1. Local Government Revenue Expenditure and Income
1.1 Total Revenue Income and Expenditure
Total gross revenue expenditure by local government in Scotland in 2012-13 was £16.8 billion. The majority of expenditure is in the general fund although over £1 billion of expenditure was in the Housing Revenue Account (HRA) and Significant (Internal) Trading Operations. Further details on these different funds are laid out in sections 2.2 and 2.3.
Table 1.1 details revenue income and expenditure for 2012-13. Throughout the table expenditure is positive and income negative. The biggest single element of gross expenditure were employee costs which account for £7.70 billion of all expenditure. The second largest element was operating costs (which includes property costs, supplies and services costs, transport and payments to agencies and other bodies) which account for £7.12 billion.
Transfer payments are those made to individuals for which no goods or services are received in return by the local authority. The majority of transfer payments are housing benefits which make up £1.66 billion of the total of £2.04 billion. An adjustment for Inter Account and Inter Authority Transfers is made to the gross expenditure to take account of transfers between local authorities and between different services within an authority and ensure that expenditure is not counted twice.
Support services are those paid for services that support the provision of services to the public (including IT, Human Resources, Legal Services, Procurement Services and Corporate Services). In 2012-13 as part of a wider review of the Local Financial Returns (LFRs) the definition of support services was changed to be more prescriptive as to what should and should not be included. This was done to improve comparability of support services costs between local authorities and means that data for support services expenditure in 2012-13 may not be directly comparable with past years.
The surplus or deficit on the provision of service provides an important link between income and expenditure data, and data on reserves, debt and interest costs which were previously collected separately. This allows a greater level of analysis to be undertaken on the relationship between authorities' expenditure, income, funding, debt and reserves. The impact of this can be seen in a number of the tables in Sections 1 and 3 of this publication, in particular in Tables 1.1 and 3.1 which now link together what councils spend, raise and receive with the reserves they hold.
Local authorities are required to ensure that their LFRs are directly comparable to their published audited accounts. This should ensure that the data provided is more comparable across authorities and there is less opportunity for error when classifying expenditure across different services within an authority.
Table 1.1 - Total Revenue Income and Expenditure, 2012-13
|Total||General Fund Services1||Housing Revenue Account||Significant Trading Operations||Road Bridges||Common Good Fund|
|Support Service Costs||900,480||806,506||64,442||28,972||115||445|
|Revenue Contributions to Capital||285,369||94,151||190,810||368||0||40|
|Adjustment for Inter Account and Inter Authority Transfers||-1,225,637||-568,298||-28,890||-621,143||-4,979||-2,327|
|Other Grants Reimbursements and Contributions||-824,685||-790,289||-10,567||-17,497||-6,300||-32|
|Customer and Client Receipts||-2,581,251||-1,296,127||-1,034,306||-239,625||-80||-11,113|
|Net Revenue Expenditure (excl Ring Fenced Grants)||10,764,094||11,062,821||-234,478||-53,969||-11,458||1,178|
|Pension interest and expected gains / losses on IAS 19||265,113||262,851||2,170||0||92||0|
|General Revenue Funding||-7,782,446||-7,782,446|
|NDRI Distributable Amount||-2,296,949||-2,296,949|
|Arrears of Local Tax Collection||1,806||1,806|
|Depreciation and Impairment of non-current assets||1,769,939||1,545,687||217,084||7,168|
|Amortisation and Impairment of Intangible Assets||8,561||8,471||90||0|
|Movement in the fair value of investment properties||-4,164||-4,395||208||23|
|Surplus or deficit on Trading Operations not included above||0||-43,642||0||43,642||0|
|Surplus or deficit on Significant Trading Operations not included above||-2,811||-2,811|
|Gain or loss on the disposal of Property, Plant and Equipment||54,121||53,930||95||96|
|Reversal of Employer's contribution to pension fund/benefits payments made||-460,743||-443,868||-16,458||-417|
|Post-retirement benefits - IAS 19||803,138||784,578||18,191||369|
|Short term accumulating absences||-24,266||-24,473||224||-17|
|Govt Capital grants and contributions credited to the CI&ES||-592,145||-555,933||-34,612||-1,600|
|Non- Govt Capital grants and contributions credited to the CI&ES||-54,942||-50,356||-4,586||0|
|Reversal of Revenue Contribution to Capital||-284,961||-94,151||-190,810||0|
|Difference in Requisitions||8,516||8,516||0||0|
|Surplus or deficit on the provision of services||452,405||595,255||-137,040||-5,810|
2. Excluding General Revenue Funding
Source: Local Financial Returns - LFR 00
1.2 Non-General Fund Revenue Income and Expenditure
The Housing Revenue Account (HRA) records income and expenditure relating to Local Authority housing stock. Whilst most other Local Authority services are funded through a combination of non-domestic rates and council tax income plus Government grants, the HRA is a ring-fenced account, and expenditure is funded by housing rents and Government subsidies.
