Latest Statements On The Budget But Headlines Hide The Shortfall Calculated By COSLA

23rd December 2023

COSLA as Challenged the Scottish Government Settlement for councils in the budget allocations for 2024/25.

Read the COSLA Statement HERE

Then the Scottish Government Press Release issued at 5.38pm on 22 December 2024. Timed to miss more reactions but no doubt it will come after the holidays. This leaves councils to take the hard decisions on cuts and staffing reductions. The Scottish Government says it is Fair and Reasonable but others will beg to differ. A council tax freeze may appear to be good for the council tax payers but not only does it reduce the capacity to deliver services in the year but it also erodes the overall tax base for the future as previous freezes have already done. It means that future years increases are set on a reduced figure in the previous years. Yes we know it is not an easy fact to get your head round but think about it.

Note the exaggeration of the word "record" as with inflation most government figures are record breaking every year but that does now mean they are keeping up with inflation and increased costs.

The Statement from Scottish Government

Councils will receive a record £14 billion funding settlement, according to provisional details that have been published today.

Local authorities have each been allocated a share of £13.9 billion to fund their day-to-day activities, including £6 million to support the expansion of free school meals, £242 million for teacher pay rises and more than £266 million for local government pay deals.

Ministers have also made available a further £144 million to enable local authorities to freeze Council Tax rates at their current levels, equivalent to an above-inflation 5% rise in council tax nationally. The Scottish Government is in talks with COSLA over how this will be allocated.

Deputy First Minister and Cabinet Secretary for Finance Shona Robison said, "In the face of a profoundly challenging financial situation, we are making available record funding of over £14 billion to councils - a real-terms increase of 4.3% on the previous year - should they agree to freeze council tax. The £144 million for the council tax freeze would be equivalent to an above-inflation 5% rise in council tax nationally.

"We recognise the crucial role councils play in their communities, which is why we have increased their overall share of the Scottish Budget.

"We have made no secret of the tough choices that have been required to balance our Budget, after an Autumn Statement that failed to provide the funding Scotland needs for its public services. While I know councils had sought more funding, the settlement confirmed today represents a fair and sustainable offer.

"We have chosen to invest in our people and public services. This is a Budget that reflects our shared values as a nation and speaks to the kind of Scotland that we want to be with a record settlement for local councils at its heart."

Proposed legislation to implement the 2024-25 Scottish Budget has been introduced to the Scottish Parliament.

With tax hikes and cuts to capital spending and unhappy councils looking at hard budgets in February the sparks will be flying.

Scottish businesses are unhappy that they are not to get the same treatment on non-domestic rates as in England where up to 100% relief is being offered to many there. Committee then consider the detail of the Bill and any Government amendments ahead of the Parliament's final debate and vote on whether the Bill should become law.

Proposed income tax rates and bands, which will apply from April, are set out in a Scottish Rate Resolution that is subject to a separate vote before the final stage of the Bill.

Underpinned by a ‘social contract' with the people of Scotland, the Budget sets out targeted funding to invest in public services and protect the most vulnerable in the face of a deeply challenging financial situation. It includes a £6.3 billion investment in social security and more than £19.5 billion for health and social care, alongside record funding for local authorities and frontline police and fire services.

Deputy First Minister and Finance Secretary Shona Robison said, "As I set out in Parliament, this is a Budget that reflects our shared values as a nation and speaks to the kind of Scotland we want to be. Through the choices we have made, we have been true to our values and rigorous in prioritising spending where it will have the most impact.

"The spending plans we have set out are the product of constructive engagement with partners. The wider financial circumstances are the most challenging since the Scottish Parliament was established in 1999, reflecting a worst case scenario UK Government Autumn Statement and the economic circumstances of Britain post-Brexit.

"As members begin the crucial work of scrutinising these plans, I remain committed to dialogue to build consensus across Parliament on the difficult choices that need to be made to deliver investment in Scotland's people and public services."

The publication starts the formal consultation period on the 2024-25 local government settlement. Final allocations will be published following approval by the Scottish Parliament, expected in February.

Funding of £365.3 million has yet to be considered by the joint Settlement and Distribution Group so remains undistributed at this stage. This funding will be allocated in full to local authorities ahead of the Local Government Order.

The Office for Budget Responsibility's projection for inflation in the coming year is 3%.

The Scottish Government recently consulted on plans to raise the higher council tax band multipliers but chose not to proceed with the proposals in light of the consultation responses. The £144 million made available for the Council Tax Freeze is comparable with the £148 million figure the Fraser of Allander Institute estimate local authorities require to fund the council tax freeze, minus the potential multiplier income.

See the allocations proposed at
https://www.gov.scot/news/gbp-14-billion-for-councils/