Publication - Statistics

Scottish local government financial statistics 2017-2018

Published: 26 Feb 2019

Annual publication providing a comprehensive overview of financial activity of Scottish local authorities based on authorities audited accounts.

83 page PDF

1.9 MB

83 page PDF

1.9 MB

Contents
Scottish local government financial statistics 2017-2018
1. Local Government Revenue Expenditure and Funding

83 page PDF

1.9 MB

1. Local Government Revenue Expenditure and Funding

The revenue account is used for day-to-day costs, such as paying salaries, bills and rent.

Net Revenue Expenditure is the element funded through General Funding (which is made up of General Revenue Grant, Council Tax and Non-Domestic Rates).

Gross Revenue Expenditure is the total expenditure less inter/intraauthority transfers.

Gross Expenditure by Funding Source, 2017-18, £thousands

  • Gross Revenue Expenditure on services increased by 1.8% to £15.9 billion in 2017-18;
  • Net Revenue Expenditure on services increased by 0.8% to £10.1 billion;
  • Net Revenue Expenditure on vEducation increased by 0.3% to £4.8 billion;
  • Net Revenue Expenditure on Social work decreased by 0.3% to £3.1 billion;
  • General Funding increased by 0.4% to £11.8 billion;
  • Service income increased by 3.6% to £5.8 billion.

Revenue Income and Funding (£thousands)

1.1 Total Revenue Expenditure and Funding

The two main local authority accounts are the revenue account and the capital account. The revenue account is used for day-to-day costs, such as paying salaries, bills and rent. The capital account is used to fund expenditure that creates an asset, such as building a school, road or care home. Capital income and expenditure are presented in Chapter 2.

Figures are presented in cash terms throughout the publication, i.e. they have not been adjusted for inflation. Where income is presented alongside expenditure, a convention of presenting income in (brackets) and expenditure without brackets is used.

Table 1.1 summarises revenue income, expenditure, funding and reserves for 2017-18.

Total Gross Revenue Expenditure on services by Scottish local authorities in 2017-18 was £15,870 million, 1.8% higher than in 2016-17. Of this, £686 million was for the provision of housing through the Housing Revenue Account (HRA).

Total service income raised by local authorities in 2017-18 was £5,780 million, an increase of 3.6% on the previous year. Of this, £1,197 million was raised through the HRA.

Net Revenue Expenditure is the element of expenditure on services to be funded by taxation and non-specific grant income (General Revenue Funding, Council Tax and Non-Domestic Rates), with any remaining expenditure to be met from reserves. Net revenue expenditure is calculated as gross service expenditure minus service income. This is sometimes referred to as the Net Cost of Service. Total Net Revenue Expenditure in 2017-18 was £10,090 million, which is an increase of 0.8% on 2016-17.

The largest service area is education with gross expenditure of £5,224 million (an increase of 3.0% on the previous year) and service income of £380 million (an increase of 58.2%) in 2017-18, which gives a net revenue expenditure on education of £4,844 million, an increase of 0.3% compared with 2016-17. The sharp increase in service income is due to the expansion of the Attainment Scotland Fund (ASF), notably the introduction of Pupil Equity Funding, which is a ring-fenced revenue grant. The ASF underspent in 2017-18 which had a negative impact on net expenditure. As a result the net expenditure growth rate is lower than the gross expenditure growth rate.

The second largest service area is social work with gross expenditure of £4,329 million and £1,202 million of service income. Net Revenue Expenditure on social work is £3,127 million, 0.3% lower than in 2016-17.

Education and Social work account for three quarters of General Fund net revenue expenditure on services, with Education accounting for 46% and Social Work accounting for 29% of General Fund net revenue expenditure.

Total Other Income and Expenditure for 2017-18 was £1,702 million, an increase of 0.4% on the previous year. Of this, £828 million was spent on interest charges and £656 million was used to repay debt. Authorities used £296 million of revenue resources to fund capital expenditure. Interest received, surplus or deficit from trading operations and other operating expenditure totalled income of £78 million.

Total General Funding available to authorities in 2017-18 was £11,753 million, 0.4% higher than in 2016-17. Of this, £6,799 million was General Revenue Funding, £2,666 million was Non-Domestic Rates Distributable Amount and £2,278 million was from Council Tax, with £10 million of other funding.

The surplus or deficit on the provision of services is calculated by taking the net cost of service, adding Other Income and Expenditure, then deducting General Funding, which gives a revenue deficit of £39 million in 2017-18. This comprises a £35 million deficit in the General Fund and a £4 million deficit in the Housing Revenue Account.

This deficit must be met from local authority reserves. At the 1st of April 2017, Local Authorities held £1,664 million of General Fund and HRA reserves. They transferred £18 million into General Fund and HRA reserves from other accounts within the authority, which meant that reserves decreased by £21 million to give a closing balance at the 31st March 2018 of £1,642 million. Unrounded figures are available in Table 1.1.

(Surplus)/Deficit on Provision of Services, General Fund and HRA Revenue Reserves

Table 1.1 – Revenue Expenditure, Income and Reserves, 2017-18

£thousands

General Fund

Housing Revenue Account

Total

INCOME AND EXPENDITURE ON SERVICES

Gross Expenditure

15,184,242

686,235

15,870,477

Gross Income

(4,582,971)

(1,197,371)

(5,780,342)

Net Cost of Service

10,601,271

(511,136)

10,090,135

OTHER INCOME AND EXPENDITURE

Interest Payable and Similar Charges

686,212

141,539

827,751

Interest Receivable and Similar Income

(71,973)

(2,418)

(74,391)

Statutory Repayment of Debt

524,324

131,834

656,158

Capital Expenditure Funded from Revenue

51,890

244,128

296,018

(Surplus) or Deficit from Trading Operations

(10,164)

(281)

(10,445)

Other Operating Expenditure

6,295

562

6,857

Other Income and Expenditure

1,186,584

515,364

1,701,948

Funding Requirement

11,787,855

4,228

11,792,083

GENERAL FUNDING

General Revenue Funding

(6,798,956)

0

(6,798,956)

Non-Domestic Rates

(2,665,800)

0

(2,665,800)

Council Tax

(2,278,037)

0

(2,278,037)

Other

(10,340)

0

(10,340)

Total Funding

(11,753,133)

0

(11,753,133)

(Surplus) / Deficit to be met from reserves

34,722

4,228

38,950

RESERVES

Balance at 1 April 2017

(1,494,107)

(169,438)

(1,663,545)

(Surplus) or Deficit for the year

34,722

4,228

38,950

Movement in Reserves

(5,650)

(12,230)

(17,880)

(Increase) or decrease in reserves

29,072

(8,002)

21,070

Balance 31 March 2018

(1,465,035)

(177,440)

(1,642,475)

Source: Local Financial Returns – LFR A0

1.2 General Fund Revenue Expenditure and Income

Chart 1.1 provides a breakdown of General Fund net revenue expenditure by service. The HRA has been excluded from this analysis as it is a separate, self-financing account. Education and social work account for three quarters of General Fund net revenue expenditure. The largest is Education with 46% (£4,844 million) of General Fund net revenue expenditure. Of this, £1,905 million was spent on primary education and £1,869 million on secondary education with the remainder spent on pre-primary, special and community education.

