The Scottish Parliament and Scottish Parliament Infor mation C entre l ogos .

Financial Scrutiny Unit Briefing

Local Government Funding: Draft Budget 2016-17 and provisional allocations to local authorities

21 January 2016

16/07

Allan Campbell

This briefing discusses and analyses the Scottish Government’s budget for local government, and the provisional allocations to individual local authorities, for 2016-17. A revised local government finance circular, containing updated allocations to local authorities, will be published shortly.

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CONTENTS

EXECUTIVE SUMMARY .............................................................................................................................................. 3

DRAFT BUDGET 2016-17: LOCAL GOVERNMENT.................................................................................................. 4

LOCAL GOVERNMENT BUDGET BREAKDOWN .................................................................................................. 4 REAL TERMS CHANGE IN GENERAL RESOURCE GRANT + NDRI ................................................................... 5 SCOTTISH GOVERNMENT FIGURE – 2% REDUCTION ...................................................................................... 5 ADJUSTING THE BUDGET FOR REPROFILING AND OTHER IN-YEAR CHANGES .......................................... 5 LOCAL GOVERNMENT SHARE OF THE SCOTTISH BUDGET ............................................................................ 6 LOCAL GOVERNMENT BUDGET SINCE ESTABLISMENT OF THE SINGLE POLICE AND FIRE FORCES ..... 7 NON-DOMESTIC RATES INCOME ......................................................................................................................... 8 COUNCIL TAX ......................................................................................................................................................... 8 COMMITMENTS ...................................................................................................................................................... 9

PROVISIONAL ALLOCATIONS TO LOCAL AUTHORITIES ..................................................................................... 9

PROCESS FOR 2016-17 ALLOCATIONS ............................................................................................................... 9 FUNDING METHOD............................................................................................................................................... 10 PROVISIONAL REVENUE ALLOCATIONS .......................................................................................................... 10

Provisional revenue allocations – real terms change ........................................................................................ 11 Provisional revenue allocations – per head ....................................................................................................... 14

PROVISIONAL CAPITAL ALLOCATIONS ............................................................................................................. 16

ANNEX – DETAILED TABLES .................................................................................................................................. 18

SOURCES .................................................................................................................................................................. 26

RELATED BRIEFINGS .............................................................................................................................................. 28

GLOSSARY

Various abbreviations are used throughout this briefing. A key is set out below.

AME – Annually Managed Expenditure

DEL – Departmental Expenditure Limit

GRG – General Revenue Grant (also known as General Resource Grant)

LG – Local Government

NDRI – Non-Domestic Rates Income

NPD – Non-Profit Distributing Model

P+F – Police and Fire

SG – Scottish Government

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EXECUTIVE SUMMARY

The total allocation from the Scottish Government to local government in 2016-17 will be £10,152.3m, a substantial reduction on the 2015-16 allocation of £10,756.7m, although some of this reduction is due to reprofiling and other changes to capital expenditure.

Local government’s percentage share of the Scottish budget also falls 1.7 percentage points from 32.3% to 30.6% in 2016-17 (although once adjustments are made to allow a like for like comparison, the percentage share falls by 1.1 percentage points).

Within this total allocation, the combined General Resource Grant + Non-Domestic Rates Income figure, which is used to calculate local government’s total revenue settlement, falls by 5.2%, or more than £500 million, in real terms (the equivalent figure in cash terms is a reduction of 3.6%, or £349m).

In historic terms, since the 2013-14 transfer of police and fire to the central forces, the local government settlement has fallen by 1.9% in real terms (-£200.9m), whereas the Scottish Government’s DEL+NDRI has increased by 3.2% in real terms (+£1,018.8m).

Non-Domestic Rates income is forecast to fall by 2.8% in real terms in 2016-17. This is in contrast to the previous spending review period, which saw annual above inflation increases in NDRI. The Draft Budget explains that this is due to lower than forecast growth in the tax base and low inflation resulting in low growth in poundage.

The Draft Budget further confirms that the local government settlement contains an additional £70m to freeze the Council Tax for another year. This brings the total cost of the freeze in 2015-16 to £630m, and the total cumulative cost from 2008-09 to 2016-17 to £3,150m, assuming all local authorities agree to the terms of the freeze.

It should be noted that the allocations to local authorities in this briefing are still subject to discussion between the Scottish Government and local government and are provisional at this point.

Bearing that in mind, given the overall settlement, unsurprisingly all local authorities are due to receive a significant real terms reduction in their revenue settlement.

In percentage terms, those councils who face the largest reductions are Shetland, Eilean Siar, Dundee City and Orkney which all receive real terms reductions of more than 5.5%.

In absolute terms, those councils who face the largest reductions are Glasgow, Edinburgh, North Lanarkshire and South Lanarkshire, who all receive real terms reductions of more than £29 million. Again though it must be noted that these allocations are provisional, and subject to change when a revised Local Government Finance Circular is issued.

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DRAFT BUDGET 2016-17: LOCAL GOVERNMENT

LOCAL GOVERNMENT BUDGET BREAKDOWN

The presentation of local government in the 2016-17 Draft Budget has changed. Rather than its own portfolio chapter, local government is now included within the “Social Justice, Communities and Pensioners’ Rights” portfolio.

