary evidence to the Local Government and Communities Committee's consideration of the budget. The SPICe information, which looks at outturns and published budget figures, is, in my view, the authoritative view on the share of expenditure in this spending review period.

For the spending review period that covered 2005-06, 2006-07 and 2007-08, the outturn figures show that local government's average share of the Scottish budget was 34.2 per cent; whereas the average budgeted share from 2008-09, 2009-10 and 2010-11 is 33.8 per cent. That is a fair comparison of the Government's priority in the current three-year spending review period with that of its immediate predecessor. The difference is shown by a reduction from a share of 34.2 per cent before to 33.8 per cent now.

Are those statistics academic? They are not, because we know that they reflect directly local government's ability to deliver in the context of an overall budget that is growing this year. The cabinet secretary's supplementary submission gives the game away—he repeated what that submission says today. He uses as a comparison a baseline in 2007-08 that was increased by £172 million, which includes funding from which ring fencing was removed. That allowed the Government to say to local government when it signed the concordat that local government's share of the overall pot had increased.

The reality for our constituents is that we know that cuts are looming and that 11 local authorities will experience a real-terms cut in their budgets for the coming year. That will have a direct impact on local services. To an extent, that will be offset by charge increases. The Government never mentions that one option that is at local government's disposal is to increase charges on the most vulnerable in society.

I will describe another alarming aspect of what the Government has said today. As a result of the rates revaluation exercise that is being done, 40 per cent of businesses expect an increased rates bill, but the Government has decided not to have a transitional scheme for businesses that face increased bills from April. Members have probably been lobbied today—that would be no surprise—by retailers and others that know only now, in February, that businesses will have increased bills but no transitional mechanism in the new financial year.

When I challenged the cabinet secretary about that in December, he said that the situation in England and Wales was different because a transitional scheme is a statutory obligation there, whereas such a scheme is not required in Scotland. Before the previous revaluation exercise was completed in 2005, the previous Government consulted from June 2004 on what the business community wanted in any transitional scheme. One proposal was phased introduction of any increased bills. However, without publishing any information, any analysis of the increase or any assessment for the Parliament of the types of businesses whose bills might increase, the current Government has said simply that no transitional scheme will be introduced. As we still do not know whether we are coming out of the recession, that is not the type of response that we should have from the Government.

In many respects, it is understandable that the Government's tone has changed considerably from the bravura of previous years. If anything this afternoon gives us considerable concern, it is that businesses still do not know the position on the increased bills that they will face from 1 April.

I approach the debate on the Local Government Finance (Scotland) Order 2010 with a heavy sense of realism. I hope that we as a Parliament can unite at decision time to approve the order. In doing so, we must all face up to the reality that a combination of UK Government cuts to Scotland's budget and the general fallout from a recession from which we are starting to emerge only now is having a serious impact on public spending. To deny that is to hide from reality. Scotland's Parliament has £814 million less to spend than was initially estimated for 2010-11. That is fact.

Will Bob Doris refer to the SPICe document? He said that the Parliament has about £800 million less at its disposal. To be accurate, he knows that more than £300 million of that is spending that the Government chose to accelerate. If he wishes to be accurate, let us have some accuracy in the chamber.

The member made exactly the same intervention at exactly the same point in a previous debate. Indeed, Jeremy Purvis agreed with that capital acceleration because of the recession. We need a proper political debate on the £814 million less that we have to spend. Many people are in denial about the issue. My next comment was aimed at the Labour benches but, given the pièce de résistance that is Mr Purvis on the Liberal Democrat front bench, I will instead aim it at him: arguments such as his make people look very foolish indeed.

Within the context of a shrinking Scottish budget, it is heartening to see a larger share of the spending cake being given to councils than was the case in previous years. This is the third consecutive year under this Government that that has happened. Over the past three years, under the Labour and Liberal Democrat Executive, the figure went down, down, down.

It is, however, fair to say that, even given the average real-terms increase to councils of 1.4 per cent, there are difficult times ahead for local authorities. The increase is not brilliant but, given the current financial predicament, it is not bad at all. In particular, modest—at best—budget increases are to be expected in future years. That will lead to challenges for local authorities, including my own in Glasgow.

I could put the boot into Labour-controlled Glasgow City Council by going on about the mass closure of primary schools or Steven Purcell not believing in lower class sizes, but I will, instead, look at things from another angle. Councils plan their budgets over the medium term; they must take the decisions that they feel are right for them. That is what Glasgow City Council is doing, even if I disagree with its actions. One decision that it has taken on which I agree is its democratic decision to—once again—freeze the council tax. The people of Glasgow welcome that, as will people across Scotland, hopefully in every local authority area. That is what will be achieved this afternoon if we vote for the order.

