Meeting of the Parliament

Meeting date: Thursday, February 25, 2016

Official Report 889KB pdf

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Local Government Finance (Scotland) Order 2016 [Draft]

Good afternoon. The first item of business this afternoon is a debate on motion S4M-15735, in the name of John Swinney, on the draft Local Government Finance (Scotland) Order 2016.

On a point of order, Presiding Officer. Under rule 8.17.1 of the standing orders I wish to challenge the Presiding Officer’s ruling on the non-selection of the Labour amendment for this debate. That is a regrettable decision that restricts debate on the important matter of protecting public services, and it follows on from the Presiding Officer’s decision not to select any of the amendments that were lodged for the stage 3 debate yesterday on the Budget (Scotland) (No 5) (Bill) from Labour, the Liberal Democrats or the Greens.

On both occasions, I asked the Presiding Officer for an explanation. The Presiding Officer emailed to say that she does not publish explanations in such circumstances. That is disappointing, and the approach lacks transparency.

I ask that the decision be reconsidered, even at this late stage. I also ask for a review of the procedures for publication of the reasons for the non-selection of amendments where a legitimate query is raised.

I thank the member for indicating in advance that he wished to raise a point of order.

The member has already indicated that the Presiding Officer has advised him that the selection of amendments is entirely a matter for the Presiding Officer. In line with her predecessors, the Presiding Officer does not give reasons for her decisions on the selection of amendments, but that does not, of course, in any way inhibit matters being raised during the debate as it proceeds.

I thank Mr Kelly for his point of order.

I call John Swinney to speak to and move motion S4M-15735. The Deputy First Minister has a maximum of nine minutes. We are very tight for time this afternoon.

14:32  

The Local Government Finance (Scotland) Order 2016 seeks agreement on the allocation of revenue funding to local government for 2016-17 to enable local authorities to maintain and increase the pace of reform in order to improve the vital services on which the people of Scotland depend and which they value. It also seeks agreement on the allocation of additional funding for 2015-16 that has been identified since the 2015 orders were discussed and approved at this stage last year.

The 2016-17 finance settlement that we are providing to local government must be set against the backdrop of the United Kingdom Government’s continuing austerity programme and the real-terms reduction in the Scottish budget. It is in line with the challenging settlement that is being provided to other public bodies, with the exception of the health service, which the Government is committed to protecting.

In 2016-17, the Scottish Government will provide councils directly with a total funding package that is worth over £10.3 billion. That includes revenue funding of almost £9.7 billion and support for capital expenditure of almost £607 million. However, that is only part of the picture. In addition to the settlement allocations in the order, local government benefits from the attainment Scotland fund, which provides support to schools in our poorest neighbourhoods to raise attainment. As I confirmed to Parliament yesterday in the Budget (Scotland) (No 5) Bill debate, I will double the amount of funding that we planned to allocate to the attainment Scotland fund over the next three years, from £80 million to a total of £160 million. That substantial additional investment will support local authorities in our quest to tackle the poverty-related attainment gap and ensure that every child has the opportunity to realise their potential.

The order seeks Parliament’s approval for the distribution and payment of over £9.5 billion out of the revenue total of almost £9.7 billion. The remainder will be paid out as specific grant funding or other funding, which will be distributed later as agreed with local government.

I will provide a bit of background to the overall 2016-17 settlement funding package, which is firmly focused on the delivery of joint priorities: to deliver sustainable economic growth, protect front-line services and support the most vulnerable in our society.

My priority has been to deliver a financial settlement that councils can accept, in order that we can pursue those shared priorities, which will improve outcomes for local people through health and social care integration and improving educational attainment. To that end, the accepted funding package for 2016-17 will protect the council tax freeze for a ninth year. We have, once again, committed £70 million to fully fund the council tax freeze to provide protection for household incomes in what has been a very financially challenging period for many.

We will invest £250 million in integrating health and social care services. That funding will support additional spend on expanding social care to support the objectives of integration, including through making progress on charging thresholds for all non-residential services, to address poverty. That will also help to deliver the living wage for all social care workers and help to meet a range of existing costs faced by local authorities in the delivery of effective and high-quality health and social care services.