The total allocation to local government in 2016-17 will be £10,152.3m. This is a substantial reduction on the 2015-16 allocation of £10,756.7m, although some of this is due to reprofiling and other changes made to capital aspects of the budget. Table 1 and Figure 1 below set out the level 3 breakdown of the local government settlement, as presented in the Draft Budget (and so not re-calculated for reprofiling and other changes), in cash and real terms. Table 2 on page 6 adjusts the budget for these changes.

Table 1 – Local Government – level 3 breakdown

£m 2015-16 2016-17 (cash)

Cash change

Cash change %

2016-17 (real, 2015-16 prices)

Real change

Real change %

General Revenue Grant

7,004.0 6,685.9 -318.1 -4.5% 6,574.1 -429.9 -6.1%

Non-Domestic Rates

2,799.5 2,768.5 -31.0 -1.1% 2,722.2 -77.3 -2.8%

Support for Capital

716.2 480.6 -235.6 -32.9% 472.6 -243.6 -34.0%

Specific Resource Grants

91.9 91.0 -0.9 -1.0% 89.5 -2.4 -2.6%

Specific Capital Grants

145.1 126.3 -18.8 -13.0% 124.2 -20.9 -14.4%

Total Local Government

10,756.7 10,152.3 -604.4 -5.6% 9,982.6 -774.1 -7.2%

of which: RDEL 7,095.9 6,776.9 -319.0 -4.5% 6,663.6 -432.3 -6.1%

CDEL 861.3 606.9 -254.4 -29.5% 596.8 -264.5 -30.7%

AME 2,799.5 2,768.0 -31.5 -1.1% 2,721.7 -77.8 -2.8%

GRG+NDRI 9803.50 9454.40 -349.1 -3.6% 9296.34 -507.16 -5.2%

Note: both the capital allocations and “Total Local Government” are affected by reprofiling and other changes. Table 2 below adjusts these budgets for these changes.

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Figure 1 – Local Government settlement 2016-17

REAL TERMS CHANGE IN GENERAL RESOURCE GRANT + NDRI

The Scottish Government guarantees the combined general resource grant and distributable non-domestic rate income figure, approved by Parliament, to each local authority. If non-domestic rate income is lower than forecast, this is compensated for by an increase in general revenue grant and vice versa.

Therefore, to calculate Local Government’s revenue settlement, the combined general resource grant + NDRI figure is used. Table 1 above shows that the combined GRG+NDRI falls by £507 million, or 5.2%, in real terms. In cash terms this is a reduction of £349 million, or 3.6%. This calculation is not affected by the reprofiling issue, as it only concerns revenue budgets.

SCOTTISH GOVERNMENT FIGURE – 2% REDUCTION

The Scottish Government has regularly cited a figure of a 2% reduction in “councils’ budgets” during Parliamentary proceedings (see for example, First Ministers Questions, 14 January 2016). The Government has confirmed (Scottish Government 2016) that there are two parts to this method of calculating the reduction in the local government settlement:

First, the Government uses a figure of £320m for the cash reduction in the local government revenue budget. This is the £350m cash reduction in GRG+NDRI (rounded from £349.1m – see table 1 above) reduced by £30m through an extra £30m from the Children and Young People Act that was added to the overall revenue figures in Local Government Finance Circular 7/2015, but is not in the Draft Budget.

This £320m is then compared to local government’s “total estimated expenditure” in 2016-17, which the Government states will be £15,800 million, giving a figure of 2% (i.e. £320m as a percentage of £15,800m). In addition to government grant, this figure includes estimated income from the council tax and from fees and charges. The most recently available outturn figure for “total gross revenue expenditure” by local government (Scottish Government 2015b) is £15,300 million in 2013-14. It appears that the estimated figure of £15,800 million has been derived from this outturn figure.

ADJUSTING THE BUDGET FOR REPROFILING AND OTHER IN-YEAR CHANGES

From the numbers presented in the Draft Budget, the capital allocation appears to be falling substantially – by more than 30% in 2016-17. However, as noted above, this includes a number of reprofiling and other changes in both 2015-16 and 2016-17 (see footnotes 3 and 4 to table

General Revenue

Grant: £6,685.9

Non- Domestic

Rates: £2,768.5

Support for

Capital: £480.6

Specific Resource

Grants: £91.0

Specific Capital

Grants £126.3

6

9.12 in the Draft Budget). It is not clear from the Draft Budget exactly how to adjust the figures to make them comparable on a “like for like” basis.

The Government has confirmed (Scottish Government 2016) that the starting point for local government’s capital allocation is a commitment by the Government to maintain local government’s percentage share (26.02%) of the total Scottish Capital DEL (excluding financial transactions) from 2015-16. This is the baseline, to which other in-year and year-to-year reprofiling is added to, and taken away from, to produce the allocations in the Draft Budget. Table 2 below sets out both the like for like figures, as supplied by the Government, and the actual figures in the Draft Budget. Table 4 in the Annex reconciles these figures precisely and sets out each individual change involved.

