Fiscal framework between Scottish Government and local government: progress report December 2023

The Verity House Agreement, signed on 30 June 2023 as part of the New Deal with Local Government, committed to concluding a Fiscal Framework which establishes early and meaningful budget engagement, the simplification and consolidation of the Local Government Settlement.

Local Taxation and Fiscal Flexibilities

The framework will build on the commitment of the Scottish Government and Local Government to enhancing local fiscal levers and flexibilities through the exploration of new opportunities, and to regularly evaluating existing local levers to ensure they are fit for purpose.

Notwithstanding Local Government’s desire to see more local discretionary powers, we have currently agreed a structured process of design and evaluation of fiscal levers. This will ensure that Scottish Government and Local Government currently have a mechanism to work together to deliver opportunities for fiscal empowerment. The framework will set this out, and key elements of this are already being brought to bear in current joint work to examine new levy and tax proposals, as well as reform of existing local taxes.

Scottish Government and Local Government consider that new fiscal levers, which are created to be administered and levied by Local Authorities, should favour local discretion, unless there is a legitimate reason that policy should be set nationally and there is agreement to that effect.



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