Social work is the next largest service with net revenue expenditure of £3,127 million (29% of General Fund net expenditure). Data on social work expenditure is collected on the basis of client groups. Of the client groups identified in the Local Financial Returns (LFRs), older persons has the highest expenditure with £1,331 million followed by children and families with £917 million and adults with learning disabilities with £522 million.

A full breakdown of expenditure by sub-service is available in the accompanying excel tables.

Chart 1.1: General Fund Net Revenue Expenditure on Services: 2017-18

Chart 1.1: General Fund Net Revenue Expenditure on Services: 2017-18

Table 1.2 provides a time series of net revenue expenditure by service. Education is the only service area that has shown increases in expenditure each year since 2013-14, increasing by 6% from £4,579 million in 2013-14 to £4,844 million in 2017-18. Over the period from 2013-14 to 2017-18, net revenue expenditure on Social Work increased by 3% from £3,031 million in 2013-14 to £3,127 million in 2017-18. Planning & Development Services showed the largest percentage fall (-24%) from £279 million in 2013-14 to £213 million in 2017-18.

Table 1.2 – Net Revenue Expenditure by Service, 2013-14 to 2017-18

£millions

2013-14

2014-15

2015-16

2016-17

2017-18

Education

4,579

4,612

4,736

4,830

4,844

Cultural & Related Services

614

643

598

577

561

Social Work

3,031

3,110

3,169

3,136

3,127

Roads & Transport

436

420

418

399

432

Environmental Services

659

666

684

679

688

Planning & Development Services

279

278

243

234

213

Central Services

484

439

465

390

448

Non-HRA Housing

321

342

294

292

319

Trading Services

(2)

(5)

(17)

(27)

(30)

General Fund Net Expenditure

10,400

10,504

10,590

10,511

10,601

Housing Revenue Account

(439)

(465)

(490)

(499)

(511)

General Fund + HRA Net Revenue Expenditure

9,961

10,039

10,101

10,012

10,090

Source: Local Financial Returns – LFR 00

Type of Expenditure

The element with the highest gross revenue expenditure is operating costs (which includes property costs, supplies and services costs, transport and payments to agencies and other bodies) which account for £7,088 million of expenditure. The second largest element was employee costs which account for £6,866 million.

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 under Non-HRA Housing, which will include the payment of Housing Benefits, and make up around £1,706 million of the total £2,178 million of transfer payments.

An adjustment for Inter-Account and Inter-Authority Transfers is made to the gross expenditure to eliminate transfers between different services within an authority and between local authorities. This prevents double counting expenditure when aggregating the individual returns.

Support services include Finance, Legal, Human Resources, IT, Internal Audit, Procurement and Asset Management.

Local authorities can receive service income from a variety of sources.

The largest element of service income is Customer and Client Receipts, with £2,520 million of income. Of this, £1,187 million is from the Housing Revenue Account, the vast majority of which will be rent income.

The second largest element of service income is Government Grants (excl General Revenue Funding) with £2,225 million, however £1,746 million of this is under Non-HRA Housing, which will include the grant from the DWP to be used by authorities to pay out Housing Benefits.

Table 1.3 Net Revenue Expenditure by Service and Type of Income / Expenditure, 2017-18

£thousands

Education

Culture and Related Services

Social Work

Roads and Transport

Environmental Services

Housing (non-HRA)

Central and Other

Total General Fund

Housing Revenue Account

Total General Fund plus HRA

EXPENDITURE

Employee Costs

3,644,050

213,183

1,380,739

207,548

327,462

117,668

828,513

6,719,163

146,405

6,865,568

Operating Costs

1,425,908

446,409

2,606,479

559,487

502,781

341,222

711,538

6,593,824

494,641

7,088,465

Transfer Payments

30,207

19,523

226,034

(6,060)

2,377

1,859,712

42,710

2,174,503

3,515

2,178,018

Support Services

197,049

35,574

150,601

37,406

51,801

22,602

184,608

679,641

63,518

743,159

Adjustment for Inter Account and Inter Authority Transfers

(73,044)

(40,308)

(34,590)

(155,186)

(65,945)

(42,305)

(571,511)

(982,889)

(21,844)

(1,004,733)

Gross Expenditure

5,224,170

674,381

4,329,263

643,195

818,476

2,298,899

1,195,858

15,184,242

686,235

15,870,477

INCOME

Government Grants (excl GRG)

(205,480)

(5,461)

(123,898)

(10,664)

(6,742)

(1,797,038)

(71,831)

(2,221,114)

(4,171)

(2,225,285)

Other Grants, Reimbursements and Contributions

(49,121)

(17,122)

(805,853)

(30,198)

(6,132)

(35,397)

(84,946)

(1,028,769)

(6,086)

(1,034,855)

Customer and Client Receipts

(125,302)

(90,980)

(272,355)

(170,851)

(117,169)

(147,559)

(408,602)

(1,332,818)

(1,187,114)

(2,519,932)

Other Income

0

(28)

0

30

0

(218)

(54)

(270)

0

(270)

Total Income

(379,903)

(113,591)

(1,202,106)

(211,683)

(130,043)

(1,980,212)

(565,433)

(4,582,971)

(1,197,371)

(5,780,342)

Net Revenue Expenditure

4,844,267

560,790

3,127,157

431,512

688,433

318,687

630,425

10,601,271

(511,136)

10,090,135

Chart 1.2: Gross Expenditure by Service, 2017-18, £millions

Chart 1.2: Gross Expenditure by Service, 2017-18, £millions

Source: Local Financial Returns – LFR 00

Chart 1.3 shows net revenue expenditure on General Fund services per head of population by council. Valuation Joint Boards, Tay Road Bridge and Regional Transport Partnerships have been excluded from the figure here. The chart shows that on average in Scotland council’s spent £1,964 per person in 2017-18, up slightly from £1,958 in 2016-17. Spend per head ranged from £1,585 per person in Edinburgh to £4,095 per person in Shetland.

Chart 1.3 – General Fund Net Revenue Expenditure per Head Population by Council, 2017-18 (£)

Chart 1.3 – General Fund Net Revenue Expenditure per Head Population by Council, 2017-18 (£)

Source: Local Financial Returns – LFR 00 and NRS Mid-Year Population Estimates

1.3 Revenue Income and Funding

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 (Customer and Client Receipts).

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 to support the delivery of local services.