1.2.2 Trading Services
Trading service accounts cover the finances of Local Authority operated services that are commercial in nature. They are financed by the charges made by a Local Authority to the recipients of the services they provide.
The main trading services are Local Authority Transport (buses, ferries and other Local Authority transport undertakings), Fishery harbours and markets and other trading services (including airports, other harbours and bridges).
1.2.3 Road Bridges
From 2008-09, the funding arrangements for the Forth and Tay bridge authorities changed. Under the Abolition of Bridge Tolls (Scotland) Act 2008, the bridge authorities stopped receiving income from tolls and, instead, started receiving a revenue grant from Transport Scotland. For capital expenditure, bridge authorities also started receiving a capital grant from Transport Scotland, so are no longer reliant on borrowing through their constituent authorities from the Loans Fund. Despite this change in funding, Local Authorities continue to provide services for the bridge authorities by way of contract.
1.2.4 Common Good
Common good funds and assets are those held by local authorities which were, in effect, gifted to the local community (usually a previous burgh council). When managing common good funds and assets, local authorities are expected to have regard to the interests of inhabitants of the former burgh area to which the assets relate (except for Aberdeen City, Dundee City, City of Edinburgh and Glasgow City, where the local authority should have regard to the interests of all residents in the council area).
Common Good Fund income and expenditure is recorded in a separate set of accounts. Some property held within a Local Authority's Common Good Fund can be sold, while some must be maintained in trust for the community. The fund is used for projects that are for the common good of all residents.
1.3 General Fund Revenue Income and Expenditure
The highest spending service in the general fund is education which had net expenditure of £4.59 billion (this makes up 40% of net expenditure). Of this total £1.76 billion was spent on primary education and £1.87 billion on secondary education with the remainder spent on pre-primary, special and community education. Education's share of total net expenditure has stayed the same at around 40% over the six years to 2012-13.
Social work is the next largest service with net expenditure of £2.96 billion (26% of total net expenditure). Data on social work expenditure is collected on the basis of client groups. Of the client groups identified in the LFRs, older persons has the highest expenditure of £1.29 billion followed by children and families with £0.82 billion and adults with learning difficulties with £0.50 billion.
A full breakdown of expenditure by sub-service is available in Annex A.
The single largest income source shown in Table 1.2 are the grants received by local authorities from the Department of Work and Pensions to fund housing benefits. These grants were worth £1.71 billion in 2012-13 and are shown as part of income in non-HRA housing.
Another significant source of income is customer and client receipts (including all charges to service users) which raised £1.30 billion across all services. Social work services also receive income from the NHS to provide services, the value of these payments in 2012-13 were £0.40 billion, up from £0.38 billion in 2011-12. A full breakdown of income by service can be found in Annex B.