During such hard-pressed times as these, the council tax freeze is particularly welcome. Over a three-year period, it amounts to £160 million in people's pockets, once baselining of the £40 million per annum is accounted for. That is very welcome indeed.

I turn to Derek Brownlee's speech and his point that the funding distribution mechanism under the Scottish Government is identical to that of the Labour-Liberal Democrat Executive. If different MSPs in different parts of the country are not happy with the settlement in their area, they should come to the chamber and say how they would unpick it. They would have to tell us which part of the country they would take money from in order to give money to their area.

This is a fair budget settlement for local authorities. It is rising in real terms and local authorities are getting a larger slice of the spending cake than ever before. I am sure that we will come together to support the order at 5 pm.

I will focus on two crucial issues—distribution and priorities—both of which are increasingly important as budgets get tighter. Michael McMahon spoke of that earlier.

On 26 November, I asked the cabinet secretary why Edinburgh was getting a revenue increase of 1.76 per cent when the Scottish average was 2.9 per cent. He gave an impeccably technical answer, as he does. That kind of gap did not matter in years gone by. For example, five or six years ago, if the Scottish average was 6 per cent and Edinburgh got 5 per cent, it did not matter too much. That said, we have to accept that, as budgets get tighter, the floor arrangements for revenue distribution must be looked at again. Before Bob Doris gets to his feet, I say to him that the suggestion would also benefit Glasgow. Edinburgh and Glasgow are the only two mainland local authorities to get an increase of less than 2 per cent. The issue is serious and it will become even more critical as budgets get tighter. The issue is particularly important for Edinburgh, which has the fastest-growing population in Scotland.

Of course, the problem is compounded by the council tax freeze. Edinburgh is getting a cash increase in revenue of £14 million this year, half of which—£7 million—is to cover the council tax freeze. In effect, the cash increase for Edinburgh is less than 1 per cent. The distributions have to be looked at again in light of the new financial circumstances. That has happened in the health budget. Under the new formula, NHS Lothian is owed many millions of pounds because the Cabinet Secretary for Health and Wellbeing has slowed down distribution to health boards to a crawl. She puts forward reasonable arguments for doing so, but the issue must be looked at again in the area of health and local government.

Within the money that is allocated, the council has choices. I commend the budget that the Labour opposition in Edinburgh will present tomorrow, which is designed to protect schools and other front-line services. Many organisations in my constituency such as North Edinburgh Childcare, the Pilmeny Development Project, Granton Information Centre, the North Edinburgh Trust and others would be protected by the Labour shadow budget; unfortunately, the Labour group is not in control, but it has made its priorities clear. The Scottish Government should also have a view on its priorities for local government and a mechanism for delivering them. During the budget process, we heard a great deal from the Cabinet Secretary for Finance and Sustainable Growth about protecting front-line services, but talk of protecting such services without a mechanism to do so is meaningless.

I want to focus on education, although that is not the only service that is affected. As all of us know, and as Iain Gray pointed out at First Minister's question time last week, many local authorities in Scotland face real-terms cuts in education spending. There has been a great campaign in Edinburgh, so the threatened cuts to school budgets next year of 2.5 per cent have been reduced to 1 per cent, but over the past few days I have spoken to parents and headteachers in my constituency who believe that those cuts will still have a profound effect on their schools. In fact, there are other hidden costs, such as the devolved budgets for heating, waste and maternity holiday pay, for which there are overspends at city-wide level that schools will have to pick up. The Government must find a mechanism to ensure that local government prioritises schools because, as I have said several times in the past few months, nothing is more important to the future of Scotland than the education of our young people. As budgets get tighter, it will become increasingly important for the Government to decide what its priorities are and to find a mechanism for delivering them.

My time is nearly up, so I will make two final points. First, I know that the Scottish Government and the City of Edinburgh Council have discussed tax increment financing. I would welcome an update on those discussions, as such financing would help infrastructure development at the waterfront in my constituency. Secondly, two or three weeks ago, the City of Edinburgh Council raised with me the problem of private sector housing grant coming as capital. That has been resolved for this year, but it would be good if in future years private sector housing grant could come as revenue. It could then be used for the private sector leasing scheme that is essential for Edinburgh to meet its commitments on homelessness.

I am happy to speak in the debate, because the relationship between central and local government is fundamental to democracy. I am sure that I can count on agreement from the chamber on that point, although perhaps not on other matters. Over recent years, the relationship has become unbalanced, with central Government taking into its power more and more functions that were previously exercised locally. The result has been a double negative whammy, with central Government becoming overburdened and unable to cope efficiently with the responsibilities that it has taken on, while local government has become emasculated and seemingly more and more irrelevant to the daily lives of those whom it purports to represent.