Table 2 shows that, once the capital budget is adjusted in this way, the real terms change in the Local Government capital budget becomes +4.5% (compared to -30.7% in the unadjusted budget) and the real terms change in “Total Local Government” is -4.5% (compared to -7.2% in the unadjusted budget).

Table 2 – Local Government capital and total settlement – adjusted

£m 2015-16 2016-17 (cash)

2016-17 (real, 2015-16 prices)

Real change

Real change

DEL Capital 861.3 606.9 596.8 -264.5 -30.7%

Effect of reprofiling and other changes

-168.2 130.0

Adjusted (maintaining 26.02% capital share)

693.1 736.9 724.6 31.5 4.5%

Total Local Government

10,756.7 10,152.3 9,982.6 -774.1 -7.2%

Effect of reprofiling and other changes

-168.2 130.0

Adjusted (maintaining 26.02% capital share)

10,588.5 10,282.3 10,110.4 -478.1 -4.5%

LOCAL GOVERNMENT SHARE OF THE SCOTTISH BUDGET

In terms of local government’s share of the Scottish budget, to ensure comparability, this is calculated on the basis of the total local government settlement as a percentage of Scottish Government DEL+NDRI. Table 3 shows that local government’s share of the Scottish budget is falling by 1.7 percentage points. Again, this is based on the figures presented in the Draft Budget.

The adjustments made to the capital budget referred to throughout this briefing also affect this calculation – once adjustments are accounted for, local government’s share of the overall budget falls by 1.1 percentage points.

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Table 3 – Local Government – share of the Scottish Budget

£m 2015-16 2016-17 (cash) Change (percentage points)

LG total 10,756.7 10,152.3

SG DEL+ DNRI 33,336.5 33,212.6

LG as a % of SG DEL+NDRI 32.3% 30.6% -1.7

LG total (including changes in table 2)

10,588.5 10,282.3

SG DEL+ NDRI (including changes in table 2)

33,168.3 33,342.6

LG as a % of SG DEL+NDRI (including changes in table 2)

31.9% 30.8% -1.1

LOCAL GOVERNMENT BUDGET SINCE ESTABLISMENT OF THE SINGLE POLICE AND FIRE FORCES

In September 2015, SPICe published Local Government Finance: facts and figures, 1999-2016 (Campbell 2015), which provided a range of historical financial data, including estimates of the local government settlement both with and without the transfer of police and fire funding to the single forces in 2013-14. This briefing will be updated in March, once the latest Local Government Financial Statistics have been published.

With Draft Budget 2016-17, there are now four financial years since the transfer of police and fire functions. Therefore, rather than having to provide complex estimates involving transferring back in estimates of police and fire funding, we can look solely at the local government settlements from 2013-14 to 2016-17. Figure 2 and table 5 in the Annex show the annual year on year change in both the local government settlement and the Scottish Government’s DEL+NDRI. All numbers in the figure and table have been reprofiled as explained earlier, including additional changes to earlier years, as set out in the September SPICe briefing.

Overall, since 2013-14, the local government settlement has fallen by 1.9% in real terms (-£200.9m), whereas the Scottish Government’s DEL+NDRI has increased by 3.2% in real terms (+£1,018.8m).

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Figure 2 – historic local government settlements since police and fire transfers, compared to Scottish Government DEL+NDRI

Note: figures have been adjusted for reprofiling and other changes, as detailed in Local Government Finance: facts and figures, 1999-2016 and table 4 in the annex to this briefing.

NON-DOMESTIC RATES INCOME

Non-Domestic Rates income is forecast to fall by 2.8% in real terms in 2016-17. This is in contrast to the previous spending review period, which saw annual above inflation increases in NDRI. The Draft Budget states that this is due to lower than forecast growth in the tax base and low inflation resulting in low growth in poundage, although the precise reasons behind the forecast are unclear. The Government is proposing a number of changes to the large business supplement and some reliefs.

Local Government Finance Circular 7/2015 provides further details of the changes to NDR for 2016-17, including:

The provisional poundage rate of 48.4p, with a large business supplement of 2.6p. These will be confirmed following imminent publication of the English equivalent rate. The current poundage is 48p with a large business supplement of 1.3p

Changes to empty property relief

Changes to renewable energy relief

A continuation of the small business bonus scheme.

COUNCIL TAX

The Government confirmed that it is currently considering its response to the recently published report of the Commission on Local Tax Reform (2015), “and will bring forward detailed

2.4%

0.3%

-4.5%

-1.9%

2.7%

1.3%

-0.8%

3.2%

2014-15 2015-16 2016-17 2013-14 to

2016-17

Local Government Scottish Government

9

proposals in the new year to reform the current system, drawing on the evidence considered by the Commission.”

The Draft Budget further confirms that the settlement contains an additional £70m to freeze the council tax for another year. This brings the total cost of the freeze in 2015-16 to £630m, and the total cumulative cost from 2008-09 to 2016-17 to £3,150m, assuming all local authorities agree to the terms of the freeze.

