Local government funding 2020-2021: process overview

Overview of the process to determine the Local Government Finance Settlement for 2020 to 2021. The figures used are set out in Finance Circular 2/2020, which was agreed by Parliament prior to the COVID-19 pandemic, and so do not take account of additional COVID-19 funding.

Where did councils get their funding from?

In 2018-19 councils spent about £18 billion, that’s £3,300 per person in Scotland. They raised this mainly from four sources of income.

Service Income is income that councils receive directly linked to services they provide. It is treated separately and can only be used for the stated purpose, so this income is not considered in this publication.

That leaves £12 billion of general funding.

The largest share of general funding was Scottish Government grant, which in 2018-19 was £6.9 billion, or 58 per cent of general funding.

Non-domestic Rates, paid mainly by businesses, raised £2.6 billion, or 22 per cent of general funding.

Council Tax raised £2.4 billion, or 20 per cent of councils’ general funding.

Pie chart showing the four sources of council income

A complete analysis of Local Government spend is published in Scottish Local Government Finance Statistics 2018-19. The figures in that publication are in more precise technical categories and so may appear to be different from those published here. However, the two sets of figures are consistent.


Email: gaestatistics@gov.scot

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