Local government should be important. Only people who live locally can fully appreciate local circumstances or judge fairly between competing local priorities. I am delighted that the SNP Government has recognised that fact and entered into a concordat with local authorities up and down the country, partially restoring to them decision-making powers that should never have been taken away in the first place. I look forward to more such powers being handed over in the years to come, so that once more residents of a city, town or small burgh can see the relevance of casting their votes to elect councillors who will make such decisions wisely.

Of course, there are pitfalls in that transfer of responsibility. Instinctively, we shy away from postcode differences in services—after all, we all live in the same country and pay the same taxes. However, if we are truly to allow local decision making we must be adult enough to accept that that will result in variations and to live with the consequences. Local councils must be free to allocate their funds as they see fit, without central interference. That is one good reason for central Government to avoid exercising undue influence.

I understand the thrust of what the member is saying and why he is saying it, but does he feel that a single outcome agreement cannot be put in place until it is signed off by a minister? Is that consistent with what he is saying regarding local freedom of decision making?

I am grateful to Mr Purvis for raising that point. We are on a journey, and we have not reached the end of it. Over many years, more and more decisions were taken away from local authorities; we are in the process of restoring that decision making, but that in itself is a gradual process involving co-operation between central Government and local authorities. That journey will continue for as long as this SNP Government is in office—which I am sure will be for many years to come, as Mr Purvis will be pleased to hear.

It is no exaggeration to say that we are on the verge of the biggest enforced cutback in public spending in recent memory. Difficult decisions have to be made and there will be unavoidable pain, but I am proud of the steps that the SNP Government has taken to protect people from the worst of the cutbacks and to help very small businesses survive the downturn, because small businesses will form the backbone of a future recovery.

We are freezing the council tax once more. Today, around 150,000 small to medium-sized businesses are eligible for rate relief of up to 100 per cent. Local government's share of the Scottish budget has risen—I am certain—in percentage terms every year since 2007, reversing a decline over the previous four years.

However, the Scottish Government is not insulated from financial management decisions—or, should I say, financial mismanagement decisions—that are taken at Westminster. Although it is true that there has been a global downturn, the effect on the United Kingdom has been far more severe than in most other western countries, due to imprudent management of the economy in the good years. While Scotland remains a part of the United Kingdom we must share the consequences of that.

The increase in the departmental expenditure limit for Scotland has plummeted over the past year, and worse is to come. Unlike in England, where Alistair Darling has cut the communities and local government budget by almost £3 million, the SNP Government is looking after the interests of local government in Scotland.

I commend the Local Government Finance (Scotland) Order 2010 to the Parliament.

For me, sadly, this debate is a case of déjà vu. I stood in the chamber nearly a year ago and asked the cabinet secretary to sit down again with local government representatives and negotiate a new deal to replace the concordat. The local government settlement for 2010-11 continues the underfunding of the concordat, and it will bring with it further job losses and service reductions. We know that the £70 million of funding for the council tax freeze was, and is, not enough to fund all the commitments that are expected of local government. The cabinet secretary's claim to have protected front-line services is hollow indeed.

The Scottish Government's inability to respond to the recession is wreaking havoc on councils throughout Scotland. The Government's refusal to accept that, by freezing council tax for the third year and using local government funding as an incentive, comes at a very high cost. Those who favour a council tax freeze say that it saves people money, but it is regressive: people who live in band G homes, who can afford to pay more, save more than those at the bottom of the scale, but the impact of service cuts is greater on the poorest in society. For councils, it removes a vital income stream, which could be spent on the services and jobs that they should be delivering.

If every council in Scotland had a council tax increase in line with inflation, how much does the member think would be raised?

I am delighted that Mr Brown has asked me that question. By my calculation, it would be about £70 million—the same as the fund that was set aside by Mr Swinney for the council tax freeze.

Will Mr Whitton give way on that point?

I am always delighted to give way to Mr Swinney.

Unless I am missing something, does that not mean that we have heard confirmation from Mr Whitton that the council tax freeze is fully funded by the Scottish Government?

No, it does not. The council tax freeze that the cabinet secretary is talking about—£70 million—equates to about 3.2 per cent, as I understand it, although the cabinet secretary may wish to stand up again and correct me if I am wrong. If I am wrong, I will of course correct that.

Mr Whitton tempts me. I have not seen the figure today, but the rate of inflation was below 3 per cent last month, so clearly the Government is fully funding the council tax freeze.