COMMITMENTS

Aside from the council tax freeze, local government is also expected to maintain teacher numbers at 2015 levels nationally, and secure places for all probationers under the teacher induction scheme. Circular 7/2015 also confirms that, for 2015-16 the Scottish Government would not seek to claw back funding from those local authorities who had not met the teacher number or pupil teacher ratio targets. But, it also notes that only those authorities who have met the targets would receive a share of the additional £10m held back.

The Draft Budget and the Circular both also refer to an “additional £250 million transfer from the NHS to health and social care partnerships to ensure improved outcomes in social care.” But, this amount is not included in the local government settlement (it is in the Health budget). There is also a “£33 million investment in attainment”, in the Education budget. As this is related to schools, it could broadly be termed local government funding but, again, the amounts are not included in the local government settlement.

It should be noted that these commitments are still subject to further discussions between the Scottish Government and COSLA so are not, at this stage, fixed.

PROVISIONAL ALLOCATIONS TO LOCAL AUTHORITIES

PROCESS FOR 2016-17 ALLOCATIONS

As with the parliamentary process for the Scottish Government’s budget, the process for allocating funds to individual local authorities has also been affected by the delay in publication of the UK Government’s Spending Review. Following publication of the provisional allocations in Circular 7/2015, the amended parliamentary process for consideration of the allocations to local authorities runs as follows:

16 December 2015 – Draft Budget 2016-17 and Local Government Finance Circular 7/2015 published, setting out provisional allocations to local authorities

15 January 2016 – Initial deadline for COSLA to respond to provisional allocations. On 21 January it was announced that a new deadline had been set, and discussions were expected to conclude shortly (BBC News 2016).

Late February 2016 – Likely date for Budget Bill Stage 3. Local Government Finance Order follows very shortly after (normally the next day), containing the formal allocations of the funding settlement for 2016-17.

Throughout the Circular to local authorities, the Scottish Government only refers to COSLA, and not the new Scottish Local Government Partnership set up by four councils that left COSLA in 2015. Therefore it would appear that those councils will still need to communicate any issues with the circular through COSLA. It is not clear how these arrangements will work in practice, nor is it clear how the Scottish Local Government Partnership has inputted to the discussion to date. It is the Scottish Government’s policy to only negotiate with COSLA.

10

The figures for revenue support in the Draft Budget do not match those in the Circular. This is due to the figures in the Circular including allocations from other portfolios.

It should be noted that these allocations are still subject to discussion between the Scottish Government and local government and are still provisional at this point. A further Local Government Finance Circular will be issued in due course with revised allocations, and at that point SPICe may re-issue a note on the revised allocations.

FUNDING METHOD

The method for funding local authorities is described in detail in a SPICe briefing paper for the Local Government and Regeneration Committee, issued in March 2014 (Berthier 2014).

PROVISIONAL REVENUE ALLOCATIONS

The provisional revenue allocations for 2016-17 to local authorities are set out in Annex C of Circular 7/2015, and reproduced in the annex to this briefing. However, there are a number of funds still to be distributed for 2016-17. To make a like for like comparison with 2015-16, these funds need to be removed from 2015-16 allocations. These like for like allocations are set out in figures 3, 4 and 5 below and in table 6 in the Annex.

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Provisional revenue allocations – real terms change

Figure 3 – revenue allocations – real terms change 2015-16 to 2016-17, %

Aberdeenshire

West Lothian

East Dunbartonshire

East Renfrewshire

East Lothian

Midlothian

Fife

Stirling

Perth & Kinross

Moray

Aberdeen City

Scottish Borders

Renfrewshire

Scotland

Edinburgh, City of

North Ayrshire

West Dunbartonshire

South Ayrshire

Clackmannanshire

South Lanarkshire

Falkirk

Angus

Inverclyde

Highland

Glasgow City

East Ayrshire

Argyll & Bute

North Lanarkshire

Dumfries & Galloway

Orkney

Dundee City

Eilean Siar

Shetland-6.2%

-5.9%

-5.5%

-5.5%

-5.4%

-5.3%

-5.2%

-5.2%

-5.2%

-5.2%

-5.1%

-5.1%

-5.0%

-5.0%

-5.0%

-4.9%

-4.8%

-4.7%

-5.1%

-5.2%

-4.4%

-4.3%

-4.2%

-4.2%

-4.2%

-4.2%

-4.1%

-4.1%

-4.0%

-3.4%

-3.3%

-3.0%

-2.6%

12

Figure 4: provisional revenue allocations – real terms change 2015-16 to 2016-17, % (map)

Revenue AllocationReal Change %

Between -5.1% and -6.2%

Between -4.7% and -5.1%

Between -4.0% and -4.7%

Between -2.6% and -4.0%

13

Figure 5: provisional revenue allocations – real terms change 2015-16 to 2016-17, £m

