Councils played a crucial role during the Covid-19 pandemic, with staff working hard and at pace to support communities, protect jobs and maintain essential services. They received significant additional funding over a two-year period to do this, and Audit Scotland has published an interactive spending update showing where this money came from, and where it went.
People and local economies needed support quickly, and the local information councils held on citizens and businesses was crucial to Scotland’s response. Where existing relationships with communities were already strong, councils could also work faster and be more targeted in how they spent money.
Now that separate Covid-19 funding has ended, councils must evaluate what impact its spending has had; what worked well, and what councils would do differently with hindsight. Learning these lessons is essential to prepare for future crises, and to inform councils’ plans for recovery.
Not all Covid-19 funding received by councils has been spent, meaning it is available for councils to use in current and future years. We know that two out of three councils are using their reserves which include such funds to meet budget gaps in 2022/23. It remains important that councils are clear about how they use remaining Covid-19 funding and what they plan to do once it is all spent.
There are significant financial challenges ahead for local government. Council finances were under pressure before the pandemic, and now the costs of recovery must be managed alongside new financial pressures such as increased inflation, the cost-of-living crisis and tightening budgets. What is clear is that returning to the pre-pandemic status-quo is not an option. Radical thinking is needed to deliver services that councils can afford now and can continue to afford in the future.
We will talk more about this in our next local government overview, due to be published in May. This will be our third and final report in our three-year strategy reporting on the impacts of Covid-19.
Sheila Gunn, Member of the Accounts Commission