Local taxation contributed £4.9 billion to the funding of local government in 2017-18 and further information on these taxes is set out in the following sections. General Revenue Funding and local taxation combined together are sometimes referred to as “Taxation and non-specific grant income”. 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, 2013-14 to 2017-18

£millions

2013-14

2014-15

2015-16

2016-17

2017-18

General Funding:

11,724

11,923

12,003

11,708

11,753

General Revenue Funding

7,225

7,167

7,147

6,839

6,799

Non-Domestic Rates Distributable Amount

2,436

2,656

2,791

2,769

2,666

Council Tax

1,978

2,022

2,055

2,091

2,278

Other Funding

85

78

10

10

10

Service Income:

5,066

5,185

5,230

5,578

5,780

Government Grants (excl GRG)

1,974

1,984

2,040

2,138

2,225

Other Grants, Reimbursements and Contributions

774

833

768

902

1,035

Customer and Client Receipts

2,317

2,368

2,423

2,537

2,520

Total Revenue Income

16,790

17,108

17,233

17,286

17,533

Source: Local Financial Returns – LFR 00


Chart 1.4 – Revenue Income and Funding, 2017-18

Chart 1.4 – Revenue Income and Funding, 2017-18

Source: Local Financial Returns (LFRs): LFR A0 and 00

1.4 Council Tax

In 2017-18, Council Tax bills were issued to 2.49 million dwellings in Scotland. Over £2.278 billion of Council Tax revenue was raised across all local authorities in Scotland in 2017-18.

Council Tax was introduced in Scotland on the 1st April 1993 to replace the Community Charge. It is a tax system based on dwellings and is used as a source of funding in addition to that received from other sources (General Revenue Grant, Non-Domestic Rates, ring-fenced revenue grants and other locally raised income from rent, fees and charges).

There are three factors that determine the amount of Council Tax that a dwelling is liable for. These are:

1. The market value of the dwelling as at the 1st April 1991. Each dwelling is placed into one of eight bands from A to H, with Band A dwellings liable for the lowest rates of Council Tax and Band H attracting the highest.

2. The Band D rate which is set by the local authority, with other bands calculated as a ratio to Band D. The ratios determining the charges for properties in bands E-H changed for the 2017-18 Council Tax year.

3. A range of exemptions, discounts and reductions that are available in certain circumstances, or in some cases an increase in Council Tax due to the application of a levy.

The valuation range and ratio for each band is given in Table 1.5.

Table 1.5 – Council Tax valuation range and ratios by band

Valuation band ranges
as at 1st April 1991

Ratio to
Band D
(to 2017-18)

No. of chargeable
dwellings as at
September 2018

Proportion of
chargeable
dwellings

Band A

Under £27,000

6/9

503,209

20%

Band B

£27,001 to £35,000

7/9

572,175

23%

Band C

£35,001 to £45,000

8/9

401,847

16%

Band D

£45,001 to £58,000

9/9

336,392

14%

Band E

£58,001 to £80,000

473/360

337,232

14%

Band F

£80,001 to £106,000

585/360

196,377

8%

Band G

£106,001 to £212,000

705/360

126,529

5%

Band H

Over £212,000

882/360

13,340

1%

Total

2,487,101

100%

Source: CTAXBASE 2018 Return

Collection and Potential Yield of Council Tax

Local authorities are responsible for billing and collecting Council Tax. Before the start of each financial year, local authorities issue Council Tax bills to householders in each dwelling. Each bill is calculated by applying the appropriate band rate for the local authority, then applying any discounts, exemptions, reductions or increases: further details are provided in Tables 1.10 and 1.11. Chart 1.5 illustrates the breakdown of the gross Council Tax potential yield into Council Tax billed and the amounts not billed due to Council Tax Reduction (CTR), discounts and exemptions.

Chart 1.5 – Council Tax Potential Yield (£ millions), 2017-18

Chart 1.5 – Council Tax Potential Yield (£ millions), 2017-18

Source: CTAXBASE 2017 Return and CTRR 2017-18 Q4 Returns

Local authorities collect Council Tax relating to these bills over the year, and also continue to collect late amounts from previous billing years. The provisional in-year Council Tax collection rate for 2017-18 was 96.0 per cent and the total amount collected for Scotland as a whole (after CTR) was £2.278 billion, including late amounts for previous years. Table 1.6 shows the amount of Council Tax collected by each local authority in 2017-18. More information about bills issued in 2017-18 and the provisional amounts collected are available in the statistics publication ‘Council Tax Collection Statistics, 2017-18’ which is available at:

https://www.gov.scot/publications/council-tax-collection-statistics-2017-18-9781788519847/

Table 1.6 – Council Tax income after CTR by local authority, 2017-18a

Local Authority

Net Council Tax
income (£'000s)

Aberdeen City

110,472

Aberdeenshire

134,199

Angus

46,596

Argyll and Bute

48,080

Clackmannanshire

20,702

Dumfries and Galloway

61,454

Dundee City

50,538

East Ayrshire

45,992

East Dunbartonshire

58,042

East Lothian

49,406

East Renfrewshire

48,072

Edinburgh, City of

249,248

Eilean Siar

10,145

Falkirk

61,682

Fife

149,839

Glasgow City

208,966

Highland

115,476

Inverclyde

29,726

Midlothian

40,698

Moray

39,130

North Ayrshire

51,646

North Lanarkshire

108,198

Orkney Islands

8,573

Perth and Kinross

76,171

Renfrewshire

73,238

Scottish Borders

52,712

Shetland Islands

9,042

South Ayrshire

52,039

South Lanarkshire

123,719

Stirling

46,049

West Dunbartonshire

32,607

West Lothian

65,580

Scotland

2,278,037

a Figures relate to income collected in financial year 2017-18, which can include amounts that were billed in previous years.

Source: Local Financial Returns, 2017-18

Chargeable Dwellings

Table 1.7 shows the number of dwellings in Scotland for each September from 2013 to 2018. There were a total of 2.615 million dwellings in Scotland in 2018, of which 127,900 dwellings were exempt for Council Tax purposes. This gave 2.487 million chargeable dwellings in 2018: an increase of around 3.0 per cent (77,800 dwellings) since 2013.

Table 1.7 – Total number of dwellings in Scotland, 2013 to 2018

Total
Dwellings

Exempt
Dwellings

Chargeable
Dwellings

2013

2,526,703

116,372

2,410,331

2014

2,540,330

112,525

2,427,805

2015

2,557,365

116,847

2,440,518

2016

2,575,495

120,089

2,455,406

2017

2,594,821

121,324

2,473,497

2018

2,614,957

127,856

2,487,101

Source: CTAXBASE Returns

Chart 1.6 shows the distribution of chargeable dwellings across Council Tax bands in each local authority. Across the whole of Scotland, just under three-quarters of all chargeable dwellings are in Bands A to D. The distribution varies across local authorities due to variations in property market values. Comhairle nan Eilean Siar has the largest proportion of dwellings in Bands A to D (90 per cent), whereas East Renfrewshire has the lowest proportion in Bands A to D (44 per cent). Dwellings in Band E to H, just over a quarter of the total, are subject to revised ratios, and therefore higher charges, from 2017-18.

