Fiscal Framework between Scottish Government and Local Government

Forward Work Plan

Scrutiny and Accountability

45. Both Local Government and the Scottish Government are accountable to the electorate – the people of Scotland who we serve together. At a local level, council administrations and councillors are held to account within council chambers. At a national level, the Scottish Parliament holds the Scottish Government and Scottish Ministers to account. The Scottish Parliament has a legitimate interest in collective delivery of outcomes across the public sector and takes an interest in the actions of individual councils or Local Government collectively.

46. The operation of the fiscal framework will also be supported by the robust assurance and accountability arrangements agreed as part of the Verity House Agreement.

47. These arrangements will support transparency and provide assurance that, within the funding available to Local Government, local authorities are delivering improved outcomes in each of the three shared priority areas, either individually or jointly with Scottish Government and other partners.

Key Priorities for 2025-26

48. On 11 June 2025, the UK Chancellor of the Exchequer published a multi-year spending review providing departmental spending envelopes for resource funding for each of 2026-27, 2027-28 and 2028-29, with an additional year for capital (2029-30), and setting out a high-level assessment of the Scottish Block grant over that same period. Initial engagement on the outcome of the UK Spending Review has already taken place and the Framework for the Scottish Spending Review published alongside the Medium-Term Financial Strategy signals the formal start to the Scottish Spending Review process. Detailed plans for resource spending and capital investment for next year and future years will be developed and presented alongside the 2026-27 Scottish Budget towards the end of this year and this Framework commits to open and substantive engagement with Local Government as that work progresses.

49. Ongoing engagement has identified mounting pressure within capital budgets, it is therefore proposed that joint work to understand these pressures is taken forward. Additionally, the Scottish Budget 2025-26 made available £40 million of capital funding for the purposes of responding to the climate emergency. As one of the key priorities in the Verity House Agreement, it is understood that the Scottish Parliament are likely to take strong interest in how that funding has been prioritised locally. To avoid the need for burdensome reporting and monitoring, it is agreed that budget engagement should prioritise the challenge of outlining how Local Authorities have collective responded to the climate emergency.

50. Ongoing engagement and budget correspondence have recognised the pressures affecting Health and Social Care Partnerships in 2024-25 and 2025-26. It is therefore proposed that joint work to understand these pressures is also prioritised ahead of the Scottish Budget 2026-27

51. Routine engagement between officers and officials will ensure that any emerging issues are also given due prominence through the budget engagement process.