Thirdly, we will maintain the pupil teacher ratio in Scotland’s schools. The Scottish Government has been consistent in protecting teacher numbers as a central part of our priority to raise attainment; £88 million is included in the settlement to ensure that schoolchildren continue to receive the same amount of teacher time by ensuring that councils maintain the number of teachers to pupils at current levels, and includes the induction of new teaching staff to replace those leaving the profession. Taking into account the addition of the £250 million to support the integration of health and social care, the overall reduction in funding equates to less than 1 per cent of local government’s estimated total expenditure in 2016-17.

I welcome the agreement of Scotland’s local authorities to this financial settlement, which, when taken together as a package of funding, will enable them to increase the pace of reform and improve essential public services to communities all over the country. I am pleased to note that, to date, 16 councils have formally set their budgets for the coming year and that they include plans to deliver on our package of measures.

The figures for 2016-17 presented for approval today include two significant additions from the provisional distributed figures issued on 16 December. Those include almost £54 million to deliver free school meals to all children in primary 1 to 3 and more than £26 million—the initial 80 per cent instalment of the money set aside for discretionary housing payments—to enable councils to mitigate fully the impact of the UK Government’s discredited bedroom tax.

The 2016 order also seeks approval for changes to the increase in funding allocations for 2015-16 amounting to a total of £72.8 million, which was either held back from the 2015 order or has been added to fund a number of agreed spending commitments that have arisen since the 2015 order was approved. Those include: £27.5 million, being the previously held back balance of the teachers induction scheme funding; £10 million for maintaining teacher numbers and pupil teacher ratios in 2015-16; £9.7 million funding assistance to enable local authorities to provide support and assistance to communities impacted severely by the emergency weather situations experienced at the end of last year and the beginning of this year; £7.2 million to support implementation of the one-plus-two languages policy; £5.8 million to support the local government contribution to the developing the young workforce programme resulting from the Children and Young People (Scotland) Act 2014; and £5 million for kinship care allowances.

I should explain that the total revenue funding to be paid out to councils in 2016-17, but not covered by the order and which will be distributed later, includes: £86.5 million paid directly to criminal justice authorities; £37.5 million for the teachers induction scheme; and £9 million, being the balance of funding for discretionary housing payments.

Although not part of the order, the overall package for local authorities includes support for capital funding in 2016-17 of almost £607 million. Allowing for the reprofiling of £150 million from 2016-17 to 2017 to 2020, that meets our commitment to maintain local government’s share at 26 per cent of the Scottish Government’s capital budget.

I turn to business rates, which is a key issue for local services and economic growth. Yesterday, at stage 3 of the Budget (Scotland) (No 5) Bill, I confirmed that we would moderate the proposed adjustment to rates relief for empty industrial properties and extend the fresh start and new start reliefs for the duration of 2016-17. Other proposals that I can now confirm are to set the standard poundage rate at 48.4p and the large business supplement at 2.6p for 2016-17.

Our renewables relief scheme will be refocused to support schemes with community involvement and on new developments that are coming on stream in 2016-17. The small business bonus scheme will continue unchanged for 2016-17, benefiting around 100,000 business properties.

We are extending for a further four years, to 2019-20, the current business rates incentives for enterprise areas and are creating a new life sciences enterprise area at Biocity in North Lanarkshire.

The closure of the two Tata Steel sites is a national concern, and our task force has been interrogating ways to support reoccupation. One measure that we are putting in place is new rates relief for steel production on the sites.

Given the importance of rural digital connectivity, we are piloting a new rates relief scheme in Arran and the Cairngorms to incentivise new mobile mast construction, which could subsequently be rolled out more widely.

Presiding Officer, legislation was laid yesterday for all those changes to come into force on 1 April. They underline the Government’s commitment to maintain Scotland’s position as the best place in the United Kingdom to do business, with a rates relief package that is estimated at over £550 million for 2016-17. We continue to listen to the views of business and we will shortly announce details of the review of business rates, as we committed to do at the draft budget.