Table 1.2 - General Fund Revenue Income and Expenditure, 2012-13
|Gross Expenditure||Income||Net Expenditure||Net Expenditure as % of Total Services||Ring Fenced Revenue Grants|
|Cultural and Related Services||703,107||89,432||613,675||5.3%||0|
|Roads and Transport||695,844||208,566||487,278||4.2%||0|
|Planning & Economic Development||483,638||201,088||282,550||2.4%||0|
|Net Cost of Service||15,768,721||4,180,943||11,587,778||100.0%||524,957|
|Interest and Investment Income||683,665||64,529||619,136||0|
|Statutory Repayment of Debt||595,343||0||595,343||0|
|Contributions to/from HRA||0||0||0||0|
|Surplus/deficit from Significant Trading Operations||-2,811||0||-2,811||0|
Source: Local Financial Returns - LFR 00
Revised accounting arrangements for Public Private Partnerships (PPP) and Public Finance Initiatives (PFI) were introduced from 1st April 2009. Therefore, from 2009-10 onwards revenue expenditure, statutory repayment of debt and interest and investment income for services in which there are PPP or PFI schemes is not directly comparable with previous years. See section 5.2 for further details. This affects the level of service expenditure when comparing 2008-09 to 2009-10 (and later years), especially in education where most councils have a PPP or PFI scheme in operation.
Table 1.3 - Net Revenue Expenditure by Service, 2008-09 to 2012-13
|Cultural & Related Services||628||662||638||618||614|
|Roads & Transport||453||486||503||477||487|
|Planning & Economic Development||289||332||313||292||283|
|Total General Fund Expenditure||11,670||12,096||11,892||11,510||11,588|
1. From 2010-11 the funding of Police Pensions changed leading to a reduction in net expenditure. Therefore police expenditure figures from 2010-11 onwards are not directly comparable with figures up to 2009-10.
Source: Local Financial Returns - LFR 00
Chart 1.1 shows net revenue expenditure per capita by local authority area. This includes expenditure by all local authority bodies in an area (i.e. including expenditure by councils, police boards, fire boards, valuation boards and regional transport partnerships). The chart shows that on average in Scotland local government spent £2,409 per person in 2012-13, down slightly from 2,416 in 2011-12.
Wide variation is seen in net revenue expenditure per head for different local authority areas. This reflects variations in the cost of providing services due to factors such as deprivation, rurality and population age profile, as well as additional costs for island authorities (which clearly have the highest net revenue expenditure per head). Details of how these factors are taken into account in the needs-based methodology central to local government funding distribution can be found on the Scottish Government Grant Aided Expenditure Website.
Chart 1.1 - Net Revenue Expenditure per Capita by Local Authority, 2012-13 (£)
1.4 Revenue Expenditure Financing
Revenue expenditure by local authorities is funded by three main sources:
- Grants from Central Government
- Local Taxation (Council Tax and Non Domestic Rates)
- Sales, fees and charges for services
The main source of revenue income for local government is General Revenue Funding, (formerly referred to as the Revenue Support Grant). General Revenue Funding (GRF) is paid by the Scottish Government in support of local authorities' general net revenue expenditure.
Local taxation contributed over £4 billion to the funding of local government in 2012-13 and further information on these taxes is set out in the following sections. Other income is mostly composed of grants and subsidies received from central government and other parts of the public sector.
Table 1.4 - Revenue Income by Source, 2008-09 to 2012-13
|General Revenue Funding1||7,426||7,757||8,149||7,790||7,782|
|Council Tax Benefit Subsidy||351||368||375||376||371|
|Non Domestic Rates||1,963||2,165||2,068||2,182||2,263|
|Sales, Rents, Fees & Charges||2,262||2,287||2,179||2,298||2,342|
|Total revenue income||17,274||17,877||18,043||17,872||17,949|
1. Prior to 2008-09 this was Revenue Support Grant
Sources: General Revenue Funding (Up to 2010-11) - Finance Circulars; Non-Domestic Rates - Non Domestic Rates Returns (NDRI); All Other Data - Local Financial Returns (LFRs)
Chart 1.2 - Revenue Income by Source, 2012-13 (£ millions)
1.4.1 Council Tax
Council Tax was introduced in Scotland on the 1st April 1993 to replace the Community Charge system. It is a tax system based on dwellings, contributing around £1.9 billion (excluding council tax benefit) of income to local authorities in 2012-13. A dwelling is classified as any kind of flat or house that is used as a place of residence. Each dwelling is placed into one of the 8 council tax bands (A to H) depending on the market value of the dwelling as at the 1st April 1991.
