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.

What information was used to calculate the allocations?

Each service area had a different funding formula. So, for example

  • The formula for street lighting distributed £60 million. It was shared out in proportion to the total length of roads in urban areas within each council.
  • The formula for Planning & Economic Development distributed £95 million. It was shared out partly in proportion to population, and partly in proportion to deprivation levels, with an extra allocation for island populations.

Just under half of the funding is distributed based on population or pupil numbers.

The formulae used the latest data and often took account of deprivation or rurality. Island populations were usually given a 10 per cent uplift because of their additional costs.

Sometimes councils were given a fixed amount each as part of the formula. In a few cases funding was decided on the basis of bids for funding.

Summary of the 110 different indicators used in the funding formula

Pie chart showing the proportions distributed on different indictors (broad categories)
Illustration showing the amounts distributed on different indicators (more detailed categories)


Email: gaestatistics@gov.scot

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