Senior Councillor queries the cost of Cosla membership

Tuesday January 17th 2023


Written by Local Democracy Reporter, Marie Sharp

A senior East Lothian councillor has questioned whether the local authority’s membership of Cosla is ‘value for money’ amid claims the local authority will pay the body £3.4million – equal to 5% of all council tax revenue.

Conservative opposition group leader Councillor Lachlan Bruce said the national floor formula used by the body when negotiating council grants from Scottish Government, means the council is paying millions each year to Cosla, which represents local authorities in pay negotiations with the Scottish Government.

And he asked if the cost of membership could be justified as finance officers said the council faces a £14.4million shortfall in its budget for the coming year.

Questioning officers about the ongoing cuts needed to address a shortfall in funds, Mr Bruce asked: “Is being a member of Cosla worth paying £3.4m. Is it value for money for East Lothian?”

Final funds for local authorities are agreed between Scottish Government and Cosla following a Cosla approved formula which aims to ensure no council receives funding below a “floor” level which is set, and sees settlements adjusted with some councils receiving more and others less than the initial Scottish Government grant proposed.

However it has been argued that the formula has not been adapted to recognise small local authority areas like East Lothian and neighbouring Midlothian who are experiencing high growth in populations and need more funds.

The report to cabinet revealed that the annual increase in core funding from Scottish Government to East Lothian Council for the year ahead was just 0.9% despite record inflation and increasing costs.

Membership of Cosla is voluntary and the council’s chief finance officer Sarah Fortune admitted the formula the body uses to decide how much each council receives from a national pot of money from Scottish Government is “complex”.

However she told the meeting that she believed continued membership of the body was right “at this moment”.

She said: “There is a choice over whether we feel we are getting value for money through national negotiations. My opinion as statutory finance officer right at this moment is that, I think, there is merit in being part of the national discussions.”

Council leader Norman Hampshire said any change to the formula used by Cosla would have a detrimental effect on areas that would lose additional funding.

He said: “We think growth should be recognised but not as part of the block grant from Scottish Government, we think there should be additional funding for local authorities who are dealing with growth.”

Following the meeting Councillor Bruce said the formula was “fundamentally unfair” for residents in East Lothian who lost out on the funding which equalled the increase expected to be imposed on them in a council tax rise in April.

He said: “It is a mind boggling, nonsensical system.

“This means that 5% of our council tax bill is going towards subsiding shrinking councils areas instead of supporting stretched services here in East Lothian.

“East Lothian isn’t alone in facing this problem either. I know from speaking to councillors in other growing authorities that they are hurt in the exact same way.

“If COSLA doesn’t fix this and come up with a fairer formula then local authorities who are losing out will be looking for the exit.

“I know I cannot defend this as it does not represent good value for money for East Lothian’s residents.”

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