Savings proposals for 2023/24
Frequently Asked Questions
Q. Where does the council get its money?
A. Most of the council’s money comes as grant funding from the Scottish Government. This currently makes up nearly three quarters (74%) of what the council has to spend on services. Council Tax pays under a quarter (23%) of what the council spends on local services.
Q. Why doesn’t the council have enough money?
A. The amount of grant settlement that the council gets to pay for core services has been reduced and is likely to be reduced further in future years. This is happening at the same time as demand for local services is increasing, as the result of a fast-growing and ageing population.
Q. Why is the demand for local services growing so fast?
A. Midlothian is the fastest growing council area in Scotland. Our population in 2018 was 90,090. By 2026, it will be 100,410. This puts extra demand on the council for services. For example, the number of school places stood at 12,528 in 2019/20 and will go up to 15,814 in 2026 and 22,758 by 2036.
The number of older people is also increasing, resulting in extra pressure on vital services such as health and adult social care. The number of people in Midlothian aged 65 or over in 2019 was 16,392. By 2026, this will be 20,236. The number over 75 is also expected to rise by around 40% over the same period.
Q. What about all the new houses in Midlothian that are paying council tax. Surely the council’s income should be growing?
A. While it is true that people moving to Midlothian to live in new homes provide more council tax, what they pay doesn’t cover the services provided to them - such as schools and bin collections. Council Tax only pays for around 23% of council services. The majority of income (just short of 74%) comes from the grant settlement. A growing population is placing greater demand on our services but grant funding for core services continues to reduce in real terms.
Q. In 2018/19, the council’s spending was £204 million. Why does the council now need £262 million for the same or fewer services?
A. The council is spending more but much of that spending is ‘ring-fenced’ by the Scottish Government. This is money used to pay for new and additional national government commitments, such as expanding funded early learning and childcare hours. However, at the same time, funding for core council services is reducing while demand for our services is growing.
Q. Which council services get the most funding?
A. More than half (54%) of what the council spends pays for education, children, young people and partnerships. Over a fifth of all council spending (21%) is money delegated to the Integration Joint Board who are responsible for the delivering health and social care in Midlothian.
The remaining 25% meets the cost of all other council services including waste services, roads, libraries, parks and open spaces, sport and leisure, planning, and environmental health. This doesn’t include the costs of providing council housing, which is fully funded from rents paid by the tenants.
Q. If the increase in population is causing so much pressure on services, why do we keep building more houses in Midlothian?
A. The Scottish Government requires the council to identify sites for new housing development and sets the number of houses that need to be built over a given period. The council’s powers to reject applications for new housing are limited and refusals can be, and have been, overturned by Scottish Government ministers following appeals by the developers.
For Midlothian, the amount of new housing we are required to provide is significant, which is why we are the fastest growing area in Scotland. Inevitably, this housing and population growth leads to additional demands for local infrastructure, such as roads and transport and vital facilities such as schools and health centres.
The council has previously made representations to the Scottish Government seeking additional, specific funding for the area, given that rapid growth is increasing the demand for services in Midlothian.
Q. Why can’t house builders and developers help pay towards the cost of local services?
A. Building developers already pay to help fund the new buildings we need, such as schools, to serve a growing population. However, they don’t pay towards the cost of staffing and running schools or other council services. The council doesn’t have the power to change this.
Q. Can Council Tax go up more?
A. The council has still to decide any increase there might be in Council Tax for 2023/24. The Scottish Government has said that there will be no cap on Council Tax – meaning that there is full flexibility for all councils to raise this – but taking into account the impact of the cost of living crisis on local residents.
Each 1% rise in Council Tax would generate £580,000 of additional income annually for Midlothian Council.
Q. Why can’t the council raise more money by introducing new sources of income?
A. The council is looking at new ways of bringing in income to help pay for the services it provides. However, this alone was not enough to fill the budget gap. The council is also having to make savings by changing the way some services are delivered, charging for some services, and reducing some existing services.
Q. How does the council set its priorities when it comes to spending on services?
A. As part of a key document known as the Midlothian Single Plan, the council and its partners have agreed four key priorities:
- reduce the gap in economic circumstances
- reduce the gap in learning outcomes
- reduce the gap in health outcomes
- reduce carbon emissions in Midlothian to net zero by 2030
The council’s political groups take these priorities into account when working on their budget proposals but the council’s financial challenges mean that they have to make difficult choices. As part of the public engagement leading up to the council’s budget meeting in 2023, residents and local organisations have been asked for their views on what the council’s spending priorities should be, and on the savings measures that are being proposed.
Q. What is the council doing differently to cut costs?
A. Council services are being reviewed to find ways of doing things differently. The council is also working with neighbouring councils and other partners to see what savings can be made by sharing services, providing them in different ways and to be more efficient; and by generating more income.
Q. Are other council areas facing similar financial pressures to Midlothian?
A. Yes. The organisation which represents Scottish councils is called COSLA. Their Resources Spokesperson Councillor Katie Hagmann said that all councils are “going to have to take very tough decisions over the next few years to balance the books, given the financial pressures they face.
“In 2013-14, the Local Government funding settlement was worth £10.3 billion,” said Councillor Hagmann. “Looking to 2022-23 the Scottish Government provided (Scottish councils with) £12.5 billion. This does equate to a £2.2 billion cash increase. However, that increase is heavily ring fenced and directed funding for core services and local priorities has stayed the same.
“The reality of having the same amount of money this year as 10 years ago for core services is a real terms cut.
“As well as increasing costs, this money is also now required to deliver more services than it was 10 years ago - Scotland’s population has increased, the number of households has gone up, COVID has left a legacy of support needs for the most vulnerable and as people live longer, their care needs have become more complex.”
Q. How can residents and community groups have a say on how the council spends its money?
A. More than 1800 local people including staff and community groups commented on the savings proposals during a short consultation that ended on Wednesday 8 February. What local people told us was considered by councillors before they set a budget on Tuesday 21 February.
Q. Why are you spending money on Destination Hillend when you need to make savings?
Destination Hillend will be funded from the capital budget (used to pay for outgoings like building projects) and the money will largely come from borrowing. At the 21 February meeting, councillors set balanced budget by approving savings from the revenue budget (used to fund everyday spending on providing services).
Destination Hillend is forecast to generate a net income to the council of in excess of £1 million a year when fully operational from 2025/26. This takes into account borrowing costs and the money will go into the revenue budget, thus helping bridge the budget gap and paying for vital council services.
If cancelled, the only saving would be on borrowing costs and the council would then also have to find the extra £1 million a year annually that has already been taken into account when projecting future budget gaps.