The impacts of the COVID-19 pandemic have been borne unequally across Scotland’s communities and this is likely to continue, according to a new report.
The Improvement Service today released the tenth annual Local Government Benchmarking Framework (LGBF) National Benchmarking Overview Report. This year’s LGBF report introduces data from 2020/21 and provides an evidence-based picture of the impact of the first year of COVID-19 on local government services and the lives of the communities it serves.
The evidence in this year’s LGBF highlights the effort and achievements delivered across Local Government during this exceptional period. The workforce has adapted quickly to meet new demands, maintain essential services and implement new ways of working. Critical to this has been the renewed and strengthened partnership working with local communities as well as with third and private sector partners, which has been and continues to be at the heart of local responses.
However, the evidence also highlights that the impacts of the pandemic on our communities have been, and are likely to continue to be, borne unequally. LGBF data from 2020/21 reveals growing levels of poverty, financial hardship and inequalities. This is shown, for example, in the widening attainment gap in literacy and numeracy for primary pupils, and in positive destinations in 2020; increasing rent arrears and reducing council tax payments; and increasing levels of benefit claimants, particularly in 18-25 year olds.
The scale of the challenge of keeping people who need social care safe and in providing high-quality health and social care during the pandemic was immense. The workforce pressures included managing anxieties, uncertainties, absence levels and significant recruitment issues. These issues have affected both public and private providers equally. This has led to wider concerns about resilience, especially at peak periods, with pressures often leading to a redistribution of staff rather than an ability to increase provision and capacity. Despite the challenges during this period, the exceptional efforts of the workforce ensured the continuation of service delivery and the protection of people from vulnerable situations.
In 2020/21, councils faced exceptional conditions as a result of COVID-19 which led to significant additional costs, loss of income and undelivered savings. As a result, Scottish Government made additional funding available to Councils directly to help mitigate the financial impacts of COVID-19, with funding for the year totalling £1.5 billion, with a significant proportion of this announced late in the financial year.
Total revenue funding for councils in 2020/21 increased by 13% in real terms. However, when non-recurring COVID-19 funding is excluded, the increase in funding is 1.1%. Scottish Government funding has reduced in real terms over the last ten years, falling by 4.2% since 2013/14 and 6.0% since 2010/11 (excluding non-recurring COVID-19 funding).
Prior to COVID-19, funding for councils had not been increasing at a sufficient pace to keep up with demands, including:
- growing demographic pressures (>2% per annum)
- increasing costs, including the impact of living wage and pay settlements
- additional impacts on demand from increasing levels of poverty
- higher public expectations.
Councils have also faced increasing national policy and legislative demands, with a growing proportion of funding which has been ring fenced for these initiatives, reducing the flexibility councils have for deciding how they plan and prioritise the use of funding to respond to local priorities. The continuation of single year settlements has also limited the ability to undertake, and the effectiveness of, medium to longer term financial planning.
In 2020/21, Local Government revenue expenditure increased by 3.2% in real terms. Since 2013/14, despite reductions in funding from Scottish Government during this period, Local Government has largely sustained real-terms expenditure levels, however there has been a relative shift of expenditure towards national priorities. Through legislation and Scottish Government policy, expenditure within social care and education continues to be sustained and enhanced. As these areas account for over 70% of the benchmarked expenditure within the LGBF, this therefore has a disproportionate effect on other council services that are not subject to the same legislative or policy requirements. This means they are increasingly in scope to bear a disproportionate share of current and future savings. Since 2010/11, in real terms this has included:
- 27% reduction in culture and leisure spending
- 26% reduction in planning spending
- 27% in corporate support service spending
- 13% reduction in economic development revenue spending
- 25% reduction in roads spending
- 34% reduction in trading standards and environmental health spending
- 13% reduction in environmental services spending.
It remains exceptionally challenging to forecast into the future with so many external influences affecting the economy. The continued uncertainty of the pandemic, limited funding flexibility, real terms reductions in funding at a time of relatively high inflation, lack of certainty over long term funding, and significant public service reform, provide a challenging context for effective planning and decision making on recovery and the required transformational change councils need to plan to provide an efficient, effective longer-term response.
While the COVID-19 pandemic has had an unprecedented impact on all councils, local areas experienced the impacts of this pandemic differently. Responses to COVID-19 have exemplified the importance of ‘local’, with local solutions and responses to local needs and issues, varying both between and within authorities. LGBF performance and expenditure data from 2020/21 reveal substantial variation in both the direction and scale of impacts. It is this variation that will provide the essential platform to help councils evaluate their approach during the pandemic and to inform their recovery priorities.
About the Local Government Benchmarking Framework
The Local Government Benchmarking Framework (LGBF) provides evidence and data on trends in Scottish local government. It supports evidence-based comparisons between councils, over time, providing an essential tool for policy makers and the public alike. The annual report represents a joint commitment by SOLACE (Scotland) and COSLA to develop better measurement and comparable data to target resources and drive improvements.