Scottish Labour leader Michael Marra has accused SNP ministers of “short changing communities to the tune of £2 billion” as he insisted Scotland’s councils had been underfunded.
Mr Marra hit out as new figures from Labour show councils should have received £15.483 billion in 2025-26, if their funding allocation had kept pace with the growth in Scotland’s block grant.
That block grant, the money which the Scottish Government receives from Westminster, has increased by 20.3% in real terms between 2013-14 and 2025-26, Labour said.
A decade of shortchanging communities to the tune of £2 billion has meant less funding for schools, social care and local roads and housing
But it added that despite that the cash awarded to Scotland’s 32 councils increased from £12.869 billion in 2013-14 to £13.482 billion last year – a rise of just 5%.
Had funding for local authorities kept pace with the growth in the Scottish block grant, Glasgow City Council’s budget would be £357 million higher in 2025-26, Labour added.
It also claimed the City of Edinburgh council would have been £147 million better off, while Highland Council could have received a further £117 million.
The attack came as the Scottish Government proposes major changes to how public services are run – with the suggestion from ministers that the current 32 councils be replaced with between six and 10 larger regional bodies, and as many as 160 smaller local ones.
Mr Marra however accused ministers of having “hoarded” both “power and money” within the Scottish Government, rather than transferring this to more local bodies.
The Scottish Labour leader however is now seeking to challenge the Government over this, accusing them of a culture of centralisation.
Mr Marra said: “The promise of devolution was a promise to empower local communities and open up politics and decision making to communities across Scotland.
“But instead power and money has increasingly been hoarded at the centre while local services face cuts, and the Government’s public service reform agenda is increasingly confused – risking a decade of distraction.”
He added: “A decade of shortchanging communities to the tune of £2 billion has meant less funding for schools, social care and local roads and housing.
“We should be investing in local services and high streets, not shortchanging them.”
Responding, Deputy First Minister Jenny Gilruth said: “Despite a challenging financial settlement, the 2026-27 Budget provides Scotland’s councils with record funding of almost £15.7 billion.
“In the face of high inflation and the impacts of global challenges on our economy, we are prioritising investment in frontline services and supporting those in need.
“Scotland continues to provide the most comprehensive package of cost-of-living support in the UK, and this year alone we will invest £160 million to mitigate shortcomings in the UK welfare systems.”
Ms Gilruth, also the Finance Secretary, continued: “I have written to the UK government to call for action on the cost of living in the upcoming Budget and to reverse damaging welfare policies.
“I have also called on the Prime Minister to demonstrate his commitment to devolution by providing us with the fiscal powers and commensurate funding to support investment and growth.”