The three local authorities with the highest number of chargeable dwellings were Glasgow, Edinburgh and Fife, with over a quarter of the chargeable dwellings in Scotland between them. Further data on the number of chargeable dwellings by local authority and Council Tax band can be found in the supplementary tables at the link below.

http://www.gov.scot/Topics/Statistics/Browse/Local-Government-Finance/DatasetsCouncilTax

Chart 1.6 - Percentage of chargeable dwellings by Council Tax band for each local authority as at September 2018

Chart 1.6 - Percentage of chargeable dwellings by Council Tax band for each local authority as at September 2018

Source: CTAXBASE 2018 Return

Council Tax Rates & Average Bills

Each local authority determines their own Band D rate of Council Tax as part of their budget setting process. The rate for other bands is then calculated as a set ratio of the Band D rate: the ratios used from 2017-18 can be found in Table 1.5. As a result, each local authority has different Council Tax rates. The Band D Council Tax levels for each local authority are shown in Chart 1.7, and range from £1,055 in Comhairle nan Eilean Siar to £1,249 in Glasgow City.

Chart 1.7 – Band D Council Tax rate by local authority, 2017-18 (£)

Chart 1.7 – Band D Council Tax rate by local authority, 2017-18 (£)

Source: CTAS 2017 Return

From 2007-08 to 2016-17, the Scottish Government and local government worked in partnership to freeze Council Tax rates each year. The one exception is Stirling, where the council reduced the Band D rate from £1,223 in 2007-08 to £1,209 in 2008-09, and subsequently to £1,197 in 2012-13. The Council Tax freeze caused the Scotland average Band D Council Tax rate to remain steady at £1,149 from 2007-08 to 2016-17 – a fall in real terms.

In 2017-18, the Council Tax freeze ended and the Local Government Finance settlement included an agreement between the Scottish Government and local government for locally determined Council Tax increases to be capped at 3 per cent.

In 2017-18, eight local authorities did not increase their Band D council tax rate, one increased it by 2 per cent, two by 2.5 percent and the remaining 21 local authorities increased their Band D rate by 3 per cent.

Table 1.8 shows how the average Band D Council Tax bill for Scotland has changed each year from 2012-13. The average Council Tax bill per dwelling in 2017-18 was £1,069. This differs from the average Band D rate due to the distribution of dwellings across Council Tax bands, as can be seen in Table 1.5 and Chart 1.5, and the application of discounts.

Table 1.8 – Average Council Tax bills, 2012-13 to 2017-18

Average1 CT bill per dwelling

Before
CTB/CTR

After
CTB/CTR

2012-13

£985

£830

2013-14

£988

£838

2014-15

£989

£846

2015-16

£991

£856

2016-17

£997

£867

2017-18

£1,069

£936

Source: CTAS, CTAXBASE Returns and Local Financial Returns (LFR12)

Council Tax Reduction (CTR)

Scotland’s CTR scheme was introduced in 2013 following the UK Government’s abolition of Council Tax Benefit (CTB) and localisation of Council Tax support. The CTR scheme reduces the Council Tax liability of vulnerable people in Scotland, including people on low incomes, pensioners and lone parents. The impact of CTB/CTR on the average Council Tax bill is also shown in Table 1.8. After taking these reductions in liability into account, the average bill per dwelling for 2017-18 reduced by £133 from £1,069 to £936.

Scotland’s CTR scheme is funded by the Scottish Government. In 2017-18, CTR funding totalled £351 million. This included additional funding for the 25 per cent increase in the child premium within the CTR scheme introduced in April 2017, and the extension of the CTR scheme to provide relief for low to middle income households from the impact of the council tax reforms on properties in Bands E - H.

The amounts distributed to each local authority and the final total costs are shown in Table 1.9. The total cost of the CTR scheme across Scotland in 2017-18 was around £327 million. This figure is £23.7 million less than the £351 million funding provided by the UK Government and Scottish Government.

Table 1.9 – CTR funding and final liability for local authorities, 2017-18

Local Authority

SG
Funding (£'000s)

Final total reduction
in liability (£'000s)

Aberdeen City

10,304

9,592

Aberdeenshire

8,577

7,621

Angus

5,612

5,283

Argyll and Bute

5,592

5,238

Clackmannanshire

3,626

3,400

Dumfries and Galloway

8,953

8,422

Dundee City

12,770

11,947

East Ayrshire

9,455

8,733

East Dunbartonshire

4,619

4,323

East Lothian

5,238

4,942

East Renfrewshire

3,902

3,654

Edinburgh, City of

26,672

24,718

Eilean Siar

1,462

1,316

Falkirk

8,491

7,838

Fife

21,352

20,220

Glasgow City

70,692

65,910

Highland

12,916

11,982

Inverclyde

6,605

6,238

Midlothian

5,234

4,759

Moray

3,975

3,739

North Ayrshire

12,059

11,342

North Lanarkshire

23,725

22,238

Orkney Islands

786

739

Perth and Kinross

6,701

6,188

Renfrewshire

13,051

12,187

Scottish Borders

5,584

5,086

Shetland Islands

674

625

South Ayrshire

8,677

8,144

South Lanarkshire

20,370

19,288

Stirling

4,282

4,005

West Dunbartonshire

9,040

8,428

West Lothian

10,004

9,164

Scotland

351,000

327,309

Source: Local Financial Returns (LFR23), CTR Extract

Changes to Council Tax Liabilities

Not all dwellings are liable to pay the full rate of Council Tax; discounts, exemptions and increased rates can be charged for certain types of dwellings, and the CTR scheme is available to support vulnerable people in meeting their Council Tax liabilities. Table 1.10 summarises the range of discounts, exemptions and reductions available and the change in liability that applies to each type. Please note that, in some cases, more than one type of discount, exemption or reduction may apply. The examples given in Table 1.10 are typical but not exhaustive. For a full explanation of Council Tax discounts and exemptions, go to: https://www.gov.scot/policies/local-government/council-tax/

Table 1.10 – Council Tax discounts, exemptions, reductions and increases

Type of Support
Discounts

Typical dwellings that are eligible

Reduction in liability

Single Person
Discount

Chargeable dwellings in which there is only one resident or only one resident is not disregarded

25% discount

Second Homes

Chargeable dwellings which are no one's sole or main residence, but are furnished and lived in for at least 25 days during any 12 month period.

10 - 50% discount or discount removed1

Long Term Empty
(6 - 12 months)

Empty properties not meeting the criteria of a second home.

