Scotland’s councils face a “challenging” future and severe financial pressures in the short term, the country’s public finance watchdog has warned in .
Continuing budgetary pressures have been reflected in the cuts proposed by councils that have hit the headlines in recent months, as local authorities work towards setting their 2025-26 budgets.
And education - which typically receives the largest proportion of council funding - is not immune.
Planned council cuts affecting schools
In Dundee, for example, the council is looking at the possibility of closing five school swimming pools in a bid to save £440,000 a year by 2026-27; in Stirling the council is proposing reviewing the music tuition service with a view to saving £250,000. Campaigners warn that if the Stirling cuts proceed, it would “effectively mean the end of over 60 years of instrumental and vocal teaching in primary and secondary schools”.
Both councils will set their 2025-26 budgets in February.
The Accounts Commission found that councils’ total revenue and income fell in 2023-24, including another real-terms drop in revenue funding from the Scottish government.
In 2023-24 the government allocated councils total revenue and capital funding of £13.7 billion. However, councils had to close a budget gap of £759 million, which required them to make more savings.
The Accounts Commission said the financial outlook for councils remains “challenging”.
The government is urging MSPs to back its Scottish Budget - which is likely to be passed this afternoon following - to deliver “record investment” in public services.
However, despite an increase in overall revenue and capital funding in 2024-25, and the Scottish government’s budget proposals in December 2024 indicating a further real-terms uplift in funding for 2025-26, Accounts Commission chair Jo Armstrong said there remained an “urgent need for transformation, at a pace and depth we’ve not yet seen”.
The watchdog noted that there is still uncertainty over how increased employers’ national insurance contributions, announced by the UK government, will be funded.
‘Significant financial risks’
Ms Armstrong said: “Scotland’s councils face a challenging future, with significant financial risks and uncertainties.
“This has been compounded by pressures outwith their control, including ever-increasing demand on services and inflation. An expected increase in funding for the year ahead doesn’t cancel out the urgent need for transformation, at a pace and depth we’ve not yet seen.”
She added: “With services already being impacted, councils must be clear with communities the scale of financial challenge being faced. Working with communities to deliver differently is vital.”
If passed, the Scottish government says the 2025-26 Budget will see more than £15 billion for councils, “up more than £1 billion on the previous year - the highest increase in recent times”.
A Scottish government spokesperson added: “This increased funding settlement will allow councils to deliver pay rises agreed for all local government workers, including teachers, social care workers, refuse collectors and early years assistants.
“Alongside additional funding for local authorities to spend as they require for their communities, there is targeted investment in teacher numbers, additional support for learning and councils’ work to tackle the climate emergency.”
In December education secretary Jenny Gilruth said that councils would get an extra £69 million in 2025-26 to restore teacher numbers to 2023 levels and employ more specialist additional support needs staff; councils had also agreed to freeze learning hours and make progress in reducing class-contact time.
Concerns, however, have been raised about the “exceptional circumstances” the government has said it will be prepared to consider if councils fail to hit their teacher number targets.
Glasgow City Council, meanwhile, has refused to confirm whether it will now reverse its controversial cuts to teacher numbers over three years, agreed in its 2024-25 budget. The council says any new money will be taken into account as part of this year’s budget-setting process, with details to be announced in February.
The Scottish government’s Budget looks set to pass this afternoon after Scottish Labour leader Anas Sarwar’s announcement that his party would abstain on the vote.
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