Yes, but the cabinet secretary has not taken account of efficiencies. We could bandy figures around all day. Suffice to say that the cabinet secretary thinks that he is right, I think that I am right and Gavin Brown thinks that he is right—someone else has got it wrong and it ain't me.

The council tax freeze is not the only issue; the level of funding for the freeze needs to be reconsidered. As Mr McMahon said, Unison estimates that councils face a cut of about £300 million and the loss of 3,000 jobs during the coming year. It is not the better-paid public servants who will be hit hardest; the care assistants who treat people in their homes and the learning assistants in our schools could be first to lose out. Unison says that the big departments—social work and education—will bear the brunt of the cuts. Is it right that the people who care for some of the most vulnerable people are the first in line for the dole queue?

Mr McMahon ran through a list of councils that face difficulties, and I will consider others. Aberdeenshire Council, which Mr Rumbles often mentions, has said that the council tax freeze could not be maintained on an on-going basis. That view is shared by Dundee City Council, Falkirk Council, Highland Council and South Ayrshire Council, which said that the council tax freeze is not sustainable and reduces local authorities' flexibility in relation to the generation of funding. In their joint submission, the councils went on to say:

"Extending the council tax freeze will require additional funding to be allocated by the Scottish Government".

The councils made those comments in September, but did Mr Swinney listen? He did not, and local authority staff throughout the country are paying the price with their jobs. Labour-led East Dunbartonshire Council—my local council—will have to cut £20 million from its budget during the next three years, on top of £8 million this year. Council leader Rhondda Geekie predicts protests and placards, but she has no way out. The £5 million for road improvements that the cabinet secretary announced is welcome, but it is not nearly enough. We could probably spend that on the roads in East Dunbartonshire alone.

The Scottish National Party Government cannot ignore the fact that the concordat is now not working—those are not my sentiments, but those of Brian Adam, the SNP's chief whip. He demanded an independent review of the funding formula when he spoke to The Press and Journal in November. He said:

"People, including myself, will be bitterly disappointed this review of the distribution formula has in essence seen no change to the way money is shared between local authorities."

Mr Swinney has demonstrated his stubbornness, for example by refusing to change his mind about the Glasgow airport rail link. If he does not listen to Mr Adam and SNP councillors throughout Scotland, I fear that he will live to regret it.

The Local Government Finance (Scotland) Order 2010 allows local councils around Scotland to pass their budgets. Local services cannot be planned and we cannot pave the way for the funding that is needed for the council tax freeze unless the order is approved. I do not know what stance parties will take on the order when we vote on it at 5 pm. Parties have a perfect right to block the order, if they are prepared to explain their position to apoplectic local authorities up and down the country. They might of course try to justify a delay by pointing to amendments to the budget that they still hope will be made, but no amendments have been proposed that would actually reallocate money in the budget. It is to be hoped that the sweet voice of reason has prevailed and that any discordant voices in the Parliament have been smothered under the burden of John Swinney's reasonableness.

However much some members argue that black is white, night is day and Scotland's budget is going up and up, everyone knows that the Scottish Government has more than £800 million less to work with than was initially advised. That makes the commitments on local government in Mr Swinney's budget all the more significant. Despite Mr Swinney having significantly less money at his disposal this year than was originally intimated by the London Government, and despite undertaking to protect the health budget, the Scottish Government has devoted a greater share of its resources to local government than was allocated last year.

As we heard, the previous Executive cut the share of the budget that went to councils year on year, whereas the Scottish Government has increased the share every year. As others have pointed out, the allocation for local government for 2008 to 2011 is 12.9 per cent up on that for 2005 to 2008. However, perhaps a more significant point than all those figures is the fact that the Government has brought to an end a generation of micromanagement of council finances. Ring fencing in its old form is passing into history. When even Mr McMahon acknowledges in Holyrood Magazine that Labour has

"lost the argument on ring fencing",

we know that it has finally been accepted that a healthier balance of power must exist—and does now exist—between Scotland's local and national Government.

The Local Government and Communities Committee, on which I serve, acknowledged that fact in its report on local government finance. As is right, the report makes no attempt to minimise the serious strains under which local government, like national Government, in Scotland finds itself or the difficult choices that councils will face in determining what they can do over and above their statutory duties in the lean budget settlement years that lie ahead for Scotland.

The report, which followed an inquiry that took evidence from councils throughout Scotland, calls for a fundamental review of the expectations of local government. It calls for local government to be ambitious in spite of the pressures and talks about benchmarking rather than just achieving minimum standards. It also examines the issues around the sharing of services. The obvious way to share services in remote and rural parts of Scotland such as my constituency is surely not for councils to get bigger, but to share some of the parallel bureaucracies that exist with, perhaps, health boards in the same small place.

