A spending watchdog has urged local authorities in Scotland to pursue transformation ‘at a pace and depth we’ve not yet seen’ to deal with the severe financial pressures they face.
A report by the Accounts Commission found Scottish councils closed a budget gap of £759m during 2023/24 by making savings and drawing on reserves.
Overall funding has increased in 2024/25, according to the report. However, the increasing demand for services, greater borrowing and depleting reserves ‘pose ongoing challenges.’
Council borrowing increased by over £400m leaving almost all councils with higher levels of debt and annual interest costs, the watchdog said.
Jo Armstrong, chair of the Accounts Commission, said councils in Scotland face ‘significant financial risks and uncertainties.’
‘This has been compounded by pressures out of their control, including ever-increasing demand on services and inflation,’ he said.
‘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.’
