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Record investment for councils
11/12/2008
Councils will share £11.7 billion from the Scottish Government next year to continue delivering and improving vital public services.
This is a funding increase of 5.1 per cent on this financial year and includes money to deal with pressures like free personal care and police, fire fighter and teacher pensions.
To help households in a difficult economic climate, the Scottish Government is again making £70 million available next year for councils to freeze the council tax.
And in a move to help those councils with deposits in Icelandic banks, the Scottish Government will amend accounting rules to ensure no council has to make provision in their 2009-10 budgets for any potential loss. This will give councils time to adjust their financial plans once the position on recovering their money is clearer.
Giving details to Parliament of the local government settlement, including each council's proposed funding for next year, Finance Secretary John Swinney said:
"Since the Concordat with local government was signed last year, we have witnessed the establishment of a new relationship between national and local government. We are now equal partners in delivering the national priorities and high quality services demanded by people up and down Scotland.
"We have removed unnecessary and restrictive ring-fencing and given councils greater freedom and flexibility to do their jobs while increasing the proportion of the Scottish Government's overall budget going to local government.
"We are continuing that trend and funding will rise to £11.7 billion next year, an increase of 5.1 per cent. Individual increases have been discussed and agreed with local government.
"When we signed the Concordat, no-one could have predicted the ferocity of the economic storm that has since engulfed the global economy. We know councils are having to deal with lower than expected income. There is also bound to be greater demand for their services over time. Those changes will, of course, impact on the finances at their disposal and we will continue to discuss these pressures with our local government partners.
"If the economic recovery is to work at both a national and a local level, it must involve local government to ensure we are using all the powers and resources at our joint disposal. That is why we have been discussing with local government the actions councils can take to assist economic recovery and I welcome the steps councils will be taking."
Included within the additional funding amounts in the local government settlement for 2009-10 are:
- £40 million for free personal care
- £42 million for police and fire pensions
- £18 million for teachers pensions
Mr Swinney continued:
"It is thanks to our new relationship, and additional financial support from the Scottish Government, that councils were able last year to put extra cash directly into the pockets of hard pressed taxpayers by freezing or cutting council tax.
"While we work to abolish the unfair council tax, we have again made £70 million available to cover the cost of a continuation of the council tax freeze - I hope all councils will agree again to freeze council tax which will provide further much needed support to those most in need.
"In stark contrast, the crude budget cut imposed on us by the UK Government from 2010-11 as part of the Pre-Budget Report will impact directly on Scotland's funding. It is a cut the Scottish Government will work tirelessly to reverse.
"As we will not know the final implications of the Pre-Budget Report until next year, I have decided that it would be misleading meantime to publish revised figures for 2010-11."
Today is the start of the formal consultation period with local government on the provisional allocations. Final figures will be brought to Parliament as part of the Local Government Finance Order in February, once the Budget Bill has been passed.
Local government finance, as a proportion of the overall Scottish budget, has risen from 33.394 per cent in 2007-08 to 33.774 per cent in 2009-10.
The Scottish Government will bring forward shortly statutory guidance allowing councils - exceptionally - not to make provision in their 2009-10 budgets for any potential loss on investments in Icelandic banks. This measure will give councils time to adjust their medium term financial plans once the position on recovering their money is clearer and so will not affect either their budgets or council tax in the short-term.