Orkney

Clackmannanshire

Shetland

Eilean Siar

East Dunbartonshire

East Renfrewshire

Midlothian

Moray

East Lothian

Stirling

Inverclyde

Scottish Borders

West Lothian

West Dunbartonshire

South Ayrshire

Angus

Perth & Kinross

Argyll & Bute

Aberdeenshire

East Ayrshire

North Ayrshire

Renfrewshire

Aberdeen City

Falkirk

Dumfries & Galloway

Dundee City

Highland

Fife

South Lanarkshire

North Lanarkshire

Edinburgh, City of

Glasgow City-65.2

-35.3

-32.7

-29.1

-26.2

-23.7

-16.3

-15.7

-14.2

-14.0

-13.5

-13.3

-12.0

-10.9

-10.5

-10.5

-10.3

-10.1

-9.5

-9.2

-8.9

-8.8

-7.1

-6.9

-6.7

-6.3

-6.1

-6.1

-6.0

-6.0

-4.8

-3.8

14

Provisional revenue allocations – per head

Figures 6 and 7 below show the provisional 2016-17 revenue allocations per head, and the per head allocations as a percentage of the Scottish average.

Figure 6 – revenue allocations – £ per head and as % of Scottish average

176.3%

201.1%

199.5%

125.9%

114.6%

114.5%

113.7%

109.4%

107.5%

106.8%

105.7%

105.4%

102.1%

101.8%

100.0%

99.9%

99.9%

99.8%

98.4%

98.0%

97.7%

97.3%

96.8%

96.2%

95.9%

95.1%

94.9%

92.3%

91.9%

91.6%

88.1%

81.4%

80.6%

Aberdeenshire

West Lothian

East Dunbartonshire

East Renfrewshire

Perth & Kinross

Moray

Aberdeen City

East Lothian

Renfrewshire

Stirling

Midlothian

Edinburgh, City of

North Ayrshire

South Ayrshire

Scottish Borders

Falkirk

Clackmannanshire

Angus

Inverclyde

East Ayrshire

North Lanarkshire

Glasgow City

West Dunbartonshire

South Lanarkshire

Highland

Orkney

Dundee City

Shetland

Argyll & Bute

Dumfries & Galloway

Eilean Siar

Scotland

Fife

3,565

3,536

3,125

2,232

2,032

2,031

2,017

1,939

1,906

1,894

1,874

1,869

1,810

1,805

1,773

1,772

1,771

1,769

1,745

1,738

1,731

1,724

1,716

1,705

1,700

1,686

1,682

1,636

1,6301,624

1,562

1,444

1,429

15

Figure 7: provisional revenue allocations per head as % of Scottish average (map)

Revenue calculations have included a “minimum floor” arrangement for a number of years to ensure a minimum guaranteed increase in revenue funding to every local authority in years where the overall general revenue funding increases and conversely a maximum level of decrease when the overall total declines. In addition to this, as part of the previous Spending Review in 2011, local government finance settlements included a mechanism to ensure that no local authority received less than 85% of the Scottish average in revenue support.

Revenue Allocation% of Scottish Average

Between 80.6% and 90.0%

Between 90.0% and 100.0%

Between 100.0% and 176.3%

Between 176.3 and 201.1%

16

At the time of the previous spending review, this funding to Aberdeen City Council and Edinburgh City Council saw the revenue allocations per head rise to 85.5% of the Scottish average. But, this was before the removal of the police and fire funding (and functions) from local government. With the removal of police and fire funding from 2013-14 onwards, as Aberdeen and Edinburgh spent proportionally more on police and fire than other local authorities, those two local authorities slipped below the 85% funding floor. But, they still received the initial “85%” allocation agreed in the 2011 spending review. For 2016-17, there is still an “85% floor” line in the Circular, which states that it “has been calculated to meet the Scottish Government’s commitment to ensure that no Local Authority receives less than 85% of the Scottish average in terms of revenue support at the time of the outcome of Spending Review 2011.” As can be seen from Figure 6 above, even with the “85% floor” money, both Aberdeen and Edinburgh’s per head revenue allocation is below 85%, due to the reasons outlined above.

PROVISIONAL CAPITAL ALLOCATIONS

As noted in the earlier section of this Briefing on the Draft Budget, capital allocations for 2016-17 are complicated by a number of reprofiling and other changes, which make accurate year on year comparisons difficult.

Figure 8 below shows the change from 2015-16 to 2016-17 in capital allocations on a like for like basis, in real terms. A full breakdown of the like for like figures, and the actual allocations for 2016-17, are in Table 8 of the annexe.

On this basis, all authorities receive a real terms increase, four of which with increases of 9% or greater. The reasons for this are not clear from the Circular.

17

Figure 8 – provisional capital allocations, real terms change, %

0.6%

1.9%

2.7%

2.7%

3.0%

3.1%

3.2%

3.2%

3.2%

3.3%

3.3%

3.3%

3.4%

3.6%

3.8%

3.8%

4.1%

4.1%

4.2%

4.2%

4.3%

4.4%

4.5%

4.5%

4.5%

4.5%

4.6%

4.9%

5.0%

5.1%

5.4%

6.6%

6.8%

9.3%

19.4%

Highland

Clackmannanshire

Renfrewshire

South Lanarkshire

West Lothian

Argyll & Bute

East Dunbartonshire

Midlothian

South Ayrshire

Eilean Siar

Orkney

Scottish Borders

East Ayrshire

Stirling

Fife

Perth & Kinross

Dumfries & Galloway

East Lothian

East Renfrewshire

Glasgow City

Shetland

Aberdeen City

West Dunbartonshire

Undistributed

SPT

Total

Moray

Edinburgh, City of

Falkirk

Aberdeenshire

Inverclyde

Angus

Dundee City

North Lanarkshire

North Ayrshire

18

ANNEX – DETAILED TABLES

Table 4 – Capital budget adjustments – itemised

£m

2015-16 2016-17

Scottish Government Capital DEL (cash terms excluding CDEL Financial Transactions)

