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Local Government settlement
08/12/2011
Finance Secretary John Swinney today published funding allocations for Scotland's councils for the next year.
The Government also confirmed:
Mr Swinney said:
"We work closely with local government to deliver better outcomes for people and communities across Scotland. Despite the most dramatic reduction in public spending ever imposed on Scotland by the UK Government, in every year between 2012 and 2015 local government will receive a larger share of Scottish Government funds than in 2007-08. Total support for local government over the three year period will be £34.6 billion.
"I am today announcing the provisional funding allocations to individual local authorities for 2012-13, indicative figures for the following two years and additional support for business.
"As part of our agreement with the COSLA leadership on an approach to delivering Joint Priorities between national and local government, the settlement will help local authorities deliver the council tax freeze, maintain the number of police officers on our streets, maintain teacher numbers and meeting the needs of our most vulnerable and elderly people through improvements to adult social care.
"The package I am offering to local authorities is conditional and it is up to individual authorities to decide whether they wish to accept it. If councils choose to reject, their allocation will be reduced by an average decrease of 5.2 per cent, which equates to an annual £579 million package to pay for our joint priorities.
"The revenue allocations also include an additional £25 million to deliver on our pledge to ensure no council receives less than 85 per cent of the Scottish average in terms of the revenue support they receive.
"Total capital funding for local government in this Spending Review is £1.9 billion which delivers on our commitment to maintain local government's share of the total capital budget at 28 per cent.
"I am committed to ensuring Scotland offers the most competitive business rates in the UK, for example through the Small Business Bonus Scheme. We committed that we would not allow the poundage for business rates to rise above what it is in England during the lifetime of this Parliament. So the 2012-13 business rate poundage will be 45p, the same rate as will apply in England.
"However, I appreciate that in the current climate, businesses will welcome an opportunity to reduce their overheads and I will allow any business the opportunity to spread payment of the normal inflationary increase, which is tied to September RPI of 5.6 per cent, over three years.
"I can also announce the introduction of a Business Rates Incentivisation Scheme from April 2012. Any council that exceeds its annual business rates target will share the additional income equally with the Scottish Government. The scheme therefore incentivises councils to maximise their existing business rates income and to encourage or attract new economic growth which will grow their business rates income.
"I recognise that, like the Scottish Government, councils face a number of competing pressures on their budgets and through our partnership we will work with local authority Leaders to deliver on our shared commitments."
View the individual allocations
If councils reject the offer, the £579 million of resources to be removed is made up of each council's needs based share of:
- £470 million, which is local authorities 49 per cent share of the flat cash funding to be made available as a contribution to Police Boards to allow them to maintain the number of police officers on the streets
- £70 million for the council tax freeze
- £24 million added to the 2012-13 settlement for teacher's pay
- £15 million added as part of the negotiations on the SNCT Teachers agreement in the 2011-12 settlement
The introduction of the floor commitment over two stages ensures that the resources available to each council should be no less than 85 per cent of the average. The calculation is based within a framework that assumes no council receives more than 115 per cent of the average, though this has no impact on councils with higher per capita levels.
The cost of implementing the 85 per cent floor is £18/£19/£18 million across the 2012-15 settlement period. This meets the 85 per cent floor commitment. A second stage will distribute the remaining £25 million budget provision set aside to implement the policy (£7/£6/£7 million) on the basis of their relevant population shares to Aberdeen and Edinburgh councils.
Both councils will receive 85.5 per cent of the adjusted average in 2012-13 which means Aberdeen will receive, on a like-for-like basis, a total increase of £5.3 million and an increase of £25.4 million for Edinburgh next year.