The order, like the committee report, acknowledges that councils deserve support. Despite Scotland's declining budget and the pressures from another place that face Scotland, it seeks to give councils that support and I support its approval.

I speak against the funding settlement for local authorities in Scotland, particularly because of the unfair settlement for Aberdeen City Council, which receives only 84 per cent of the national average funding support. Total funding per individual is just over £1,680; in Glasgow, the figure is more than £2,420 per individual. That creates a funding gap of more than 44 per cent.

Do the Liberal Democrats in Aberdeenshire Council support Aberdeen City Council's complaint in that respect?

Aberdeenshire Council supports a fair funding formula of exactly the sort that I am about to describe and finds it equally aggravating that Aberdeen would receive more than £155 million more each year—a staggering figure—if it received the same average per head as Glasgow.

I ask Nicol Stephen for a bit of clarity: how much less money would the Liberal Democrats give Glasgow? I will be sure to let my constituents in Glasgow know.

As Bob Doris knows, there is a funding floor in the formula, whereby not only millions but tens of millions extra are pumped to Glasgow each year. Let us consider not only Glasgow, but the Scottish average: if Aberdeen City Council was to receive that, it would receive £66 million more each year.

My point is simple: basic services—such as education and social work—require core funding and, if that funding falls below a minimum level, particularly for a sustained period, it will have the most severe consequences for council services. That is what we now see in Aberdeen, where unacceptable cuts are causing real pain and anger. Every week, Aberdeen City Council's budget crisis is in the news—not only is it in the local or regional news, but it regularly leads the Scottish national headlines. There are cuts in schools and social work, cuts for carers and cuts in services for the elderly, the disabled and children. Further major real-terms cuts over the next three years will hammer Aberdeen City Council even harder.

For the past two years, Aberdeen has suffered funding of below 85 per cent of the national average, which is set to continue with the poor settlement for 2010-11. Today, I am campaigning for a funding floor for all local authorities to ensure that every council gets at least 90 per cent of the average Scottish funding. The members who intervened on me earlier should be aware that I have broad support for my campaign. Indeed, as has been said, Scottish National Party members are concerned about the funding situation for Aberdeen and the north-east and would support a formula of the kind I suggest, which would give Aberdeen an extra £25 million a year and similarly benefit five other councils: Edinburgh, Aberdeenshire, East Dunbartonshire, East Lothian and Perth and Kinross. Instead of that, though, we get precisely nothing.

The First Minister said that he would not leave Aberdeen in the lurch. John Swinney signalled that he favoured a significant review of local government funding, and some councils have repeatedly referred to that review as some sort of totemic, groundbreaking golden breakthrough. However, we have achieved precisely nothing.

We have seen that, through the actions taken to introduce additional support for the City of Edinburgh Council, its funding increased both last year and this year. It can be done, if there is a will to do it, but the cabinet secretary lacks the will.

In Aberdeen, the cuts are now acute and the damage to services is unacceptable. That is why I will vote against the order at decision time.

We move to winding-up speeches. I call Alison McInnes; I can give you just over four minutes, Ms McInnes.

Thank you. I am disappointed that we have had such a short debate this afternoon.

Councils deliver valued services to our communities, week in and week out. However, as we have heard during the debate, all councils face significant pressures this year and next. The total allocation declines in real terms for 11 local authorities this year. We have heard about cuts to valued services and a significant reduction in workforces. Of course, the loss of a great deal of experience and knowledge goes with that.

The recession has meant a reduction of income for councils and added pressure on social services. Additional unplanned expenditure in dealing with the exceptional winter weather and its aftermath has compounded the difficulties that councils face this year. The £5 million that Mr Swinney announced this afternoon is welcome, but I would be interested to know whether it will be distributed in proportion to the road mileage that each council is responsible for.

This time last year, the cabinet secretary assured me that he would initiate a review of the distribution methodology. I had high hopes that we would see a fairer and more transparent settlement this year. Sadly, that is not so, and I am utterly disappointed that the cabinet secretary did not grasp the opportunity to secure a modernised and transparent grant allocation process; instead, he has allowed the status quo to prevail. The fact that we have always done something in a particular way is not a sufficient reason to keep doing it, particularly if it is patently unfair.

Several councils felt let down by the cabinet secretary's refusal to modernise an outdated allocation system. I have long argued—and will continue to argue—that the indicators that are used to calculate council funding are no longer fit for purpose and must be reviewed. New criteria should target the main areas of spending needs in councils and use indicators that are intuitively, as well as statistically and logically, valid. For example, they could take into account population, deprivation, the number of people over 85, the number of school pupils, sparsity and road length. I welcome Malcolm Chisholm's conversion to the cause.