10 - 50% discount

Long Term Empty
(> 12 months)

Empty properties not meeting the criteria of a second home.

Up to 50% discount or an increase of up to 100% 1

Occupied entirely by disregarded adults

Chargeable dwellings occupied entirely by residents who are disregarded for a discount.

50% discount

Exemptions

Occupied

Dwellings occupied solely by any combination of students, those with a severe mental impairment, school leavers or persons under the age of 18.

100% reduction

Unoccupied

Dwellings which are; empty and unfurnished for less then 6 months or empty and under repair for less than 12 months. Dwellings which are empty because their former residents have moved out for the purposes of receiving personal care by reason of old age, disablement or illness.

100% reduction

Reductions

Disability reduction

Homes that have been adapted for a disabled person.

One CT Band or 5/9 of the Band D charge reduction2

Council Tax Reduction
(Passported)

In receipt of Pension Credit (Guarantee), JSA (income based), ESA(income related) or Income Support.

100% reduction

Council Tax Reduction
(Not passported)

Low income household.

Up to 100% reduction3

1 The actual change in liability depends on local authority policy. In 2013-14, local authorities gained the discretionary power to remove the empty properties discount or set a council tax increase of 100 per cent on properties which have been empty for more than 12 months.

2 For example, a Band D rate property that was eligible for the disability reduction would be charged the Band C rate.

3 The exact change in liability is dependent on a means-test.

Table 1.11 shows the number of dwellings eligible for Council Tax discounts and reductions. Of the 2.49 million chargeable dwellings in Scotland, around 1 million were eligible for a discount in 2018. The most common type of discount was the Single Person Discount, with around two-fifths of chargeable dwellings entitled to the discount in 2018. The CTR scheme supports almost half a million dwellings, or around one-fifth of chargeable dwellings, in meeting their Council Tax liability.

Around 64,000 dwellings are classified as second homes or long term empty properties: further statistics on these are available at: https://www.gov.scot/publications/housing-statistics-quarterly-update-december-2018/.

Table 1.11 – Number of dwellings1 in receipt of Council Tax discounts and reductions as at September

Type of Support

2013

2014

2015

2016

2017

2018

All chargeable
dwellings

2,410,331

2,427,805

2,440,518

2,455,406

2,473,497

2,487,101

Disability reduction

13,791

13,736

13,505

13,463

13,705

13,903

Single Person
Discount

952,251

953,612

955,505

963,297

972,537

978,504

Second Homes 2

35,734

27,879

27,317

26,140

22,101

24,907

Long Term Empty
(empty > 6 months)

27,327

31,884

36,419

36,236

37,135

39,110

Occupied entirely by
disregarded adults

1,579

2,802

1,378

1,411

1,352

1,374

Dwellings not
subject to discount

1,393,440

1,411,628

1,419,899

1,428,322

1,440,372

1,443,206

Council Tax
Reduction/Benefit3

548,070

533,980

512,340

495,660

489,560

481,100

1 Some dwellings may be eligible for more than one type of support, in these cases the dwelling will be counted under each type of support it is eligible for.

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.

3 Council Tax Benefit figures from 2010 to 2012 were published by DWP and are available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/229795/hbctb_release_may13_revised.xls

Source: CTAXBASE Returns, CTR Extract and DWP CTB figures

1.5 Non-Domestic Rates

Non-Domestic Rates (NDR) is a property tax paid by the owner/occupier or tenant of a non-domestic property.

In 2017-18, the income raised from NDR was £2.76 billion.

The principles of non-domestic rates were established in the Lands Valuation (Scotland) Act 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. Examples include business premises and third and public sector properties.

The value given to a property for NDR purposes is called its rateable value (RV). RV is based on a legally defined valuation and broadly corresponds to the notional rental value the property could achieve in the open market if it were vacant and to let, taking account of the type and nature of the property. As such it is not necessarily a reflection of the profitability, turnover or output of the ratepayer. RVs are generally initially established when a non-domestic property comes into existence. Non-domestic properties and their corresponding RVs are listed on the Valuation Roll, which is maintained by the Scottish Assessors. RVs are periodically updated at non-domestic rate revaluations. Scottish Assessors undertook the last revaluation in 2017, assigning updated rateable values to all non-domestic properties in Scotland.[1] Revaluations typically have taken place on a 5-year cycle[2] NDR bills are calculated using the RV of the property, multiplied by a poundage set nationally by Scottish Ministers, less any relief or exemption entitlement.

NDR bills calculation

In 2017-18, for properties with an RV greater than £51,000, the Large Business Supplement (LBS) applied in addition to the poundage (the poundage is effectively increased by adding the LBS).

In England revenue-neutral revaluations are a statutory requirement, with the poundage generally decreasing in line with average RV increases (or vice versa). This is not the case in Scotland, with the 2017 revaluation and poundage actually leading to a decrease in anticipated revenue over the following cycle.

Table 1.12 shows the composition of properties (and associated RV) on the Valuation Roll by property type. As at 1st April 2017[3], there were 233,386 properties with a total RV of £7.4 billion. Shops were the most prevalent type of property on the Valuation Roll, making up nearly a quarter (23%) of the number of properties and RV on the roll. Industrial subjects and offices are the next two largest categories in terms of numbers and RV. Together, these three categories account for 63% of properties on the valuation roll, and 54% of the RV.

Table 1.12 – Non-Domestic Rates Properties by Classification (as at 1 April 2017)

Number of properties

Rateable value (£)

% of Properties on Valuation Roll

% of RV on Valuation Roll

CATEGORY

1st April 2017

1st April 2017

1st April 2017

1st April 2017

Advertising

1,924

10,538,430

1%

0%

Care Facilities

2,975

118,542,034

1%

2%

Communications

349

24,645,995

0%

0%

Cultural

1,419

53,810,920

1%

1%

Education and Training

3,705

559,765,675

2%

8%

Garages and Petrol Stations

4,245

74,937,080

2%

1%

Health and Medical

3,233

228,000,365

1%

3%

Hotels

5,469

275,073,193

2%

4%

Industrial Subjects

49,050

1,256,125,440

21%

17%

Leisure, Entertainment, Caravans etc.

22,299

281,406,378

10%

4%

Offices

44,061

1,082,525,979

19%

15%

Other

16,156

141,617,533

7%

2%

Petrochemical

142

122,224,305

0%

2%

Public Houses

3,732

132,642,075

2%

2%

Public Service Subjects

10,082

356,549,995

4%

5%

Quarries, Mines, etc.

660

17,990,509

0%

0%

Religious

6,101

56,293,665

3%

1%

Shops

53,709

1,611,664,302

23%

22%

Sporting Subjects

3,010

18,120,492

1%

0%

Statutory Undertaking

1,065

935,200,808

0%

13%

TOTAL All NON-DOMESTIC PROPERTIES

233,386

7,357,675,173

100%

100%

Source: Scottish Assessors Valuation Roll, 1st April 2017

Table 1.13 provides a breakdown of properties on the Valuation Roll by local authority and RV band.