2,663.6 2,832.0

Local Government share

26.02% 26.02%

Total settlement based on percentage share

693.1 736.9

Add £20m extra for TMDF (Transfer of Management of Development Funding)

20.0

Add £30m extra for Children and Young Persons Act

30.0

Add £39m extra for Children and Young Persons Act

39.0

Add £5m extra for Shetland Islands Council Housing

5.0

LG Settlement value

767.1 756.9

Less re-profiling

-150.0

Add re-profiling from SR2011

94.2

Capital Settlement to be paid in financial year

861.3 606.9

Of which:

General Capital Grant

711.2 480.6

Specific Grants

150.1 126.3

Total (matches Draft Budget 2016-17 numbers)

861.3 606.9

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Table 5 - historic local government settlements, compared to Scottish DEL+NDRI, since police and fire transfers

Year Total LG Funding from SG (£m)

Total LG Funding from SG (£m) – real, 2016-17 prices

LG funding - annual real change (£m)

LG funding - annual real change (%)

2013-14 10,014.2 10,483.2

2014-15 10,411.4 10,736.7 253.4 2.4%

2015-16 10,588.5 10,768.5 31.9 0.3%

2016-17 10,282.3 10,282.3 -486.2 -4.5%

2013-14 to 2016-17

-200.9 -1.9%

Year SG Total DEL+NDRI (£m)

SG Total DEL+NDRI (£m) – real, 2016-17 prices

SG DEL+NDRI - annual real change (£m)

SG DEL + NDRI - annual real change (%)

2013-14 30,877.6 32,323.8

2014-15 32,176.7 33,181.9 858.1 2.7%

2015-16 33,039.2 33,600.9 419.0 1.3%

2016-17 33,342.6 33,342.6 -258.3 -0.8%

2013-14 to 2016-17

1,018.8 3.2%

20

Table 6 – Provisional revenue allocations – real terms change – like for like

Local Authority - like for like comparison

2015-16 adjusted (cash)

2016-17 adjusted (cash)

Cash change

Cash change %

2016-17 adjusted (real)

Real change

Real change %

Aberdeen City 335.7 327.1 -8.6 -2.6% 321.7 -14.0 -4.2%

Aberdeenshire 410.9 406.9 -4.1 -1.0% 400.0 -10.9 -2.6%

Angus 203.7 196.7 -7.0 -3.4% 193.4 -10.3 -5.1%

Argyll & Bute 202.9 195.7 -7.2 -3.6% 192.4 -10.5 -5.2%

Clackmannanshire 95.9 92.7 -3.3 -3.4% 91.1 -4.8 -5.0%

Dumfries & Galloway

291.3 280.3 -11.0 -3.8% 275.6 -15.7 -5.4%

Dundee City 294.2 282.6 -11.5 -3.9% 277.9 -16.3 -5.5%

East Ayrshire 228.8 220.5 -8.3 -3.6% 216.8 -12.0 -5.2%

East Dunbartonshire

184.5 181.4 -3.1 -1.7% 178.4 -6.1 -3.3%

East Lothian 170.4 166.3 -4.1 -2.4% 163.5 -6.9 -4.0%

East Renfrewshire 178.1 175.0 -3.2 -1.8% 172.0 -6.1 -3.4%

Edinburgh, City of 734.7 711.2 -23.4 -3.2% 699.4 -35.3 -4.8%

Eilean Siar 101.5 97.2 -4.4 -4.3% 95.5 -6.0 -5.9%

Falkirk 280.2 270.6 -9.7 -3.5% 266.0 -14.2 -5.1%

Fife 633.5 617.7 -15.9 -2.5% 607.3 -26.2 -4.1%

Glasgow City 1,254.2 1,209.2 -45.0 -3.6% 1,189.0 -65.2 -5.2%

Highland 453.1 436.7 -16.4 -3.6% 429.4 -23.7 -5.2%

Inverclyde 168.4 162.3 -6.1 -3.6% 159.5 -8.8 -5.2%

Midlothian 153.6 149.8 -3.8 -2.5% 147.3 -6.3 -4.1%

Moray 159.1 155.0 -4.1 -2.6% 152.4 -6.7 -4.2%

North Ayrshire 273.4 264.6 -8.9 -3.2% 260.1 -13.3 -4.9%

North Lanarkshire 621.5 598.8 -22.7 -3.6% 588.8 -32.7 -5.3%

Orkney 70.2 67.5 -2.7 -3.9% 66.3 -3.8 -5.5%

Perth & Kinross 248.3 241.8 -6.5 -2.6% 237.7 -10.5 -4.2%

21

Local Authority - like for like comparison

2015-16 adjusted (cash)