I stand to be corrected, but I am pretty sure that all those factors drive the distribution formula.

Indeed, those are some of the factors, but the problem is that there are just so many distribution factors—around 120 of them.

As we know, Mr Swinney chose to accept without question COSLA's view that everything is hunky-dory, then he rubbed salt into the wound by refusing to recalculate the distribution of previously ring-fenced funding. It is absurd to agree on the one hand that the preferred option for distributing any new funding should be the agreed distribution formula, while saying on the other hand that the preferred system should not be used in the future to allocate previously ring-fenced moneys more fairly.

What is to be done, therefore, to help councils such as Aberdeen City Council, which face the kind of problems that Nicol Stephen outlined? The gap between the best-funded council and the poorest-funded one is far too great, given that they all have statutory services to deliver. Setting aside the special case of island councils, the range goes from 123 per cent down to 84 per cent. Does the cabinet secretary agree with his colleague Brian Adam that such a difference between the lowest and highest rate support grants for mainland authorities is distinctly anomalous? I think that that is putting it very politely.

I support Nicol Stephen's calls for a safety net for the poorest-funded councils. The Government must introduce a funding floor below which no council should fall—for example, a funding level of 90 per cent of the Scottish average per head of population. There used to be only a couple of councils in that category, but Aberdeen City, Aberdeenshire, East Dunbartonshire, East Lothian, the City of Edinburgh and Perth and Kinross councils all now receive less than 90 per cent of the Scottish average. I urge the Government to look at the matter again.

Across Scotland, the council tax freeze seriously hinders the financial autonomy of local authorities. It deprives them of almost all discretion to raise local revenue for services in their area. Equally, decision making is constrained by pressures to deliver uncosted and unrealistic SNP manifesto commitments. That is not valuing but devaluing local government. Mr Swinney said that local government works in partnership with his Government; I wonder whether instead it works under pressure from his Government.

I will not block the order today as councils need certainty of funding, but I am deeply disappointed.

This is a difficult debate at a very difficult financial time for councils throughout Scotland. Yes—there is a cash-terms increase in the revenue budgets of councils and, as the Government says, there is an increase in the overall share of the budget that is going to local authorities, but that does not mean that there is not a great deal of pain.

In the overall real-terms revenue and capital budgets for councils, the position is pretty much static. Jeremy Purvis made the fair point that the official figure is a 0.02 per cent increase in real terms, which must be borne in mind.

The difficult fact is this: in order to give more to local government, any party or MSP must explain clearly where the money will come from. About a third of the Scottish budget goes to local authorities and about a third goes to health. Will anyone propose taking money from health? In the other third, we have funding for finance and sustainable growth—which includes transport—justice and education. Any party that wants to increase the amount of money that is going to local government has to be specific about where it will come from. Perhaps the settlement is not a great deal for local government but, from where we are standing, it would be difficult to propose a better one.

Councils are not funded only by central Government. They also have council tax collection, but we must consider what has happened to that during the downturn. As Derek Brownlee and others have pointed out, they are also funded by the various fees and charges that they make on residents and people who visit their council areas. There is no doubt that they are facing a shortfall in collections from fees and charges. In planning, for example, the number of applications has dropped substantially, so income that councils might have expected to receive from planning is simply not going to materialise. There is a legitimate debate to be had about that.

Mr Brown asked me a question earlier about inflation. Does he agree that, if the £70 million that the cabinet secretary has for local councils was given to them and they then got an additional £70 million or so by raising council tax in line with inflation, that would relieve some of the pressures that he is talking about?

That would give the councils an extra £70 million, but it would put increasing burden and pain on the hard-working families across Scotland who pay council tax. I am pretty sure that residents in David Whitton's constituency would not thank him for suggesting that council tax increases should happen in his local authority.

We have nailed one of the myths today—that the council tax freeze is somehow a bad thing. The Labour Party has said that it is regressive and that it leads inevitably to cuts in council services. Labour members may say that it is regressive, but they did not seem to have any difficulty with the VAT decrease—a tax decrease that allows the person who buys a Lamborghini, for example, to get much more cash back in hand than people who buy small electrical goods in a shop. That tax cut was somehow not regressive, in the Labour Party's analysis.

We have also put to bed the myth that the freeze leads inevitably to cuts: David Whitton suggested that if council tax were increased in line with inflation, that would raise £70 million—the exact sum that is given to councils for agreeing to a council tax freeze.

