The Scottish Government's Medium-Term Financial Strategy

Annex A: Central Resource Spending Outlook

Note on Local Government funding

The figures set out in this table reflect the funding made available to local government by Scottish Government through the combination of General Revenue Grant, including Specific Revenue Grants, and forecasts of income raised locally by Non-Domestic Rates. This only reflects c. 50% of actual expenditure by local government which is otherwise funded by service fees and charges and council tax.

Local government is subject to similar spending pressures as the rest of the public sector. Our underlying assumption therefore is that the same inflationary and pay and workforce assumptions should apply to local government as to the rest of the public sector excluding the NHS, and that we recognise that the same demographic pressures experienced by health and social care, apply to social care services delivered by local government. We have applied pay, price and social care inflation on a pro rata basis to the split of pay, social care and 'other' expenditure across local government as reported in the 2021-22 Scottish Local Government finance statistics.

The resource funding made available to local government in 2023-24 includes an additional £343 million over and above the allocation published in the 2023-24 Scottish Budget document, and a further £120.6 million (that was previously allocated as capital) from 2024-25. These reflect funding previously agreed with COSLA to support local government pay deals.