2016-17 adjusted (cash)

Cash change

Cash change %

2016-17 adjusted (real)

Real change

Real change %

Renfrewshire 308.9 300.4 -8.5 -2.7% 295.4 -13.5 -4.4%

Scottish Borders 207.2 201.7 -5.5 -2.7% 198.3 -8.9 -4.3%

Shetland 86.1 82.2 -4.0 -4.6% 80.8 -5.4 -6.2%

South Ayrshire 203.1 196.3 -6.8 -3.4% 193.0 -10.1 -5.0%

South Lanarkshire 566.0 546.0 -20.0 -3.5% 536.9 -29.1 -5.1%

Stirling 166.5 162.2 -4.4 -2.6% 159.5 -7.1 -4.2%

West Dunbartonshire

188.7 182.2 -6.5 -3.4% 179.2 -9.5 -5.0%

West Lothian 306.3 302.1 -4.2 -1.4% 297.0 -9.2 -3.0%

Scotland 9,781.1 9,480.5 -300.6 -3.1% 9,322.0 -459.1 -4.7%

Undistributed

Teachers induction scheme

37.6 37.5 -0.1 -0.3% 36.8 -0.8 -2.0%

Criminal Justice Social Work

86.5 86.5 0.0 0.0% 85.0 -1.4 -1.7%

Gaelic 0.0 0.1 0.1 0.1 0.1

Adjustments removed

Discretionary Housing Payments

35.0 35.0 0.0 0.0% 34.4 -0.6 -1.7%

Free School Meals 53.9 53.9 0.0 0.0% 53.0 -0.9 -1.7%

Total revenue funding

9,994.1 9,693.4 -300.6 -3.0% 9,531.4 -462.7 -4.6%

22

Table 7: Provisional revenue allocations – per head

Local authority 2016-17 actual

2015 mid-year population

Per head % of Scottish average

Aberdeen City 327.1 228,990 1,429 80.6%

Aberdeenshire 406.9 260,500 1,562 88.1%

Angus 196.7 116,660 1,686 95.1%

Argyll & Bute 195.7 87,660 2,232 125.9%

Clackmannanshire 92.7 51,190 1,810 102.1%

Dumfries & Galloway 280.3 149,940 1,869 105.4%

Dundee City 282.6 148,260 1,906 107.5%

East Ayrshire 220.5 122,150 1,805 101.8%

East Dunbartonshire 181.4 106,730 1,700 95.9%

East Lothian 166.3 102,050 1,630 91.9%

East Renfrewshire 175.0 92,380 1,894 106.8%

Edinburgh, City of 711.2 492,680 1,444 81.4%

Eilean Siar 97.2 27,250 3,565 201.1%

Falkirk 270.6 157,640 1,716 96.8%

Fife 617.7 367,260 1,682 94.9%

Glasgow City 1,209.2 599,650 2,017 113.7%

Highland 436.7 233,100 1,874 105.7%

Inverclyde 162.3 79,860 2,032 114.6%

Midlothian 149.8 86,210 1,738 98.0%

Moray 155.0 94,750 1,636 92.3%

North Ayrshire 264.6 136,450 1,939 109.4%

North Lanarkshire 598.8 337,950 1,772 99.9%

Orkney 67.5 21,590 3,125 176.3%

Perth & Kinross 241.8 148,880 1,624 91.6%

Renfrewshire 300.4 174,230 1,724 97.3%

23

Local authority 2016-17 actual

2015 mid-year population

Per head % of Scottish average

Scottish Borders 201.7 114,030 1,769 99.8%

Shetland 82.2 23,230 3,536 199.5%

South Ayrshire 196.3 112,510 1,745 98.4%

South Lanarkshire 546.0 315,360 1,731 97.7%

Stirling 162.2 91,580 1,771 99.9%

West Dunbartonshire 182.2 89,730 2,031 114.5%

West Lothian 302.1 177,150 1,705 96.2%

Scotland 9,480.5 5,347,600.0 1,773 100.0%

24

Table 8 – Provisional capital allocations

Local Authority - like for like comparison - capital settlement

2015-16 adjusted (cash)

2016-17 adjusted (cash)

Cash change

Cash change %

2016-17 (real)