We welcome various items in last week's budget and today's announcement by the cabinet secretary. The lower poundage rate for businesses is to be welcomed. It is vital that we have, at worst, parity with the rate south of the border. It would be nice if we had a lower rate than England's, but it certainly should not be any higher.

We also welcome the increase in the threshold for the small business bonus scheme that was announced last week, which will go down well in constituencies across Scotland, and we welcome today's announcement about business rate relief on multiple properties that have a combined rateable value of up to £25,000. I think that the cabinet secretary suggested that about 3,600 properties across the country would benefit. We look forward to seeing the detail. For those reasons, we will support the order at 5 o'clock.

We have listened to the Government tell us that we have a local government finance order that represents a good deal for our local authorities and public services. Jeremy Purvis was right to point out that the cabinet secretary's remarks on the order were delivered in a much more subdued manner than usual.

The cabinet secretary is regularly held up by his leader and his back benchers as some kind of financial wizard who has overcome the financial deficit that was imposed on him from London to deliver a favourable package of funding to our councils. I do not know whether Mr Swinney dabbles in magic, but he has certainly conjured up the loss of 3,000 jobs with his funding package. No amount of magic will hide the fact that education staff cuts will affect teachers, classroom assistants, janitors, workshop technicians and cleaning staff. Local authorities have already made that clear. I do not know what tricks the cabinet secretary thinks he can deploy to hide the impending reductions in library opening hours, in grass cutting, in recreation centres and in grants to voluntary organisations, or what sleight of hand he intends to use to make the cuts in road maintenance, resurfacing, salting and gritting and other parts of transport budgets appear to vanish. A cloak of £5 million will certainly not hide them.

The settlement that has been announced today will hamper economic recovery, because it will result in the loss of jobs and services when the situation demands that we do what we can to protect jobs and services in order to avoid further recession. Local government finance has become another victim of the Scottish Government's inability to respond to the recession. Since the signing of the concordat in 2007, a global recession has occurred, but the SNP has not changed local government finance to take cognisance of that fact. At the same time as being hit by an upturn in demand for the services that they provide, local authorities have experienced a loss of income.

In the light of his comments, will Michael McMahon explain why the Labour Party did not lodge an amendment to the budget that would have resulted in local government receiving more funds?

If Mr FitzPatrick had spent any time in the chamber listening to the debate before he made his intervention, he would have heard that explanation. He can read it in the Official Report.

More and more local authorities are publicly stating that the council tax freeze is increasingly unsustainable, but today's settlement continues the underfunding of the concordat, so further job losses, service reductions and increases in charges will result. As David Whitton said, the finance secretary's claim that he has protected front-line services is therefore extremely hollow.

The evidence is clear. Cuts have been made in front-line service budgets, as well as in back-office functions and bureaucracy, that go well beyond the assumptions that the minister made in setting his efficiency targets. The reality is that councils report that they are having to make reductions in excess of £270 million simply to balance the books and deliver the council tax freeze. As was reported in our newspapers this week, that freeze will allow someone like Alex Salmond to make a saving of £316 and someone like Nicola Sturgeon to make a saving of £336; Mr Swinney will make a saving of £272. At the same time, pensioners across the country face increased charges for services.

Is that why Glasgow City Council froze the council tax without any support from the Government?

Glasgow City Council made sensible decisions. It balanced its budgets and has other ways of doing things. It will do that again in this financial year.

The reality is that local authorities have had it impressed on them by the concordat that the flexibility that they require in order to make judgments in their local areas has been removed from them. Glasgow City Council did not need the concordat to freeze the council tax. It made sensible decisions prior to the Government's coming to office.

I know that Mr Brownlee wants to get back in. I would be happy to let him do so, but I have made my point, which he cannot answer.

In almost every debate, Scottish National Party back benchers have been dragooned into action armed with their central office briefings and their blind loyalty. This afternoon, they have gone into battle to defend their Government, regardless of evidence that shows that they should do the contrary. We are talking about the only deal that is available—that is probably the only thing that I agree with Mr Allan about. Local authorities cannot be denied the available money, even if we fundamentally disagree with the budget that has been set for them.

No amount of sophistry from the SNP can hide the fact that Scotland's local authorities are making real cuts. They are Mr Swinney's cuts. Labour will spend the next year ensuring that every pensioner who has to pay for their services, every council employee who loses their job, and every young person who is denied an opportunity to reach their potential knows that the SNP Administration is to blame for that reality.

