Fiscal Framework between Scottish Government and Local Government

Multi-Year Allocations

33. The Scottish Government and Local Government acknowledge that robust multi-year budgeting can better enable long-term planning although a Fiscal Framework cannot in isolation provide multi-year certainty. Conversely, multi-year certainty could hypothetically be provided in the absence of a fiscal framework.

34. Despite the appeal of multi-year funding certainty, both parties recognise that without equivalent clarity from the UK Government, it is not realistic for Scottish Government to offer multi-year funding commitments given the prominence of the adjusted block grant in the Scottish Government’s funding position

35. As outlined in the Written Agreement between the Scottish Government and the Finance and Public Administration Committee on the Budget Process, there is a presumption that the Scottish Government will carry out a Spending Review following the publication of equivalent UK Spending Review.

36. The Chancellor of the Exchequer’s commitment in the Autumn Budget 2024 Statement to set resource budgets for three years and capital budgets for five years, with reviews every two years, will provide key funding information to help underpin the Scottish Government’s own multi-year spending review. The details of the first UK Government Spending Review following this commitment were published on 11 June 2025.

37. It is anticipated that the approach proposed by the Chancellor will provide greater clarity and certainty over the Scottish Government’s funding position moving forward, creating the foundations to allow the Scottish Government to adopt a multi-year approach to funding public services in Scotland which we will take forward through the next Scottish Spending Review.

38. Where a multi-year spending review provides an indicative planning assumption for Local Government overall, Local Government may request indicative council level allocations for future year(s) be provided in addition to the overall settlement figure within the spending review. Decisions on distribution, such as the application of changes or the approach to updating indicators will be considered by Settlement and Distribution Group in the normal way.

39. As with previous Spending Reviews, these will be indicative only on the basis of the baseline set out by the UK Government and will necessarily be subject to change for a range of factors. It is anticipated that this will be set out in an accompanying explanatory memorandum.