In summary, the total funding from the Scottish Government to local government next year amounts to over £10.3 billion. With that in mind, I move,

That the Parliament agrees that the Local Government Finance (Scotland) Order 2016 [draft] be approved.

14:41  

It was only yesterday that workers from councils across Scotland assembled in front of this Parliament to protest the cuts that are being visited on local government by John Swinney. They stood shoulder to shoulder with councillors and council leaders, and they did so because they know that those cuts are not council cuts—they are Scottish National Party cuts; they are John Swinney’s cuts. The SNP Government had a choice, but it decided yesterday that it would continue Tory austerity and cut hundreds of millions of pounds from essential public services rather than raise a penny on income tax. Those cuts, Presiding Officer, are entirely SNP cuts.

Mr Swinney had the bare-faced cheek to try to tell us that the impact of the cuts was minimal and that we were utterly exaggerating the scale of job losses. The SNP has form on that. Unions estimate that there have been 40,000 job losses in local government since the SNP came to power. The Convention of Scottish Local Authorities has said that there will be 15,000 job losses as a result of this budget, and the GMB estimates that there will be 8,000. Whichever figure it is, the scale of the jobs that will be cut from local government is not minimal or exaggerated.

SNP-controlled Clackmannanshire is a very small authority. Let me repeat: it is cutting 350 jobs over the next three years. Of course, the First Minister did not want to go into that much detail, so she gave us only the first-year figures. That is 15 per cent of the whole workforce of that local authority. What about the cuts that that local authority is making to the third sector? What about the cuts to Women’s Aid and Rape Crisis? Will there be no job losses as a consequence of those?

What about other areas? I understand—I am sure that the Deputy First Minister will correct me if I am wrong—that 170 jobs were lost in Angus last week, and 282 posts might well go in Highland. Unison tells us that almost 2,000 jobs were lost in Edinburgh, where the SNP is in coalition with Labour. That is seven times the number of job losses at Tata Steel. If the SNP is so sure of its ground, let us have an impact assessment of the underfunding of local government, the cuts to services and the loss of jobs, because it is not minimal and it is not exaggerated.

In Mr Swinney’s backyard, Perth and Kinross is cutting learning materials and support staff and increasing class sizes in English and maths. I do not think that he believes that that is good for the children in his area.

Local councils are struggling with the cuts. Jobs are not being replaced when they become vacant. Staff are being asked to do more with less. In some areas, absence rates have gone up, which indicates the stress that staff such as teachers and care workers are under. People are losing their jobs, and they are under increasing stress. Are they simply collateral damage for the cabinet secretary? Is the impact on them and their families minimal or in some way exaggerated?

I repeat a point that we have made consistently. If this was the private sector, members of the Scottish Parliament across the chamber would be clamouring for a task force to alleviate the impact. When will the cabinet secretary do something to help those who are now out of work?

The cabinet secretary says that he has agreement from all 32 local authorities. Yes, he has letters that accept the budget allocation that was made to the local authorities, because they had no choice. They accepted it under duress. They faced draconian sanctions that would have stripped even more money from their budgets than was already being taken out. How could they not accept the settlement when the cabinet secretary effectively had a gun to their heads?

You might doubt this, Presiding Officer, but I am old enough to remember the days of the concordat with local government, of which John Swinney was the architect. The cabinet secretary talked about mutual respect and parity of esteem, and there were handshakes, back-slapping and smiles all round. Those sunlit uplands are but a distant memory. Relations are now in deep freeze. There is no respect and local government is not valued by a centralising Government. Meetings are being declined and budgets are being slashed. It is so bad that even SNP councillors, including the SNP’s lead member in Edinburgh and the council leader in North Ayrshire, are complaining.

The cuts are brutal. According to the Scottish Parliament information centre, they are of the order of £600 million. The budget was £10,756.7 million for last year and it is £10,152 million for this year coming, although I acknowledge that the cabinet secretary has added some in. I am sure that we will be treated to an explanation of capital reprofiling but, in my book, £600 million is £600 million.