Table 1.5 - Chargeable Dwellings1 by Council Tax Band & Local Authority (as at 2 September 2013)
|Band A||Band B||Band C||Band D||Band E||Band F||Band G||Band H||Total|
|Valuation band ranges||Under 27,000||27,001 to 35,000||35,001 to 45,000||45,001 to 58,000||58,001 to 80,000||80,001 to 106,000||106,001 to 212,000||Over 212,000|
|Ratio to band D||6/9||7/9||8/9||9/9||11/9||13/9||15/9||18/9|
|Argyll & Bute||7,244||9,455||8,721||5,791||7,052||4,001||2,711||219||45,194|
|Dumfries & Galloway||10,659||22,123||11,475||9,602||10,092||4,916||2,335||156||71,358|
|Edinburgh, City of||19,773||42,887||40,211||34,128||35,957||22,561||19,918||3,645||219,080|
|Perth & Kinross||8,464||14,087||11,171||9,981||11,044||6,927||5,541||639||67,854|
|% of all dwellings||21%||24%||16%||13%||13%||7%||5%||1%||100%|
Source: Council Tax Base 2013 (CTAXBASE)
Table 1.5 details the band boundaries, the ratio to band D council tax (the multiplier) and the number of chargeable dwellings in each band by local authority. As at 2nd September 2013, there were 2.4 million chargeable dwellings in Scotland. Around three quarters (1.8 million) of all chargeable dwellings were in council tax bands A to D, and only 0.5% (12,355 dwellings) in band H. The total number of chargeable dwellings and the distribution of those dwellings across council tax bands varies across local authority areas. For example, 78% (10,798) of all chargeable dwellings in Eilean Siar are in bands A to C, compared with 64% (23,198) in Midlothian, and 27% (10,097) in East Renfrewshire. This is a consequence of variation by local authority in the market value of dwellings.
Council tax is used as a source of funding to make up the difference between the amount of money a local authority wishes to spend, and the amount of funding it receives from other sources (such as General Revenue Funding and ring-fenced revenue grants). Each local authority determines its own level of council tax as part of their budget setting process, establishing the band D council tax level. As a result, council tax levels differs across local authority areas ranging from £1,024 in Eilean Siar to £1,230 in Aberdeen City (as shown in Chart 1.3). The council tax charged for all other bands is a proportion of the band D level set (see ratios to band D in table 1.5).
The Scotland band D council tax level over the past 5 years can be seen in table 1.6. Council tax levels remain constant (at 2007-08 levels), as a consequence of the council tax freeze agreed between the Scottish Government and local government. As a result, the average council tax per dwelling has also remained flat since 2007-08, with any small changes reflecting movement in the council tax base (such as changes in the total number of dwellings, the distribution of those dwellings across council tax bands, and the number of discounts and exemptions). In real terms, the level of band D council tax has fallen in each year since 2007-08. Prior to 2007-08, both cash and real terms increases were seen as the band D council tax level increased year on year.
Table 1.6 - Scotland Council Tax Levels
|Scotland Average Band D Council Tax (£)1||1,149||1,149||1,149||1,149||1,149|
|Band D % increase (cash terms)||0.0%||0.0%||0.0%||0.0%||0.0%|
|Band D % increase (real terms)2||-2.7%||-2.6%||-2.3%||-1.8%||-2.0%|
|Average Council Tax Bill per Dwelling (£)3||987||985||984||985||988|
1. Since 2008-09, Council Tax rates have been frozen at 2007-08 levels.
2. Real terms figures are calculated using GDP deflators (HM Treasury Dec 2013)
3. This average is taken over all chargeable dwellings and is affected by a number of factors such as the distribution of dwellings across council tax bands, discounts and exemptions, new construction and removal of demolished housing from the roll.
