Calls for a debt amnesty for Scottish councils intensified today (Tuesday 19 April) as Scotland’s largest union, Unite sought the backing of the Scottish Trade Union Congress for a package of measures aimed at easing the financial crisis facing Scotland’s local authorities.
Speaking at the STUC conference in Dundee, Unite local government representative Charlie McDonald called for the wipe out of £2.5 billion worth of crippling pre-devolution debt owed to the UK Treasury Public Works Loans Board.
The move comes as Scottish Labour threw its weight behind the Unite campaign. The shadow Scottish secretary, Ian Murray, wrote to chancellor George Osborne today asking him to consider reducing the rates of interest currently being paid by local authorities on pre-1999 debts.
Welcoming the move by Scottish Labour, Unite Scottish secretary Pat Rafferty said: “The call for a debt amnesty for Scotland’s local authorities is getting ever stronger and ever louder. It is scandalous that some councils are paying interest rates of over 10 per cent resulting in 10 pence in every one pound of council taxpayer’s money being funnelled from vital services to pay outstanding pre-devolution liabilities.
“Scottish councils are in the grip of a ‘toxic’ cocktail of austerity and debt which could damage services in way not seen since the 1980s. With 40,000 Scottish local government jobs gone since 2010 and a further 15,000 under threat because of the Scottish government’s £600 million cut to local authority funding, now is the time for politicians of all parties to follow Scottish Labour’s lead and back our call for a debt amnesty.”
Moving Unite’s motion on public finance and local government cuts at the STUC conference, Charlie McDonald said: “The Scottish government is starving local authorities of the funds necessary to maintain vital service provision. Workers are being asked to do far more with minimal resources putting an enormous strain of services.
“It is not having a minimal impact as John Swinney scandalously suggested. Local government in Scotland is facing a crisis.”
On the action to alleviate the ‘toxic’ cocktail of austerity and debt facing councils, he added: “We must develop a strategy to effectively address the current financial crisis facing Scotland’s local authorities and a number of options should be on the table. These should include the consideration of how public sector debts, such as PFI, can be eliminated or refinanced and greater flexibility for councils to use their capital budgets.
“We would also draw people’s attention to the Unite debt amnesty campaign as one element of this strategy. An amnesty on pre-devolution debt interest repayments would create much needed breathing space in extremely pressurised Scottish local government budgets, saving hundreds of millions of pounds and thousands of jobs.
“We are aware though that these recommendations are not on their own a panacea. Rather, we believe that they should form part of a package of measures to help local government finance. A move, which Scottish councils and the Scottish government should unite around to protect services and jobs.”
For further information please contact Elizabeth Cairns on 07736 722 380.