The financial sustainability of Scottish councils is at risk without a longer-term settlement, the public spending watchdog has warned today.

In a new report, the Accounts Commission said COVID-19 had ‘exacerbated and laid bare' the financial challenges councils are facing.

It said a multi-year financial settlement was needed to address the challenges posed by the pandemic.

The report found that while councils reacted quickly to provide innovative and sustained support to vulnerable people during the crisis the impact of disrupted council services on users was ‘severe and unequal'.

This included carers who lacked access to respite care, people with learning disabilities who were unable to access critical services and support, and those receiving care at home.

Interim chair of the Accounts Commission, Elma Murray, wrote in the report: ‘There is rarely financial certainty for councils beyond the current financial year.

'Without this Scotland is faced with a clear risk to the financial sustainability of our councils.'

In England, there have now been two years of single year local government finance settlements.

The MJ understands that the Ministry of Housing, Communities and Local Government (MHCLG) is arguing for a multi-year settlement in conversations with the Treasury.

An MHCLG source said: 'The point has been made to HMT [Her Majesty's Treasury] that we get more efficient use of money if councils don't need to sign nine-month contracts every year.'

A three-year Spending Review for all of government is expected.