Source: Council Tax Assumptions (CTAS), Council Tax Base (CTAXBASE)
Chart 1.3 - Band D Council Tax Bill Amount by Local Authority, 2012-13 (£)
Source: Council Tax Assumptions (CTAS) returns
The Band D council tax levels by local authority are shown in Chart 1.3. As a result of the Council Tax Freeze, band D council tax levels have not changed since 2007-08. The one exception is in Stirling where the council took the decision to reduce the band D council tax from £1,223 in 2007-08 to £1,209 in 2008-09, and subsequently to £1,197 in 2012-13.
Not all dwellings are liable to pay full council tax. A dwelling may be eligible for a discount or exemption dependent on either the status of the dwelling or the personal circumstances of the persons resident in the dwelling. If a dwelling is exempt there is no council tax payable in respect of that dwelling. If a dwelling is eligible for a discount then these may range from 10% to 50% depending on the nature of the discount.
In addition part, or all, of the council tax bill may be paid through council tax benefit (CTB) for those who qualify.
An exempt dwelling can be occupied or unoccupied. Examples of unoccupied exempt dwellings include dwellings that are unoccupied and unfurnished for up to 6 months, dwellings that cannot be occupied because they are in need of structural repair, or are being improved or reconstructed, or an unoccupied dwelling where the liable person was formerly resident and has moved to receive personal care elsewhere. Occupied dwellings eligible for exemption include dwellings that are the sole residence of only persons under the age of 18, dwellings occupied only by students, and dwellings used as trial flats by registered housing associations.
Where only one council tax liable adult resides in a dwelling they are entitled to claim a 25% discount on their council tax bill. Where a dwelling is classed as a second home or long term empty, that dwelling is entitled to claim a discount of between 10% and 50% depending on the Local Authority. Unoccupied dwellings may also be eligible for a 50% discount for the 6 months after the initial 6 month exemption.
A breakdown of council tax dwellings by classification as chargeable, discounted, or exempt from 2009 to 2013 is given below in Table 1.7. The total number of dwellings has increased by around 49,000 (2%) from 2.477 million dwellings in 2009 to 2.527 million in 2013. Similarly, the number of chargeable dwellings has increased by around 45,000 (2%) from 2.365 million chargeable dwellings in 2009, to 2.410 million in 2013. The proportion of dwellings exempt, chargeable or discounted has remained steady over time with around 4.5% of all dwellings exempt from paying council tax, and 42% of all chargeable dwellings discounted. In 2013, there were 116,372 exempt dwellings and 1,016,891 discounted dwellings.
Table 1.7 - Council Tax Chargeable Dwellings, Discounts and Exemptions1
|Chargeable dwellings subject to:|
|Long Term Empty2||22,169||24,598||25,356||25,454||27,327|
|Occupied entirely by disregarded adults||2,668||1,887||1,910||1,809||1,579|
|Dwellings not subject to discount||1,366,375||1,371,072||1,376,998||1,385,799||1,393,440|
1. As at the first Monday in September of each year
2. It is not possible for some councils to separately identify second homes and long term empty dwellings. For these councils, the total number of second homes and long term empty dwellings have been recorded under second homes.
Source: Council Tax Base (CTAXBASE) Returns
Local Authorities are responsible for the billing and collection of council tax. Each individual bill is calculated by applying the multiplier for each band to the band D council tax level, and the applying any discounts, exemptions or reductions as detailed above. At the start of each financial year local authorities issue council tax bills to households liable for each bill. They collect council tax income relating to these bills over the year, and also continue to collect late amounts from previous billing years. The amount of council tax income collected in 2012-13 are reported in table 1.8 below.