In terms of the Small Business Bonus Scheme (SBBS) and the application of the Large Business Supplement (LBS), £18,000 and £51,000 currently (2017/18) represent the rateable value thresholds for small and large businesses respectively.

Around 78% of all properties (180,886 properties) have a rateable value less than or equal to £18,000, and around 9% of properties have a rateable value of more than £51,000.

Table 1.13 – Non-Domestic Rates Subjects by Local Authority (as at 1 April 2017)1

Local Authority

Rateable Value Band

Total Non-Domestic Properties

<= £18,000

£18,001 to £51,000

> £51,000

Scotland

180,886

30,498

22,002

233,386

Aberdeen City

5,435

1,962

2,146

9,543

Aberdeenshire

9,488

1,430

966

11,884

Angus

4,135

475

274

4,884

Argyll & Bute

7,686

564

266

8,516

Clackmannanshire

1,234

206

113

1,553

Dumfries & Galloway

8,310

698

388

9,396

Dundee City

4,280

881

692

5,853

East Ayrshire

3,229

447

277

3,953

East Dunbartonshire

1,813

377

198

2,388

East Lothian

2,836

394

253

3,483

East Renfrewshire

1,314

301

136

1,751

Edinburgh, City of

15,876

3,863

3,116

22,855

Eilean Siar

2,221

159

90

2,470

Falkirk

3,765

737

496

4,998

Fife

10,811

1,801

1,032

13,644

Glasgow City

19,143

4,507

3,596

27,246

Highland

15,242

1,528

1,091

17,861

Inverclyde

1,880

275

190

2,345

Midlothian

2,323

394

306

3,023

Moray

3,853

435

321

4,609

North Ayrshire

4,124

586

353

5,063

North Lanarkshire

7,426

1,542

1,045

10,013

Orkney Islands

1,919

185

71

2,175

Perth & Kinross

7,275

807

539

8,621

Renfrewshire

4,889

900

714

6,503

Scottish Borders

6,244

630

317

7,191

Shetland Islands

1,768

178

110

2,056

South Ayrshire

3,844

611

386

4,841

South Lanarkshire

7,358

1,557

1,046

9,961

Stirling

4,195

687

420

5,302

West Dunbartonshire

2,290

369

267

2,926

West Lothian

4,680

1,012

787

6,479

1. Includes properties with a zero rateable value.

Source: Scottish Assessors Valuation Roll, 1st April 2017

Table 1.14 shows a time series of annual NDR Income, total rateable value and poundage rate. As a consequence of the 2017 revaluation, the poundage was reduced from 48.4p in 2016-17 to 46.6p in 2017-18 and the total RV of non-domestic properties (the tax base) increased from £6.8 billion in 2016-17 to £7.4 billion in 2017-18.

Table 1.14 – Non-Domestic Rates Income, Total Rateable Values and Poundage Rate

2009-10

2010-111

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-181

Non Domestic Rates Income (£m)2

2,010

2,138

2,251

2,347

2,367

2,511

2,579

2,731

2,762

Total Rateable Value (£m)3

5,299

6,612

6,678

6,718

6,716

6,681

6,719

6,796

7,358

Poundage Rate (pence)

48.1

40.7

42.6

45.0

46.2

47.1

48.0

48.4

46.6

Large Business Supplement (pence) 4

0.4

0.7

0.7

0.8

0.9

1.1

1.3

2.6

2.6

1. Revaluations occurred in 2010 and 2017.

2. All income figures, including 2017-18, are the final audited income collected by councils, and paid to SG. These figures are net of reliefs awarded by the SG, but gross of any local reliefs, or top-ups to discretionary reliefs that the councils award themselves.

3. As at start of financial year

4. The Large Business Supplement is applied in addition to the poundage for properties with a rateable value over £51,000

Source: NDR Income – Non-domestic Rate Income Returns, Rateable Value – Scottish Assessors Valuation Roll as at 1st April

Table 1.14 also shows that between the 2010 and 2017 revaluations the total RV had increased slightly from £6.6 billion in 2010-11 to £6.8 billion in 2016-17. This was 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[4]. As non-domestic rates bills in Scotland are directly related to the rateable values of individual non-domestic properties, changes in the totalRV impact on the amount of NDR available for collection, along with other factors such as the poundage rate and backdated revaluation appeals losses which also affect the final income.

Inflation is a key driver of growth in NDR income as the poundage rate, set nationally by Scottish Ministers[5], has previously typically been tied to the Retail Price Index[6] (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 (those with a RV greater than £51,000 in 2017-18) also pay a supplement to the poundage rate, known as the Large Business Supplement (LBS). The LBS was 2.6p in 2017-18[7]. For the period 2012-13 to 2014-15, large retailers with RV of £300,000 or more that sold both alcohol and tobacco also paid the Public Health Supplement (PHS) - an additional 13p on the poundage rate in 2014-15. These supplements increase the amount paid in NDR bills. Conversely, exempt properties (which do not pay rates), and relief schemes such as the Small Business Bonus Scheme can significantly reduce the amount paid in NDR bills, and therefore the NDR income.

Table 1.15 summarises the total number of properties and rateable value as at 1st April 2017 and the NDR income collected in 2017-18 by local authority. This is net of reliefs, apart from those for which the cost is met by local authorities. Consequently, amounts reported are slightly greater than those actually paid.

Some councils have responsibility for collection of NDR for specific utilities. For these councils, the entries on the valuation roll and NDR income include Scotland-wide data for the specified utilities sectors.

There are a number of types of NDR relief that reduce the NDR bill for qualifying properties. Table 1.16 shows the main types of relief available[8] and the amount of relief provided each year from 2010-11 to 2017-18. Local reliefs and the elements of discretionary reliefs funded by local authorities are not included.

The gross amount of relief provided has increased substantially from £501 million in 2010-11 to £684 million in 2017-18. Key reasons for change in total relief costs include changes to the poundage, changes to the tax base (recent growth in overall RV and increase in overall RV at revaluation), changes in relief entitlement, increased awareness of a relief scheme, or introduction of new reliefs. For example the Small Business Bonus Scheme (SBBS) has been expanded in recent years and a greater awareness of the scheme will have contributed to the rise in cost of SBBS. Following the 2017 revaluation a transitional relief scheme was introduced for pubs, hotels and restaurants with rateable value below £1.5 million, and for offices in Aberdeen and Aberdeenshire. Table 1.16a shows the amount of relief paid in each local authority area in 2017-18.

