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.

How were councils protected against large changes in their allocation?

After we had calculated each council’s share, we compared them with the previous year and gave some councils extra support. This was done by setting a limit to the percentage reduction that they were allowed. The limit is called ‘the Floor’.

We worked out the average percentage change, comparing all bar a few areas of the formula. We then set the Floor slightly below that average. It meant that in 2020-21 councils were allowed, at worst, a 0.44% reduction.

Any council above the Floor paid into a pool. This pool was then distributed to the other councils to bring them up to the Floor.

In 2020-21 about £62 million was reallocated in this way.

Diagram illustrating the reduction in grant for those above the Floor, and increase for those below


Email: gaestatistics@gov.scot

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