Table 1.8 - Council Tax Income by Local Authority, 2012-13
|Council Tax Income (excl CTB)1||Council Tax Benefit Subsidy (CTB)||Council Tax Income (incl CTB)1|
|Argyll & Bute||41,248||5,927||47,175|
|Dumfries & Galloway||53,869||9,368||63,237|
|Edinburgh, City of||203,437||28,657||232,094|
|Perth & Kinross||64,729||7,101||71,830|
1. Includes Community Charge
Source: Local Financial Returns - LFR 12
1.4.2 Non-Domestic Rates
Non-domestic Rates (NDR) are a property tax paid by the owner/occupier or tenant of a non-domestic property. NDR bills are calculated using the rateable value of non-domestic properties, multiplied by a poundage set nationally by Scottish Ministers, less any relief or exemption entitlement. In 2012-13, the income raised from NDR was £2.35 billion.
The principles of non-domestic rates were established in the Lands Valuation (Scotland) Act of 1854. This act also provided for the appointment of the Scottish Assessors, who are responsible for determining the classification and valuation of non-domestic and domestic properties, and are independent of both the Scottish Government and local authorities. A non-domestic property is an individual property used for non-domestic purposes including businesses, public buildings and advertising hoardings. The value given to a property is called its rateable value (RV).
As a property tax, the RV of a property (a legally defined valuation, broadly based on rental values) is a reflection of its value rather than profitability, turnover or output of the business. It is established at revaluation where the Scottish Assessors assess rateable values for all non-domestic properties, taking account of the type and nature of the property. All non-domestic properties and their corresponding RVs are listed on the Valuation Roll, maintained by the Scottish Assessors. Table 1.9 shows the composition of properties (and associated RV) on the Valuation Roll by property type. As at 1st April 2013, there were 219,441 properties with a total RV of £6.7 billion.
Table 1.9 - Non-Domestic Rates Properties by Classification (as at 1 April 2013)
|Number of properties||Rateable value (£000s)|
|CATEGORY||1st April 2013||1st April 2013|
|Education and Training||3,832||514,237|
|Garages and Petrol Stations||4,415||65,910|
|Health and Medical||3,168||210,377|
|Leisure, Entertainment, Caravans etc.||20,516||236,107|
|Public Service Subjects||9,988||321,401|
|Quarries, Mines, etc.||696||26,657|
|TOTAL ALL NON-DOMESTIC PROPERTIES||219,441||6,716,299|
Source: Scottish Assessors Valuation Roll, 1st April 2013
Table 1.10 provides a breakdown of properties on the Valuation Roll by local authority and RV band. Around 78% of all properties (170,575 properties) have a Rateable Value less than or equal to £18,000.
Table 1.10 - Non-Domestic Rates Subjects by Local Authority (as at 1 April 2013)1
|Local Authority||Rateable Value Band||Total Non-Domestic Properties|
|<= £18,000||£18,001 to £34,999||>= £35,000|
|Argyll & Bute||7,429||347||346||8,122|
|Dumfries & Galloway||8,118||491||550||9,159|
|Edinburgh, City of||13,144||2,393||3,934||19,471|
|Perth & Kinross||6,937||588||723||8,248|
1. Includes properties with zero rateable value.
Source: Scottish Assessors Valuation Roll, 1st April 2013
Table 1.11 shows the annual NDR Income, total Rateable Value, and Poundage Rate, as well as their changes over time. As a consequence of the 2010 revaluation, the poundage was reduced from 48.1p in 2009-10 to 40.7p in 2010-11 and the total RV of non-domestic properties (the tax base) increased from £5.3 billion in 2009-10 to £6.6 billion in 2010-11. The next revaluation will take place in 2017.