Table 1.15 – Non-Domestic Rates Properties, Rateable Values and Income By Local Authority1

Authority

Non-Domestic
Properties 2
Apr-17

Non-Domestic
Rateable Values
Apr-17
(£000s)

Non-Domestic
Rate Income
2017-18 3
(£000s)

Scotland

233,386

7,357,675

2,762,249

Aberdeen City

9,543

593,767

242,635

Aberdeenshire

11,884

286,633

113,584

Angus

4,884

80,431

25,141

Argyll & Bute

8,516

109,931

36,101

Clackmannanshire

1,553

42,498

16,070

Dumfries & Galloway

9,396

123,270

46,058

Dundee City

5,853

186,886

66,203

East Ayrshire

3,953

80,366

26,617

East Dunbartonshire

2,388

68,991

22,973

East Lothian

3,483

74,989

24,042

East Renfrewshire

1,751

43,253

14,505

Edinburgh, City of

22,855

945,618

349,501

Eilean Siar

2,470

26,491

7,516

Falkirk

4,998

184,691

72,134

Fife

13,644

427,587

160,833

Glasgow City

27,246

1,016,782

359,289

Highland

17,861

359,803

130,418

Inverclyde

2,345

57,341

19,165

Midlothian

3,023

84,100

32,641

Moray

4,609

108,444

43,680

North Ayrshire

5,063

115,161

38,618

North Lanarkshire

10,013

291,967

107,549

Orkney Islands

2,175

28,851

9,677

Perth & Kinross

8,621

159,642

53,195

Renfrewshire

6,503

316,839

121,166

Scottish Borders

7,191

106,773

32,361

Shetland Islands

2,056

60,817

24,881

South Ayrshire

4,841

115,179

41,498

South Lanarkshire

9,961

744,327

323,259

Stirling

5,302

122,596

41,529

West Dunbartonshire

2,926

185,733

78,573

West Lothian

6,479

207,919

80,838

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. Audited income collected by councils. This is net of reliefs paid by Scottish Government, but gross of all local reliefs, and top-ups to discretionary amounts paid by councils themselves.

Sources: Number of Properties and Rateable Value - Scottish Assessors Valuation Roll (April 2017). NDR Income - Non-domestic Rate Income Returns provided by Councils.

Table 1.16 – Amount of Non-Domestic Rates Relief Provided by Relief Type1,2

£thousands

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

Empty Property Relief

145,936

157,862

169,134

146,496

140,962

141,604

93,682

93,988

Charities

136,731

151,276

164,979

173,623

181,242

189,312

201,215

214,418

Sports Clubs

11,476

12,059

12,431

12,911

13,487

13,852

13,851

13,620

Disabled persons relief

51,901

54,372

57,580

58,299

59,648

60,599

61,498

61,511

SBBS

123,259

134,719

150,196

161,002

170,635

179,544

187,029

240,663

Religious Properties

24,016

22,960

24,573

25,205

26,113

26,625

27,014

26,303

Rural Rate Relief

4,129

4,218

4,305

4,323

4,244

4,235

4,114

3,988

Renewable Energy Relief Scheme3

3,560

4,126

4,811

7,333

9,280

9,545

647

1,279

New Start4

130

484

188

398

497

Fresh Start4

189

536

573

607

436

Transitional Relief5

26,330

Other6

4

43

10

63

221

422

730

1,104

Gross Amount

501,013

541,635

588,018

589,574

606,852

626,497

590,784

684,137

1. Estimates include mandatory and discretionary elements of relief where applicable, but exclude backdated payments of relief and excludes councils own contributions to reliefs

2. Reliefs for all years, including 2017-18, are final audited figures.

3. The Renewable Energy Relief Scheme was introduced on 1 April 2010.

4. The New Start and Fresh Start relief schemes were introduced on 1 April 2013.

5. Transitional relief was introduced for certain classes of properties following the 2017 revaluation.

6. Other includes Hardship and Enterprise Areas.

Source: Non-domestic Rate Income Returns from Councils

Table 1.16a – Amount of Non-Domestic Rates Relief Provided by Relief Type, by Local Authority, 2017-181,2 £thousands

Authority

Empty Property Relief

Charities

Sports Clubs

Disabled persons relief

SBBS

Religious Exemption

Rural Rate Relief

Transitional Relief

Other3

All reliefs

Aberdeen City

12,871

12,855

279

2,975

7,023

1,158

0

3,719

105

40,984

Aberdeenshire

1,963

2,828

990

2,533

11,737

959

1,181

927

387

23,505

Angus

985

2,096

1,424

1,276

5,173

466

65

183

34

11,701

Argyll & Bute

479

2,595

148

650

8,243

588

197

933

328

14,159

Clackmannanshire

431

942

101

433

1,784

191

4

0

0

3,886

Dumfries & Galloway

985

2,100

335

1,124

8,588

497

203

544

5

14,380

Dundee City

2,787

10,169

156

2,284

6,444

597

0

320

17

22,774

East Ayrshire

986

2,921

146

1,174

4,696

448

3

143

4

10,520

East Dunbartonshire

197

3,030

382

984

3,434

508

0

32

11

8,578

East Lothian

902

2,971

894

1,009

4,192

450

50

253

0

10,721

East Renfrewshire

282

1,477

223

941

2,257

321

0

130

61

5,692

Edinburgh, City of

15,622

40,003

1,489

7,659

24,343

3,735

0

6,407

254

99,511

Eilean Siar

104

1,045

63

430

1,869

324

111

62

142

4,149

Falkirk

2,607

3,117

191

1,605

5,231

650

4

10

15

13,430

Fife

4,678

9,836

529

3,868

14,921

1,837

35

577

179

36,459

Glasgow City

25,226

52,784

666

7,678

29,388

2,370

0

2,887

243

121,243

Highland

1,274

9,710

332

3,778

16,479

1,337

1,133

2,718

267

37,027

Inverclyde

676

2,075

326

689

2,674

328

0

30

27

6,823

Midlothian

523

3,574

292

656

3,119

335

10

99

0

8,608

Moray

357

1,658

191

1,100

4,342

487

142

244

0

8,522

North Ayrshire

2,715

2,959

305

1,783

5,519

499

59

351

85

14,274

North Lanarkshire

3,198

8,153

351

2,522

11,204

2,414

4

156

195

28,196

Orkney Islands

235

882

65

200

1,699

161

288

122

115

3,767

Perth & Kinross

737

5,424

292

2,619

9,531

741

103

1,489

238

21,172

Renfrewshire

2,745

5,642

272

2,371

6,755

610

0

954

21

19,370

Scottish Borders

1,108

2,943

583

1,243

7,762

524

103

224

24

14,514

Shetland Islands

165

1,202

818

380

1,245

105

122

298

183

4,520

South Ayrshire

1,528

2,251

296

1,512

5,577

532

53

522

180

12,452

South Lanarkshire

2,185

6,576

437

3,156

9,946

1,631

26

341

103

24,402

Stirling

1,188

4,371

538

809

5,498

541

77

1,300

67

14,389

West Dunbartonshire

907

2,291

62

670

3,427

342

4

228

0

7,932

West Lothian

3,342

3,939

444

1,401

6,565

617

10

131

28

16,477

Scotland

93,988

214,418

13,620

61,511

240,663

26,303

3,988

26,330

3,316

684,137

1. Estimates include mandatory and discretionary elements of relief where applicable, but exclude backdated payments of relief. Figures exclude local reliefs, or top-ups to discretionary reliefs which the local authorities award themselves.