The local government share of the Scottish budget is now even lower at 30 per cent. I know that John Swinney likes to claim that it is higher—he always says that to me—but he is engaged in nothing more than smoke and mirrors. He is adding contributions for the fire and police services that he stripped out years ago.

Local government is not some abstract thing. It is all about services that civilise our society, such as home care for older people, adaptations for disabled people, support for children who have special needs, education, care services, emptying our bins, cleaning our roads, libraries, housing and so much more. Those services are for everyone.

You must close, please.

The SNP has decided that local services are not important. Each and every cut in each and every local authority is John Swinney’s cut and the SNP’s cut.

I reiterate that we have no time in hand.

14:47  

I have always regarded the finance secretary as a reasonable man, indeed somewhat mild-mannered. It is therefore something of a surprise to see the level of opprobrium that local government has directed towards him during the past few weeks. We have seen him described as Don Corleone Swinney, a Mafia boss, as the Jack Palance character in the 1950s western “Shane”, gunning down the innocent farmer, and as imposing a totally unacceptable settlement that is an attack on the democratic mandate of local government.

It is impossible not to have some sympathy for the views of those in local government about the cabinet secretary’s negotiating tactics. I can only imagine the outrage from the SNP if the Westminster Government treated the Scottish Government in the same way as the Scottish Government is treating local councils.

The settlement is undoubtedly a difficult one for councils, and it means that tough decisions have to be taken. As we know from budget debates, the Scottish Government could have made other choices on tax. I agree with its stance on imposing a rise in income tax, but it can hardly blame Westminster or anyone else for the choices that it has made.

In the area that I represent, I am well aware of the concerns raised by Fife Council about what the level of cuts will mean for public services, but elsewhere the position is happier. In Stirling, where the Conservatives share the administration and we have a Conservative finance convener in Councillor Neil Benny, the council is today delivering a robust, innovative and responsible budget that protects front-line services and finds savings through making the council more efficient. In Stirling, there are no cuts to music provision, nursery care, adult learning, rural services, or services for old people. New money has been found to invest in economic growth in Stirling, including investment in schools, roads, flooding schemes and rural broadband. New efficiencies have been found in the back office. That shows what can be done when Conservatives are involved in running local government.

Other councils have to take responsibility for some of the choices that they have made. In Perth and Kinross, the SNP-run council has chosen to spend nearly £1 million on a relocation of the council chambers from the top floor to the ground floor of the council headquarters. I am sure that that is a desirable project, but one has to ask whether, in these straitened times, it is a priority. The costs include £150,000 that is being spent on new chairs and desks for councillors. Those in the voluntary sector will look on and wonder, as they face potential cuts in funding, how that can be justified.

Today’s local government finance order is about the allocation of funding to councils and we will support it. However, we have one reservation, which I mentioned yesterday in the budget debate. I make no apology for raising it again today. I believe that it is not since 2009 that we have had a proper look at the funding allocation mechanism between councils. We have had persistent claims from councils in the north-east of Scotland, particularly from Aberdeen City Council, that the current funding mechanism disadvantages them. When the economy in Aberdeen and the north-east was booming in relation to the rest of Scotland, there might have been a case for ignoring those claims. However, with the rapid downturn in oil and gas, the situation has become more acute and undoubtedly there is greater demand on council services in Aberdeen than there has been before.

For those reasons, we believe that it is time to look again at the funding allocation settlement. It would be useful if the cabinet secretary could indicate when he is winding up whether the Scottish Government is prepared to do that in the near future.

With that one reservation, and conscious of the difficult circumstances in which local government has been put as a result of the Scottish Government’s choices, we will support the order at decision time.

14:52  

I start—as I finished yesterday—with a special plea for the local alcohol and drug partnerships. The reduction of the main budget from around £69.2 million to £53.8 million is supposed to be made up by money from local health boards. I would appreciate it if the Deputy First Minister could explain whether that money will be forthcoming, because there is great anxiety amongst the alcohol and drug partnerships that there will be a significant drop in their funding of around 23 per cent at a time when they require additional support to deal with the treatment requirements of certain communities.