Table 1.11 - Non-Domestic Rates Income, Total Rateable Values and Poundage Rate
|Non Domestic Rates Income (£m)1||2,010||2,138||2,251||2,347||2,446|
|Total Rateable Value (£m)||5,299||6,612||6,678||6,718||6,716|
|Poundage Rate (pence)||48.1||40.7||42.6||45.0||46.2|
1. Councils' notified (pre-audit) estimate of income for 2012-13 and mid-year estimate of income for 2013-14
Sources: NDR Income - Non-domestic Rate Income Returns, Rateable Value - Scottish Assessors Valuation Roll as at 1st April
Table 1.11 also shows that the total RV has increased slightly since the 2010 revaluation from £6.61 billion to £6.72 billion in 2013-14. This is due to the net impact of several factors including increases in the tax base from new properties or extension of existing properties, and decreases as demolished properties are deleted from the valuation roll or as the RV is reduced as a result of appeals. As Non-Domestic Rates bills in Scotland are directly related to the rateable values of individual non-domestic properties, changes in the total RV impact on the amount of NDR available for collection.
Inflation is a key driver of growth in NDR income as the poundage rate, set nationally by Scottish Ministers, is typically tied to the Retail Price Index (other than in the first year of a revaluation). NDR bills are calculated by multiplying the RV of a property by the poundage rate, and then applying discounts and exemptions. Large business properties also pay a supplement to the poundage rate, known as the Large Business Supplement (LBS), which is used to fund a portion of the Small Business Bonus Scheme (SBBS). The LBS was 0.8p in 2012-13 for properties with a Rateable Value greater than £35,000. For the period 2012-13 to 2014-15, large retailers that sell both alcohol and tobacco will also pay the Public Health Supplement (PHS) - an additional 9.3p on the poundage rate in 2012-13. These supplements increase the amount paid in NDR bills. Conversely, exempt properties (which do not pay rates), and relief schemes can significantly reduce the amount paid in NDR bills, and therefore the NDR income.
Table 1.12 summarises the total number of properties and rateable value as at 1st April 2013, and the NDR income collected in 2012-13 and estimated income for 2013-14 by local authority (net of reliefs). Income for 2013-14 is estimated at £2.45 billion compared to £2.35 billion in 2012-13. The higher poundage rate (due to the normal annual inflation) will have contributed to this estimated increase in income. The net change in the tax base will also be a factor, including the impact of revaluation appeals (which can in some cases result in significant annual fluctuations at a local authority level).
Table 1.12 - Non-Domestic Rates Properties, Rateable Values and Income By Local Authority1
|Authority||Non-Domestic Properties2 Apr-13||Non-Domestic Rateable Values Apr-13||Non-Domestic Rate income|
|Argyll & Bute||8,122||85,674||27,419||24,417|
|Dumfries & Galloway||9,159||119,551||42,021||44,577|
|Edinburgh, City of||19,471||912,555||319,909||342,803|
|Perth & Kinross||8,248||150,182||50,276||52,041|
1. Rates bills for specific utilities are collected by specified councils on behalf of all 32 councils, and appear on the valuation roll for those councils: South Lanarkshire (Electricity), West Dunbartonshire (Gas), Fife (Water), Falkirk (Docks and Harbours), Highland (Railways), Renfrewshire (Telecommunications). This increases the take for those authorities.
2. Includes properties with a zero rateable value
3. Notified (pre-audit) estimate of Income
4. Mid-year estimate of Income
Source: Number of Properties and Rateable Value - Scottish Assessors Valuation Roll 1st April 2013; NDR Income - Non-domestic Rate Income Returns provided by Councils
NDR Income - Non-domestic Rate Income Returns provided by Councils
Table 1.12 shows geographical variations in the number of properties, rateable value and NDR income. It should be noted however that some councils have responsibility for collection of NDR for specific utilities as detailed in the footnote to the table. For these councils, the entries on the valuation roll and NDR income include Scotland-wide data for the specified utilities sectors. The 2013-14 income data in table 1.12 are mid-year estimates which provide an indication of income but may change significantly, particularly at local authority level, when final data are available.