2. Figures are final audited figures.

3. Other includes Hardship, Enterprise Areas, New Start, Fresh Start and Rural Rate Relief.

Source: Non-domestic Rate Income Returns from Councils

Each council reports to the Scottish Government the amount of NDR collected which is to be included in the annual NDR Account which is published as part of the overall Scottish Government’s annual accounts. The amount to be distributed to each authority as part of the annual local government finance settlement 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 local government funding distribution methodology sees Councils retain all of the NDR income collected in their area (the previous policy saw NDR redistributed on the basis of population shares). As the combined total of NDR income and General Revenue Grant (GRG) provided to councils is guaranteed by the Scottish Government, any increase in the amount of NDR collected is compensated for by a corresponding decrease in GRG and vice versa. Any changes from the assumed collection amount in any year is paid out or recovered from Councils in the calculation of future years distributable business rates totals. The Distributable Amount is based upon an estimate of the NDR income made prior to the year start, and includes prior year adjustments. It will not therefore match exactly the NDR income received in any year (as given in tables 1.14 and 1.15), nor the total eventual contributions to the pool for any year.

The calculation of the distributable amount for 2017-18 is given in Annex F and the 2017-18 distributable amount per local authority is shown in Table 1.17.

There are two current policy initiatives that directly linked to the NDR collected.

A Business Rates Incentivisation Scheme (BRIS) was introduced from April 2012 to incentivise councils to maximise existing business rates income and attract new economic growth by allowing all authorities that exceed their annual business rates buoyancy target (the target percentage increase in their tax base) to benefit from receiving additional grant equal to 50% of any additional NDR income. In effect this means that only 50% of the additional NDR attributable to the increased buoyancy is deducted from the GRG. This increased funding is carried forward between revaluation years, with each year’s increased funding being carried forward to the next year and added to any new retention awarded, assuming the previous year’s income is maintained. In 2017-18 the amount the additional funding received under this scheme (according to the authorities’ returns) was £1.03 million (cumulative £8.9 million in 2016-17).

The Scottish Government is also piloting Tax Incremental Financing (TIF) which allows local authorities to fund public sector infrastructure, which unlocks private sector investment, contributing to sustainable and inclusive economic growth. This growth is funded from future incremental business rates that are generated as a result of attracting more businesses into the area because of upfront public sector enabling investment.

Six pilot TIF schemes were developed through secondary legislation under existing provisions of the Local Government Finance Act (1992). The pilot approach has allowed this model to be tested in Scotland, with four pilot projects currently in place, of which three have received full approval (Argyll & Bute, Falkirk and Glasgow) and one (Fife) has received approval in principle. In 2017-18 the amount of NDR retained by local authorities for TIF projects was (according to the authorities’ returns) £1.5 million (£1.2 million in 2016-17).

Table 1.17 – Non-Domestic Rates Distributable Amount1 by Local Authority, 2017-18

Non-Domestic Rate Distributable Amount (£000s)1

Scotland

2,665,800

Aberdeen City

205,547

Aberdeenshire

95,828

Angus

27,233

Argyll & Bute

29,615

Clackmannanshire

14,928

Dumfries & Galloway

45,529

Dundee City

66,700

East Ayrshire

29,367

East Dunbartonshire

23,586

East Lothian

24,550

East Renfrewshire

14,427

Edinburgh, City of

355,063

Eilean Siar

7,962

Falkirk

65,438

Fife

170,998

Glasgow City

373,238

Highland

122,421

Inverclyde

21,283

Midlothian

29,273

Moray

33,406

North Ayrshire

40,568

North Lanarkshire

114,474

Orkney Islands

9,688

Perth & Kinross

52,035

Renfrewshire

98,908

Scottish Borders

32,673

Shetland Islands

23,240

South Ayrshire

39,756

South Lanarkshire

287,862

Stirling

42,829

West Dunbartonshire

77,319

West Lothian

90,056

Source: Local Government Finance Circular 01/2017.

1. The Distributable Amount is the amount distributed to local authorities as part of the annual local government finance settlement; it is based upon an estimate of the NDR income, including prior year adjustments. It is not guaranteed to match the contributable amount of income that year (as given in tables 1.14 and 1.15)

2. The Distributable Amount for 2018-19 was published in December 2017 in the Local Government Finance Circular 05/2017, and will be set out in next year’s publication. 2019-20 Distributable Amount was published in December 2018 and can be found in the Local Government Finance Circular 08/2018.

1.6 Customer and Client Receipts

Local authorities receive income from sales, rents, fees and charges as a result of providing a range of services. The amount of income associated with each service is detailed in Table 1.18 below.

The total customer and client receipts received by local authorities has decreased by 0.7%, from £2,537 million in 2016-17 to £2,520 million in 2017-18. In the General Fund this has decreased by 2.8%, from £1,371 million in 2016-17 to £1,333 million in 2017-18. Almost half (47%) of customer and client receipts are attributable to the HRA which has seen receipts increase by 1.8% from £1,166 million to £1,187 million in 2017-18.

Table 1.18 – Customer and Client Receipts – 2013-14 to 2017-18

£thousands

2013-14

2014-15

2015-16

2016-17

2017-18

Education

120,563

124,200

122,477

129,671

125,302

Cultural & Related Services

71,185

72,567

68,799

77,823

90,980

Social Work

276,012

275,301

264,079

262,481

272,355

Roads & Transport

175,384

182,690

182,978

167,044

170,851

Environmental Services

117,457

112,180

123,825

114,394

117,169

Planning & Development Services

121,077

120,161

134,682

119,161

128,862

Central Services

131,709

143,806

162,394

242,788

202,596

Non-HRA Housing

160,800

155,076

159,635

166,188

147,559

Trading Services

69,843

69,639

63,077

91,816

77,144

Total General Fund (GF) Customer and Client Receipts

1,244,030

1,255,620

1,281,946

1,371,366

1,332,818

Housing Revenue Account (HRA)1

1,073,362

1,112,210

1,140,720

1,165,976

1,187,114

Total GF + HRA Customer and Client Receipts

2,317,392

2,367,830

2,422,666

2,537,342

2,519,932

1. The Housing Revenue Account (HRA) records income and expenditure relating to the provision of Local Authority housing.

Source: Local Financial Returns (LFRs)