COSLA launches ‘Invest Locally in Scotland’s Future’ campaign amid budget shortfall – Scottish Business News

Local authorities across Scotland are facing a potential £265 million funding gap due to changes in National Insurance contributions, prompting the Convention of Scottish Local Authorities (COSLA) to demand the removal of limits on council tax increases.

COSLA, which represents all 32 Scottish councils, has urged the Scottish Government to lift the 3% cap on council tax hikes, allowing local authorities to raise rates as they see fit. 

This request comes in response to the unexpected financial burden caused by the UK Government’s decision to scrap the Health and Social Care Levy, which has led to higher-than-anticipated employer National Insurance contributions.

Today, Friday 8 November, COSLA unveiled its ‘Invest Locally in Scotland’s Future’ campaign, urging the Scottish Government to provide fair and flexible funding in the upcoming budget.

This initiative comes as the Accounts Commission projects a Local Government budget gap of £392.7 million for 2025/26, potentially rising to £780 million by 2026/27. 

COSLA argues that councils cannot withstand another year of flat cash revenue settlement and cuts to core capital budgets, citing last year’s £54 million reduction

The organisation argues that without the ability to raise additional funds through council tax, local authorities may be forced to make significant cuts to essential services. 

The Scottish Government, however, has expressed reluctance to remove the council tax cap, citing concerns about the impact on households already struggling with the cost of living crisis. 

A government spokesperson stated that they are actively engaging with COSLA to address the financial challenges faced by local authorities.

COSLA President, Councillor Shona Morrison, said: “Years of real-terms cuts and flat cash settlements from Scottish Government, compounded by rising inflation and operational costs mean that our councils are constantly required to do more with less.

“Our councils have done their very best to protect core statutory services, such as education and social care.

“However, as we can see with the ever-increasing number of housing emergencies announced across our communities, even these essential services are facing real strain.”

COSLA Resources Spokesperson, Councillor Katie Hagmann, added: “Across Scotland, councils are in an extremely challenging position, made worse by significant cuts to our core budget in recent years.

“This is putting unprecedented strain on our front-line essential services and Local Government is moving ever closer towards unsustainability.  

The reality of budget reductions in areas such as roads, planning, culture, and leisure are threatening councils’ ability to meet statutory obligations including services such as housing and homelessness.

“Last year, the 2024/25 Budget resulted in a flat cash revenue settlement with further cuts to Local Government’s core capital budget. Our communities cannot afford for this to be repeated.

“The 2025/26 budget must provide fair and flexible funding to allow Local Government to deliver our jointly agreed outcomes and address the multiple challenges we are facing.

“It is vital that the Scottish Government ensures that any additional revenue and capital funding, made available through the UK Budget, is passed onto Councils.”

As discussions continue, the outcome of this debate could have significant implications for Scottish residents and the funding of local services across the country.