The distribution formula has been discussed. In her summation, Alison McInnes said that the formula should reflect areas' population, deprivation, rurality, road lengths, school population and over-85 population. For the record, I confirm that population is the key driver of the distribution formula, that different age bands are distinguished to reflect the circumstances that Alison McInnes correctly highlighted, and that deprivation, ruralilty and road lengths are taken into account. That clarifies the question about its content.

My point—which perhaps I did not make clearly enough—was that the distribution formula needs to be simplified. More than 100 indicators are used. I suggested the key indicators that should be used and that they would deliver a fairer settlement.

Okay. The point is made.

In a sense, that brings me to points that Nicol Stephen and Mr Rumbles have advanced. Mr Chisholm made a similar point from a slightly different perspective. On behalf of his constituents, Mr Chisholm expressed his concern about the level of increase for the City of Edinburgh Council that has been generated by the distribution formula. The self-same formula is delivering a revenue increase of 3.41 per cent for Aberdeen City Council and a revenue increase of 3.45 per cent for Aberdeenshire Council, compared with a total increase of 2.93 per cent in Scotland. I advance those facts simply to highlight the fact that, within the distribution formula, there are clearly allocation differences that are driven by the indicators—I refer to the point that I made to Alison McInnes. In some circumstances—for the north-east authorities, for example—it is driving a percentage increase that is higher than the Scottish average. In Mr Chisholm's constituency, the increase is below that.

The minister is missing the point. With a figure of 87 per cent of average funding per head of population, Aberdeenshire Council has the lowest-ever settlement. How far is the cabinet secretary willing to let it go down?

The positions of Aberdeenshire Council and Aberdeen City Council in the funding level rankings have not simply happened overnight; rather, they have built up year after year with the application of the distribution formula by an Administration of which Mr Stephen was a prominent part and of which Mr Rumbles was an enthusiastic supporter.

I thank the cabinet secretary for correctly distinguishing between what the Liberal Democrats and I have said, but does he accept my point that the floor on annual increases should be considered as budgets get tighter? As I have pointed out, that would benefit Glasgow City Council as well as the City of Edinburgh Council, as they are the only mainland authorities with increases of less than 2 per cent this year.

The floor is revisited as part of each spending review to ensure that we take those circumstances into account. That will certainly be the case in relation to the setting of the floor in the distribution formula for the next spending review.

I want to correct a point that Mr Stephen made. If I picked him up correctly, he said that Glasgow regularly gains from the floor: however, Glasgow has not gained from it in any financial year in the spending review over which I have presided.

Mr Chisholm asked for an update on tax increment finance, or TIF. The discussions between the City of Edinburgh Council and the Scottish Futures Trust are going well. They are constructive, and we hope to be able to advance a scheme. I assure Mr Chisholm that I will be happy to talk to him about that in more detail—it is a project that we are keen to advance.

Mr Whitton shed some clear light on the council tax freeze. It is beyond peradventure that the council tax freeze is now absolutely and completely funded by the Government. The gross domestic product deflator for 2010-11, which is set by Her Majesty's Treasury, is 2.25 per cent. If Mr Whitton's calculations are correct, £70 million equates to about 3.2 per cent, so the Government is not only funding the council tax freeze but funding it with some style and some margin of additional contribution.

A number of members focused on the adequacy of funding for local authorities; it was the centrepiece of Mr McMahon's argument. Mr Brown quite fairly asked where the money would come from to give local authorities a greater share of the fixed budget within which we operate. If I had continued the level of funding that was given to local authorities when I came to office in 2007-08—the level that I inherited from the Labour Party and the Liberal Democrats—councils would have received £80 million less in 2008-09, £209 million less in 2009-10 and £243 million less in 2010-11. Under the Labour Party's plans, local authorities would have been £531 million worse off if I had not improved the financial position of local government in Scotland. For all the bluff and bluster on the point, the Labour Party's plans, which I inherited, would have had local authorities £531 million worse off. At no stage during the budget process that we have just gone through did the Labour Party advance an argument for an increase in funding for local government—at not one stage was that undertaken.

When Mr McMahon dealt with Mr FitzPatrick's intervention, he said that, if Mr FitzPatrick had been here for the debate, he would have heard where the Labour Party would get the extra money from to fund the local authorities. I might have dozed off during that part of Mr McMahon's speech, but in fact it was not there. There was not a single piece of information about where we would have taken money from—another area of the fixed budget—to give to local government. The Labour Party resisted the difficult decisions on transport expenditure that I arrived at and discussed in the budget debate last week.

I am the first to acknowledge that we are in a difficult financial climate for public services in Scotland. However, I am glad that the partnership between national and local government works effectively to deliver public services to the people of Scotland and, in so doing, to deliver on their expectations and entitlements. That will be supported by the passing of the order tonight.