Those of us who have witnessed some of the projects that that money funds know that it would be a detrimental step for that funding to be reduced. I would appreciate an answer from the Deputy First Minister on whether he will reconsider that allocation or provide guarantees from the local health boards.

Murdo Fraser asked about Aberdeen City Council funding. Mr Swinney and I have an annual discussion about that issue, but every year he refuses to budge. Murdo Fraser makes a fair point that, this year, it is more important than ever that the promise on the 85 per cent threshold—the floor that was set by the SNP Government all those years ago and which has hardly ever been met since—should be met. It accounts for something like an £18 million shortfall in the funding for Aberdeen City Council. At a time when funding is tight, that is a significant sum of money so I would appreciate it if the Deputy First Minister would at last change the policy and agree to meet the 85 per cent threshold so that Aberdeen City Council can receive the money that it is due.

The context for that, of course, is the £500 million cuts to local government as a whole, as we have been debating for what seems like a number of weeks now. To rehearse the argument, we know that the SNP Government has greater flexibility—it has more flexibility than ever before. At the same time, however, it is imposing even greater strictures on local government with its triple-lock arrangement. If councils raise the council tax by just £1, they lose not only all the money for social care and teacher numbers but the funding for the council tax freeze. That seems overly draconian to me, and it certainly removes an element of local democracy and decision making.

As a result, the cuts that are coming local government’s way are certainly John Swinney’s cuts. Every single one of them is at his behest, and he must accept responsibility for the effects of those cuts as they come in the coming year.

Gavin Brown explained the situation very well yesterday: when the cuts come from Westminster they are draconian, but when they are dealt out to local authorities they are somehow very generous. I do not know where the magic money tree comes from. John Swinney was referred to in yesterday’s debate as some kind of wizard, but I am not sure that he is able to magic up that amount of money between the point when the funding comes from London and the point at which it is passed on to local authorities.

As is usually the case, we hear that every single cut is the responsibility of Westminster and every single investment is the responsibility of John Swinney. The two are not the same, and we need a bit more frankness about the flexibility that gives us in this Parliament the ability to do things differently if we so choose. I encourage John Swinney, at this last moment, to change his mind and give local authorities the flexibility, and to look at the alcohol and drug partnerships and at Aberdeen City Council funding.

14:56  

Over the past few days we have discussed the budget, and we are now discussing the local government finance order, and one thing is clear to me. I certainly do not want low-paid workers in Scotland and their families to have to pay for George Osborne’s austerity, no matter what the Labour Party may think.

It was interesting to hear from Jackie Baillie today that she wanted to talk about detail. She and her colleagues have not talked about the detail of the rebate scheme that they are offering as part of their tax raid on the lowest paid in our society. It is interesting that she and her colleagues have avoided giving that detail, and it is clear from all that they do in that regard that they have written a policy on the back of a fag packet. Everybody out there knows that that is the case.

We are talking about policies that are written on the back of a fag packet. Mr Stewart will remember standing at the last election on a promise that no council in Scotland would receive less than 85 per cent of the Scottish average revenue funding. How will he explain to his constituents and mine why this budget provides Aberdeen with 77.3 per cent of the Scottish average?

What I will say to Mr Macdonald is that I am very grateful to the late Brian Adam, who got this Government to introduce the funding floor. It means that, this year, Aberdeen will get an extra £13.9 million, which in my book is not to be sniffed at.

Will Mr Stewart give way?

No. I have had enough of Mr Macdonald, it has to be said, just like the people of Aberdeen Central at the last election.

The Government is continuing to live up to its pledges to the people. We are freezing council tax to help families throughout Scotland; the freeze is worth approximately £1,500. There have been advances in health and social care integration, and there is an investment this year that will ensure that care workers get the living wage and is to be celebrated. We should all applaud that.

Yesterday, we heard the cabinet secretary announce that the attainment fund would rise to £160 million—a doubling of that fund, which is extremely important. The cabinet secretary, in his speech today, spoke about discretionary housing payments to cover the Tories’ awful bedroom tax, which again hits the poorest in our society, and about funding for kinship carers, which is extremely important.

