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Aberdeen council bosses to demand better funding in Edinburgh

Aberdeen City Co-Councillors Douglas Lumsden and Jenny Laing.
Aberdeen City Co-Councillors Douglas Lumsden and Jenny Laing.

Aberdeen council bosses will travel to the capital this week to demand a shake-up in the way local authorities are funded.

The ruling Conservative, Aberdeen Labour and independent administration has long complained about the settlement it receives from the Scottish Government.

Now senior councillors will make the journey to Edinburgh on Friday to present an emergency motion to the powerful Convention of Scottish Local Authorities (COSLA).

Describing Aberdeen as the “economic engine” of the country, they claim the current system “massively disadvantages” the city.

The motion reads: “Notes Aberdeen City Council generates 86% of its own revenue through council tax and business rates, the highest percentage in Scotland.

“Seeks a full review of the distribution formula which disadvantages Aberdeen City Council massively.”

It also calls for the council to be allowed to keep all its business rates in-house – a suggestion that has proved massively controversial in the past.

COSLA represents all Scottish councils and if the motion was granted it would send a powerful message to Holyrood.

Administration bosses have also written to the leaders of the two opposition groups on the council, the SNP’s Stephen Flynn and Liberal Democrat Ian Yuill, to seek a united front on the issue.

Aberdeen council’s settlement has proved a political battleground for years.

Local authority leaders have long called for a different funding formula to ensure the city receives more government cash.

In turn, Holyrood has often pointed the finger of blame at Westminster austerity for the level of funding it can give to councils.

Council co-leader Douglas Lumsden said: “It is time that as Scotland’s third largest city we received a fair share of tax revenues.

“We are the economic engine of the country and have contributed to massive infrastructure projects. We are just asking for fairness.”

Liberal Democrat group leader Ian Yuill said he would be “happy” to support the motion.

A senior council source said the added line about business rates was to ensure the local SNP group did not support it.

The source added: “It seems the Conservatives and their Labour sidekicks are more keen on causing political trouble than helping Aberdeen.”

SNP group leader Stephen Flynn said: “I fully support any move by COSLA to review the funding formula as it currently stands – it clearly does not met the needs of Aberdeen City Council.

“However, the devolution of business rates, which is also what the administration are suggesting, is not something I would be willing to support as it poses a potentially huge risk to the council.”

A Scottish Government spokesman said: “Aberdeen City Council will receive over £372 million to fund local services in 2019-20.

“Using their council tax powers could also generate an additional £3.7 million to support the delivery of essential local services, meaning an extra £15.9 million or 4.4% next year.

“Councils may also retain additional rates income through the business rates incentivisation scheme.

“We will await the outcome and any response from COSLA.

“Like all local authorities, Aberdeen City Council receive their fair share of the available funding and they retain every penny of non-domestic rates income that they raise.

“Any review of the distribution formula should in the first instance come from COSLA.”