Table 1.13 - Amount of Non-Domestic Rates Relief Provided by Relief Type1
|Unoccupied Property/Partly Unoccupied Property||127,385||153,361||145,936||157,862||169,134|
|Disabled persons relief||42,914||45,484||51,901||54,372||57,580|
|Rural Rate Relief||3,887||3,918||4,129||4,218||4,313|
|Renewable Energy Relief Scheme4||3,560||4,126||4,811|
1. Estimates include mandatory and discretionary elements of relief where applicable, but exclude backdated payments of relief
2. Notified (pre-audit) estimate of relief expenditure for 2012-13
3. From 1 April 2008, the Small Business Rates Relief Scheme was replaced with the Small Business Bonus Scheme.
4. The Renewable Energy Relief Scheme was introduced at 1 April 2010
Source: Non-domestic Rate Income Returns
There are a number of types of NDR relief that reduce the NDR bill for qualifying properties. Table 1.13 shows the main types of relief available and the amount of relief provided each year from 2008-09 to 2012-13.
The gross amount of relief provided increased substantially from £389 million in 2008-09 to £588 million in 2012-13. Key reasons for this are increases in the poundage rate (due to normal annual inflation) and an increase in relief provided through the Small Business Bonus Scheme, with expansion of the scheme thresholds and greater awareness of the scheme likely to be contributory reasons. Further secondary factors are likely to include growth in the tax base over this period (i.e. an increase in the overall Rateable Value) and changes to amounts awarded for other reliefs (for example an increase in Charity Relief and the introduction of the Renewable Energy Relief Scheme).
The total NDR income collected by Local Authorities is pooled at the Scotland level. Each council reports the NDR collected to the Scottish Government to be included in the central pool. The amount to be re-distributed from the pool is known as the Distributable Amount (DA) and is set by the Scottish Government before the start of the financial year in question.
From 1st April 2011, the distribution methodology provides that Councils retain what it is estimated they can collect in business rates (rather than the previous policy where it was redistributed on the basis of population shares). As the combined total of NDR income and General Revenue Funding (GRF) provided to councils is guaranteed by the Scottish Government, any reduction in the amount of NDR collected is compensated for by a corresponding increase in GRF and vice versa. Any surpluses or deficits are paid out or recovered from Councils in the calculation of future years distributable business rates totals. The DA is based upon a forecast of the NDR income and prior year adjustments, and is therefore not guaranteed to match the total contributions to the pool for that year.
Table 1.14 - Non-Domestic Rates Distributable Amount by Local Authority, 2012-13
|Non-Domestic Rate Income (£000s)|
|Argyll & Bute||26,479|
|Dumfries & Galloway||41,403|
|Edinburgh, City of||310,993|
|Perth & Kinross||47,331|
Source: Finance Circular 3/2012
1.4.3 Sales, Rents, Fees and Charges
Local Authorities receive income from sales, rents, fees and charges as a result of providing services. These services are wide ranging in nature, as is the amount of income associated with each service, as detailed in Table 1.15 below.
Table 1.15 - Sales, Rents, Fees and Charges
|Cultural & Related Services||78,621||85,516||81,521||77,479||71,357|
|Police, Fire & Emergency Planning||88,557||93,043||55,098||66,575||111,992|
|Roads & Transport||146,605||165,941||146,068||171,674||154,117|
|Planning & Economic Development||112,644||120,146||97,897||118,518||116,541|
|Total GF Sales, Rents, Fees and Charges||1,333,345||1,321,900||1,192,210||1,321,294||1,296,127|
|Common Good Fund||8,324||9,073||7,168||10,809||11,113|
|Total Sales, Rents, Fees and Charges||2,261,977||2,286,816||2,179,038||2,298,105||2,341,626|
1. The Housing Revenue Account (HRA) records income and expenditure relating to Local Authority housing stock
Source: Local Financial Returns (LFRs)
Email: Euan Smith
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