What my colleagues and I want to see, and what the budget announcement yesterday and the announcement today will deliver, is a pay rise for people on low wages and not a tax rise for our lowest-paid workers. [Interruption.]

If the Labour Party has any credibility whatsoever, I ask it to spell out its policy in full so that the public out there know what it is about. [Interruption.]

Order, please. Mr Stewart is closing.

As it stands, what the Labour Party has proposed would see a raid on the pockets of the lowest-paid workers in Scotland. [Interruption.]

Order. Before I call the closing speakers, I remind members respectfully that everyone in the chamber is required to conduct business with courtesy, please. I call Cameron Buchanan—four minutes maximum, Mr Buchanan.

15:00  

I am glad that the debate has given us the chance to elaborate on the challenges and decisions that local government funding faces, because it is important that we get it right. To do that, we need to be clear on what the difficulties are, what has caused them, what needs to be done and who has the power to make a difference.

It is clear that the current settlement represents a financial challenge for local authorities, as we have all heard, but we must keep an eye on the bigger picture of keeping local government sustainable in the long term. To achieve that, councils across the country need to take the right decisions to deliver services as efficiently as possible. That is the least that taxpayers deserve; and, yes, there remains significant scope to make savings in local government.

It is important to get the balance right when funding for local government is allocated, because each commitment inevitably comes with a cost in the form of alternative spending foregone or taxes raised. Such trade-offs are central to responsible government, and I am pleased that the Scottish Government has agreed with the Scottish Conservatives that it would not be right to inflict higher taxes on the people of Scotland.

Taking more money from people’s pay packets might seem like an easier solution to financial challenges, but it is certainly not the right one. I emphasise that a decision to raise taxes and transfer funding to local government was in the Scottish Government’s power but that it took the same position as we did to protect taxpayers. It is therefore not good enough to pass the buck again and blame the changes in the finance settlement on the UK Government.

That admission of responsibility is particularly important because the funding from the Scottish Government makes up a huge part of local authorities’ budgets and is therefore central to their financial planning. When local authorities are so dependent on central Government funding, as well as subject to centralised targets, they need a Government that can accept accountability for the decisions that it makes.

However, councils are responsible for the long-term sustainability of local services, and it is clear that there is room to streamline those operations. The City of Edinburgh Council, for example, is spending millions on an unwanted scheme to enforce a 20mph limit across most of Edinburgh without there being any compelling reason to do so. I do not see what that will achieve for my constituents, let alone why their council tax should be spent on it; and we all know that that council’s track record on fiscal constraint is not that great when it comes to transport schemes.

That is just one of many such examples across Scotland—my colleague Murdo Fraser referred to an example in Kinross. If councils are to serve the public, they must respond to financial pressures by avoiding unnecessary expenditure and by making efficiencies in essential services, rather than seeking to take more from local residents through crude measures such as increasing parking fees.

It is only correct that we listen respectfully to all points of view and consider varied options if we are to get the system of local government funding and service delivery right for the people whom we represent. Achieving that requires open and honest admissions of where the responsibility lies.

It is not good enough for our constituents if local and central Government claims impotence in the face of someone else’s decisions. We must make proper, well-rounded assessments to arrive at the fairest deal for all involved, but all participants must be open about what they can contribute to meet the challenges. After all, it is elected representatives’ responsibility to tackle the challenges facing public services rather than pass the buck, and we should certainly not pass the burden on to hard-working members of the public.

15:04  

Yesterday’s stage 3 debate on the budget was a pretty depressing affair. I am sorry to say that I had little expectation that today’s debate would be any more edifying. For the most part, the SNP is simply refusing to engage with the argument about raising taxes versus cutting spending, and it is trying to demonise or falsely portray what is on offer or to pretend that it has no real choice.

