Budget: Local Government funding

Local Government and local services will have over £240 million more available them next year, Finance Secretary Derek Mackay announced today, as he unveiled a package of increased investment in councils, schools, social care services and the potential for councils to raise additional revenue from the Council Tax.

Outlining the 2017-18 Local Government settlement as part of the Scottish Government’s Draft Budget, Derek Mackay said that the £111 million of additional Council Tax revenues expected to be raised from reform of the upper bands will be available to be spent locally. He announced the Scottish Government will use its own resources to fund £120 million going to schools to close the attainment gap.

The overall package includes total revenue support of £10,252.9 million, including £88 million to maintain the pupil to teacher ratio nationally and secure places for all probationers who require one under the teacher induction scheme. The Scottish Government will add additional funding and free up councils to raise additional revenue by:

• Providing £107 million from the NHS to support Social Care Services and pay the Living Wage for Social Care workers
• Allowing councils to retain £111 million from the reform of Council Tax multipliers for higher value homes
• Provide the freedom to raise the Council Tax for all band homes by up to 3%, raising up to £70 million if councils choose to do so

In total this package will provide local government and local service with up to £240.6 million in additional funding and revenue.

Each of Scotland’s 32 local authorities will be required to formally agree to a set of joint commitments with the Scottish Government and in return will receive the full funding package.

Mr Mackay said:

“Today’s budget delivers a strong settlement for local government. The measures I have announced today mean that the total support from the Scottish Government and through local taxation provides an increase in spending power on local government services, not of £59.6 million, but of £240.6 million or 2.3 per cent.

“Local government will receive £120 million from central government to fund our shared ambitions to close the attainment gap.

“In addition we will maintain councils’ share of capital spending with an increase of £150 million compared to 2016-17.

“Councils will keep the full value of the revenue from Council Tax re-banding – every penny raised locally will be spent locally as councils see fit.

“And local authorities will also be free to increase the Council Tax generally by up to 3% next year, generating - if they so choose - a further £70 million.

“Last year, we transferred a quarter of a billion pounds from the NHS to support health and social care partnerships. I can announce today that on top of that transfer, we will provide additional funding of £107 million from the NHS next year.

“This additional funding will deliver the Living Wage for social care workers and protect overall investment in these crucial services.

“This will secure a total of £8bn for health and social care, ensuring that people have access to the right care, at the right time and in the right place.

“This additional investment in social care means that, in the coming year, there will not be an overall reduction in the funding provided by the Scottish Government to support Local Government services.

 “This is a settlement which invests in education, invests in social care and invests in local services.”

Background

 As part of the consultation process now underway adjusted allocations (tabled below) have been issued to local authorities * December 16, 2016.

Local Authority	Distributable Funding	2017-18 Additional Council Tax Reform Income	Total Support for Services
	£m	£m	£m
Aberdeen City	342.775	5.911	348.686
Aberdeenshire	430.405	8.326	438.731
Angus	205.129	1.725	206.854
Argyll & Bute	203.887	2.376	206.263
Clackmannanshire	97.116	0.952	98.068
Dumfries & Galloway	297.343	2.479	299.822
Dundee City	308.555	1.425	309.980
East Ayrshire	233.189	1.568	234.757
East Dunbartonshire	187.301	4.576	191.877
East Lothian	176.410	2.854	179.264
East Renfrewshire	179.448	4.123	183.571
Edinburgh, City of	772.796	16.129	788.925
Eilean Siar	102.743	0.142	102.885
Falkirk	285.202	2.490	287.692
Fife	648.552	6.368	654.920
Glasgow City	1343.172	7.217	1350.389
Highland	464.102	4.816	468.918
Inverclyde	168.695	1.277	169.972
Midlothian	158.280	1.815	160.095
Moray	160.450	1.134	161.584
North Ayrshire	295.314	1.915	297.229
North Lanarkshire	625.256	3.874	629.130
Orkney	72.838	0.171	73.009
Perth & Kinross	256.185	4.533	260.718
Renfrewshire	313.429	3.321	316.750
Scottish Borders	214.891	2.809	217.700
Shetland	86.092	0.188	86.280
South Ayrshire	204.446	2.871	207.317
South Lanarkshire	568.784	5.750	574.534
Stirling	171.979	3.529	175.508
West Dunbartonshire	190.555	1.018	191.573
West Lothian	315.935	2.861	318.796
Scotland	10,081.253	110.543	10,191.796