Real change

Real change %

2016-17 actual

Aberdeen City 21.7 23.1 1.4 6.2% 22.7 1.0 4.4% 18.5

Aberdeenshire 27.0 28.9 1.8 6.8% 28.4 1.4 5.1% 22.9

Angus 11.7 12.7 1.0 8.5% 12.5 0.8 6.6% 10.0

Argyll & Bute 12.4 13.1 0.6 4.8% 12.8 0.4 3.1% 10.4

Clackmannanshire

5.2 5.4 0.2 3.6% 5.3 0.1 1.9% 4.5

Dumfries & Galloway

18.6 19.6 1.1 5.9% 19.3 0.8 4.1% 15.7

Dundee City 16.9 18.3 1.4 8.6% 18.0 1.1 6.8% 14.3

East Ayrshire 9.7 10.2 0.5 5.2% 10.0 0.3 3.4% 8.2

East Dunbartonshire

8.7 9.1 0.4 5.0% 9.0 0.3 3.2% 7.5

East Lothian 9.7 10.3 0.6 5.8% 10.1 0.4 4.1% 8.3

East Renfrewshire

6.6 7.0 0.4 6.0% 6.9 0.3 4.2% 5.7

Edinburgh, City of

73.9 78.8 5.0 6.7% 77.5 3.7 4.9% 68.6

Eilean Siar 7.6 8.0 0.4 5.0% 7.9 0.3 3.3% 6.6

Falkirk 12.5 13.3 0.8 6.8% 13.1 0.6 5.0% 10.6

Fife 32.5 34.2 1.8 5.5% 33.7 1.2 3.8% 27.2

Glasgow City 129.9 137.7 7.7 6.0% 135.4 5.4 4.2% 123.2

Highland 31.0 31.7 0.7 2.3% 31.2 0.2 0.6% 25.0

Inverclyde 7.6 8.1 0.5 7.2% 8.0 0.4 5.4% 6.5

Midlothian 8.7 9.1 0.4 5.0% 9.0 0.3 3.2% 7.4

Moray 10.1 10.7 0.6 6.4% 10.6 0.5 4.6% 8.7

25

Local Authority - like for like comparison - capital settlement

2015-16 adjusted (cash)

2016-17 adjusted (cash)

Cash change

Cash change %

2016-17 (real)

Real change

Real change %

2016-17 actual

North Ayrshire 12.5 15.1 2.7 21.5% 14.9 2.4 19.4% 12.0

North Lanarkshire

30.5 33.9 3.4 11.1% 33.3 2.8 9.3% 26.6

Orkney 6.2 6.5 0.3 5.0% 6.4 0.2 3.3% 5.3

Perth & Kinross

15.3 16.2 0.9 5.6% 15.9 0.6 3.8% 13.0

Renfrewshire 15.2 15.9 0.7 4.4% 15.6 0.4 2.7% 12.6

Scottish Borders

13.5 14.1 0.7 5.1% 13.9 0.4 3.3% 11.3

Shetland 6.4 6.8 0.4 6.1% 6.7 0.3 4.3% 5.5

South Ayrshire 10.6 11.2 0.5 5.0% 11.0 0.3 3.2% 9.0

South Lanarkshire

27.9 29.2 1.2 4.5% 28.7 0.8 2.7% 23.2

Stirling 9.3 9.8 0.5 5.4% 9.6 0.3 3.6% 7.9

West Dunbartonshire

8.4 8.9 0.5 6.2% 8.8 0.4 4.5% 7.1

West Lothian 14.4 15.1 0.7 4.8% 14.9 0.4 3.0% 12.1

Undistributed 42.0 44.7 2.7 6.3% 43.9 1.9 4.5% 35.6

SPT 18.9 20.1 1.2 6.3% 19.8 0.9 4.5% 16.0

Total 693.1 736.9 43.8 6.3% 724.6 31.5 4.5% 606.9

26

SOURCES

Berthier, A. (2014) Local Government Revenue Funding Allocations. Edinburgh: Scottish Parliament. Available at: http://www.scottish.parliament.uk/S4_LocalGovernmentandRegenerationCommittee/Meeting%20Papers/20140423-Papers.pdf [Accessed 11 January 2016]

BBC News. (2016) Council funding deadline is extended for more talks. Available at: http://www.bbc.co.uk/news/uk-scotland-scotland-politics-35369176 [Accessed 21 January 2016]

Campbell, A. (2014) Local Government Finance: facts and figures, 1999-2016. Edinburgh: Scottish Parliament. Available at: http://www.scottish.parliament.uk/parliamentarybusiness/92443.aspx [Accessed 11 January 2016]

Commission on Local Tax Reform (2015) Just Change: A New Approach to Local Taxation. Edinburgh: Commission on Local Tax Reform. Available at: http://localtaxcommission.scot/ [Accessed 11 January 2016]

Scottish Government (2015a) Local Government Finance Circular No. 7/2015. Edinburgh: Scottish Government. Available at: http://www.gov.scot/Resource/0049/00491646.pdf [Accessed 11 January 2016]

Scottish Government (2015b) Scottish Local Government Financial Statistics 2013-14. Edinburgh: Scottish Government. Available at: http://www.gov.scot/Publications/2015/02/3131/2 [Accessed 11 January 2016]

Scottish Government. (2015c) Scotland’s Spending Plans and Draft Budget 2016-17. Edinburgh: Scottish Government. Available at: http://www.gov.scot/Resource/0049/00491140.pdf [Accessed 11 January 2016] Scottish Government (2016) Personal communication [unpublished]

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28

RELATED BRIEFINGS

SB 15-58 Local Government Finance: facts and figures, 1999-2016

SB 14-85 Local Government Funding: Draft Budget 2015-16 and provisional allocations to local authorities

SB 15-86 Scottish Government Draft Budget 2016-17

Financial Scrutiny online resources – including spreadsheets, briefings and interactive budget and tax tools

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