The cabinet secretary, who we normally—as Murdo Fraser correctly identified—find to be an eminently reasonable and personable parliamentary colleague, presented two arguments that were contradictory. As Willie Rennie said, the cabinet secretary described the settlement that was passed on to him from the UK Government as unacceptable and potentially devastating, but he has said that his proportionately larger cuts to local authorities would have “minimal impact”. I am sorry, but to say that that defies logic does not quite do justice to Mr Swinney’s attempts to face two ways at the same time.

In particular—I wonder whether he already regrets this—the cabinet secretary has tried to downplay the effect of his £500 million of cuts on jobs and the number of lay-offs that we might expect. Given that the majority of local government spend is accounted for by the workforce, it is difficult to see how large-scale job losses can be avoided.

Local authorities are certainly in little doubt about the pain that John Swinney’s cuts will bring. Unison is worried about 2,000 job losses in Edinburgh, and we heard this week that as many as a further 2,000 jobs could go in Fife. COSLA has estimated that up to 15,000 jobs are at risk. Given that the cabinet secretary has already presided over at least 40,000 job losses in local government, his attempts to minimise the effects of these huge SNP cuts will be seen as offensive to those who are directly affected and to many in our trade unions. Jackie Baillie put that point to him earlier. If he disagrees with our figures or believes that COSLA and the unions are utterly exaggerating them, I ask him—once more—to produce his own estimates, which we will work from.

Another oxymoronic or contradictory statement that Mr Swinney came out with yesterday was that he is entitled to impose conditions and limits on local government decision making, but that it is entirely up to

“individual local authorities to take the decisions that they want to take about their budget choices”.—[Official Report, 24 February 2016; c 20, 21.]

Is the cabinet secretary not aware that it is his centralising and dictatorial attitude to our local authorities that has so angered many of our locally elected representatives? We know that the SNP has already centralised our police service, our fire service and our colleges, but Mr Swinney’s interventions in supposedly local decision making are every bit as authoritarian. Yesterday, he claimed that all 32 councils had agreed with him because all had signed his letter, but he conveniently forgot that he had given them no choice. They had to sign up or face penalties of hundreds of millions of pounds.

I ask again whether Mr Swinney read any of the letters that he received. I have some of them here. The letter from Fife Council said:

“with the greatest reluctance ... I see no alternative ... given the extreme punitive sanctions you would otherwise impose on Fife Council.”

The City of Edinburgh Council said:

“in agreeing this package of measures, I need to make it crystal clear that I’m doing so under duress.”

Inverclyde Council said:

“In all my years in Local Government I cannot recall such a draconian settlement both financially and in terms of the penalties threatened ... I find it totally baffling that a Government which portrays itself at every turn as being anti-austerity would support a settlement that will undoubtedly have a devastating impact on local communities, services and jobs in the years to come when it had other levers at its disposal to avoid such an outcome.”

That does not sound like agreement to me.

We know that this is bad news for jobs and for local democracy, but what does it mean for services? Many fear that the axe will fall most heavily on the third sector and non-statutory services such as women’s aid and rape crisis centres. One group that was at the Parliament yesterday to make its voice heard was Watch Us Grow from Cumbernauld, which is a small local charity that works with adults who have a range of support needs or who are recovering from mental health challenges. It is based at the gardens at Palacerigg country park. We could not help but be inspired by the difference that it makes to so many lives; it gives people a sense of purpose, fulfilment, achievement and belonging.

Such services are not statutory funded services, but they are essential to the wellbeing of every one of us and they are under threat because of John Swinney’s cuts. Everyone who uses or relies on locally delivered public services is now under threat.

15:09  

Let me begin with the remark that Ken Macintosh made about the allegedly centralising and dictatorial policies that I preside over. [Interruption.] I think that Jackie Baillie just muttered, “You do.” Of course, we are familiar with the mutterings that we get from the left-hand side of the chamber on a daily basis, but let us look at some of the background to all this.

One of my first acts as finance secretary was to liberate local authorities from £2 billion-worth of dictatorial budget control that Jackie Baillie and her ministerial colleagues had exerted from St Andrew’s house. Local government had asked to be liberated from the dictatorship of ring fencing, and it took the election to office of a liberating SNP Government to remove that constraint from local government. [Interruption.] Jackie Baillie knows that I am generous in accepting interventions. If she wants to make an intervention rather than mutter, I will take it.

