Scottish Government

This item was published during the term of a previous administration that ended in April 2007

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Increased funding for public services

06/12/2001

Local Authorities will receive an increase of almost 11% in funding next year, it was announced today.

Minister for Finance and Public Services Andy Kerr also announced a further above inflation increase in council funding for the following year and a provisional non-domestic rate poundage for 2002-03 of 47.8p.

In a statement to Parliament, Mr Kerr said;

"Local authorities will get an extra £350 million pounds on top of the three year allocations we announced last year. This brings the total revenue grant support they'll receive next year to £6.7 billion. That will rise again in 2003-04 to over £7 billion.

"Investment on this scale is unprecedented and demonstrates our commitment to providing better public services and to the continuing vital role local government plays in delivering these services.

"I want every council to provide excellent services but also to be constantly seeking improvement. I believe the Executive has a key role in working in partnership with councils to deliver services of real quality to the communities they serve.

"The additional resources I am announcing today build on top of the real term increases announced last year. The allocations reflect our priorities for providing children with the best possible start in life and closing the opportunity gap.

"We are also allowing local authorities additional flexibility in how they use resources, with the abolition of certain ring-fenced controls.

"We are keen to focus on what we and service users are really interested in: the actual outcomes that are being achieved. It is vital that councils make effective use of these increased funds and work with other local agencies to provide better integrated services that deliver quality and put people's needs first. We want to ensure that local authorities have the powers and responsibility to deliver real and visible improvements in public services.

"I am also announcing today a provisional non-domestic rate poundage for 2002-03 of 47.8p. This is an increase of 1.7% and fulfils our commitment to limit year on year increases to growth in the retail price index. We will seek the views of business organisations before confirming the poundage early next year."

Guaranteed revenue and capital allocations for each local authority for this year and the following 2 years were announced in December 2000. The allocations for local authority capital investment are increasing by 40% over 3 years. The Minister's announcement confirms additional funding and transfers to councils for next year for revenue expenditure on services, including care services for older people and other client groups, additional adult literacy and out of school services and funding to assist councils in preparing for new housing support responsibilities. The allocations also include resources being transferred from ring-fenced grant to general grant provision, allowing authorities additional flexibility in how the funds are used.

The total revenue allocations are as follows:

2001-02 2002-03 2003-04

£m £m £m

Total Aggregate External Finance 6,048.8 6,694.5 7,067.5 Total Yr on Yr Increase (£m) 645.7 373.0

Total Yr on Yr Increase (%) 10.7% 5.6%

*Aggregate External Finance - Total Scottish Executive revenue grant support for council services.

The distribution of these resources and the original settlement allocations were agreed following consultation with the Convention of Scottish Local Authorities. The individual council allocations do not yet include the £125m previously announced by the Executive to fund personal and nursing care costs, for which distribution arrangements have still to be finalised, and certain other undistributed funds.

YEAR ON YEAR AEF ALLOCATIONS 2002-03 AND 2003-04

NOTES

The AEF increases are based on the actual amounts of AEF distributed to councils and differ from the headline figures because of the exclusion of £125m for personal care costs and other undistributed funds (e.g. undistributed education specific grants and police loan charges).