Scottish Local Government Finance - Green Book: 2024-2025

2 Changes Since the Last Settlement

2.1 Comparison to 2023-24 settlement

The needs-based indicators used in assessments have, where possible, been updated to use the most up-to-date data available, though a few elements are fixed, for example, some of the more detailed 2011 population census data.

A few lines have merged, and some individual totals have not remained at the same levels as the 2023-24 settlement. 

2.2 Terminology

As stated above, there has been a change in terminology for 2024-25. Whereas previously funding lines were classified as either GAE, redeterminations, or FRFGs, the lack of any distinction between these now has resulted in the classifications being unnecessary and unhelpful. All funding lines are now therefore referred to as GAE.

2.3 Data issues

The Data Issues Working Group (DIWG) is the technical advisory group, comprising of representatives of the Scottish Government and local government (including COSLA), which exists to assist the analytical work undertaken in support of the allocation calculations.  The work programme of the DIWG is directed by the Settlement and Distribution Group (SDG), which was established to oversee all matters relating to the local government finance settlement. Data issues dealt with through the DIWG, and agreed by the SDG, since the last settlement are listed below.  

Dual Indicator Review 2023

The Dual Indicator Review is undertaken for two reasons.  The first is to establish whether or not pairs of indicators currently used in the settlement calculations, and determined mathematically, continue to be valid by displaying a statistically significant relationship with past expenditure.  The second is to produce updated regression coefficients – the measure of the relationship between expenditure and the indicators – for use in the next Settlement.  The coefficients determine the amount of funding distributed on each indicator.  

Of the eight GAE lines distributed by this methodology in the previous settlement, seven returned significant values to confirm that the expected relationships still exist. The eighth, Consumer Protection, did not show a statistically significant relationship between the indicators and past spend. It was therefore agreed to roll forward the weights used in the 2023-24 settlement.  

2022 Population Census data

None of the Census data usually used in the settlement had yet been made available at the time of the 2024-25 settlement. Work on the Census caused the delay in publishing the 2022 mid-year estimates and so the 2022 Census-day population estimates were used for most of the population indicators. However, as these were only published in five-year bands, only those that fitted with the age-bands used in the settlement were used. In other cases the 2021 mid-year estimates were rolled forward, with the relevant cohort adjustment (i.e. where the 16-year old population was needed, the 15-year old population from 2021 was used). The tables below state in each case which population data have been used.

Child Deprivation indicators

Concerns were raised that the previously used Children in Low Income Families (cilif) data were seemingly excluding a considerable number of families who were on benefits, but whose health-related benefits resulted in them being above the threshold. This related particularly to two authorities. Newly available data on the number for children in receipt of Scottish Child Payment (SCP) were therefore introduced, in most cases alongside the more focussed cilif data, on a 50:50 basis, though for School Meals and School Clothing Grant only SCP data were used as more accurately reflecting the wide spread of these services. For Access to Sanitary Products - Public Bodies the relevant cut of SCP data were not available and so only cilif data were used.  

Standardised Mortality Ratios

The use of Standardised Mortality Ratios had previously been excluded from two of the Elderly Care Composite Indicators (though not from the third) for those aged 85+, due to concerns that the small numbers involved meant the data were unreliable. Since that decision in 1997, the 85+ category has increased by around 50 per cent in both population and deaths, and is now larger than other age-bands. The use of SMRs for 85+ has therefore been reintroduced, as recommended in the initial report. 

Rurality Indicators

Whereas the main rurality indicator (percentage of the population living outwith settlements of size 1,000) is usually only updated every ten years when new Population Census data become available, NRS now more regularly publish settlement data which can be used to create more frequent updates. The 2020 estimates were therefore used to create rurality indicators used for 2024-25.

For two GAE lines, Changing Children’s Services Fund and School Crossings, similar indicators were created just using child populations.

School Meals

Additional support for the phased expansion of universal free school meals to P6 and P7 has been added to the P6/P7 free meals element of the School Meals GAE line, resulting in an adjustment to the weights on each element, which are otherwise based on the breakdown of recent spend.

Removal of distinction between GAE and other lines

Two lines in the revenue settlement (National Priorities and Centres for Excellence) were based on total Education GAE lines (and so not the previous redeterminations and FRFGs), and so are now based on all Education-related funding lines. The Cities Growth Fund in the capital settlement also changed from being based just on the previous GAE lines to now being based on all funding lines.

Access to Sanitary Products - Public Bodies 

The deprivation indictor used changed from all adults on work-related benefits,  to female children in low income families aged 12+ and females on IS/JSA/UC up to age 54.

Fire Injury Payment and Police Transfer

As both of these lines were recognised as no longer related to local government spend, the amounts were merged into the changes column.

Supplementary Table 9 gives a list of the changes to formulae and methodology made during 2023.

2.4 Local Authority naming convention

Please note that City of Edinburgh and Na h‑Eileanan Siar have been placed in their alphabetical order, which differs from the order used in the Finance Circular.