I do not recall muttering. I put it to the cabinet secretary that what he is doing now is actually ring fencing, which is exactly what he claims not to be doing.

I will come on to that in a second. Removing ring fencing liberated local authorities and gave them much more financial flexibility.

Ken Macintosh attacked us for creating a single police force, but a single police force was in the Labour manifesto in 2011. Did Labour not know what it was agreeing to when it offered that to the people of Scotland? Had it not looked at the detail of what a single police force might look like once it was constructed?

I come to the agreement that I have sought with local government. I do not know why Jackie Baillie was going on about meetings with local government being declined, because I have had endless meetings with local government about the issues—

If that is the case, why did the cabinet secretary not come outside the Parliament yesterday to meet local government representatives?

I hope that Ken Macintosh can understand that on budget day, when I had also appeared before the Finance Committee, it was quite difficult for me to find the time to do everything. On Monday morning, I spent more than an hour with Unison representatives from every part of the country, in a perfectly considered and courteous discussion in St Andrew’s house, in which I listened to workers’ concerns. Ken Macintosh should not dare to come here and make baseless suggestions that I do not engage with working people in this country.

Where was the SNP?

One SNP MSP who was meeting representatives was me, in St Andrew’s house on Monday. Ken Macintosh should not give me the baseless rubbish that he comes out with.

Let us look at the substance of the offer that I made to local government. What issues are at stake? First, there is £250 million-worth of investment in health and social care integration, including investment to pay for the living wage for social care workers. What is there about that proposition that local authorities and the Labour Party could disagree with?

Secondly, we have argued for a settlement that will protect teacher numbers in our schools, so that we do not have any further erosion of their numbers and so that we preserve the pupil teacher ratio. What is there about that that Labour and local authorities could object to?

Finally, we come to the council tax freeze. I remind the Labour Party that many of the authorities that it controls were elected in 2012 on a commitment to a five-year council tax freeze. What on earth is there to object to about all that?

Over our term of government, we have put in place a set of arrangements with local government that began with the removal of ring fencing, to give local authorities much more freedom to act. Over many years of budget settlements, we protected local government from reductions in public expenditure that we as a Government faced. Local government therefore starts this difficult period with a baseline that is at a much higher level than it could have anticipated and which is at a significantly higher level than that for local government south of the border, which has been decimated by reductions in public expenditure.

I encourage members to think about the point that I made in my opening remarks. When the investment that the Government is making in integrating health and social care is taken into account, the budget reduction in resource terms amounts to less than 1 per cent of local authority expenditure. That is why the claims that the Labour Party is putting around are exaggerated.

I am surprised that Jackie Baillie returned to the territory that she returned to, because it was comprehensively debunked by the First Minister at question time, just a few hours ago, when the accusations and suggestions that the Labour Party has made were exposed for what they are.

I will make a couple of specific concluding remarks to address points that members have made. Mr Fraser asked about the distribution formula. That formula is kept under constant review by the settlement and distribution group. If there were to be a more fundamental review of distribution, we would need local government’s agreement, and local government has not signalled its willingness in that respect.

I am familiar with the issues in Aberdeen; indeed, I am the first finance minister to give the city a specific additional funding settlement. If it had not been for my actions, Aberdeen City Council would be getting £14 million less in its settlement than it is getting today.

Will the cabinet secretary give way?

I am sorry, Mr Macdonald, but the cabinet secretary is in his last 45 seconds.

The city of Aberdeen has been given a settlement, and my colleague Kevin Stewart referred to Brian Adam’s work in bringing that about. A persuasive argument was made for something that the Government has faithfully put in place—and, of course, we were the first Government to tackle the Aberdeen funding issue. It was not tackled by the Liberal Democrats when they were in office or by the Labour Party when it was in office. We are the Government that has delivered for the people in the city of Aberdeen, and I encourage the Parliament to support that provision as part of the wider local government settlement that is before Parliament today.