Funding of local government 2021 to 2022: process overview

Overview of the process to determine the local government finance settlement for 2021 to 2022. The figures used are set out in Finance Circular 5/2021, as agreed by Parliament. The publication relates to general funding, and excludes any additional COVID-19 funding provided over the last year.

Where do 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.

Total council spend 2018-19 - £18 billion

Pie chart showing the four sources of council income

A complete analysis of Local Government spend is published in Scottish Local Government Finance Statistics. 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.



Back to top