Report by:
Jamie Robertson, Chief Finance Officer
TN Number:
215-22
Thursday, 22 December, 2022
Subject:
Scottish Government Budget Update
Responsible Officer:
Jamie Robertson, Chief Finance Officer
Publication:
This Technical Note will be published on the Council’s website following circulation to Members. Its contents may be disclosed or shared outwith the Council.
Details:
- The purpose of this Technical Note is to provide Elected Members with an early indication of the impact of the Depute First Minister’s 2023/24 Scottish Budget parliamentary statement (the statement) on 15 December 2022. The statement and the accompanying budget documents include a range of announcements relevant to the Council and Local Government in general.
- The statement was provided immediately prior to the Council’s meeting on the evening of the 15 December. During the meeting of the Council a commitment was given to provide Elected Members with further detail once early indications and analysis had been carried out. This technical note seeks to provide some indicative analysis albeit this remains caveated based on a number of remaining clarifications and with the accompanying Finance Circular only published on the 20 December. It is important to note that the allocations in the settlement remain provisional at this time with Officers checking for discrepancies. The period of checking will continue until the 20 January after which the final allocations will be notified following approval of the Local Government Finance (Scotland) Order 2023.
- During the statement significant focus was given to an additional £550m of funding being made available for Local Government. In revenue terms this is equivalent to an overall increase to Councils of 3.7% which, and as noted by the Fraser of Allander Institute[1] represents a real terms decrease in funding. This commitment, which covers both revenue and capital funding, falls short of the £1bn assessed as being required by all 32 Councils to address ongoing financial challenges. This position is referenced by the Scottish Parliament Information Council [2] (SPICe) in their initial analysis of the statement.
- In addition to the above much of the funding announced within the statement is required to deliver existing or new Scottish Government Policy initiatives. Such funding will offset the costs associated with this additional work. Having accounted for these a residual cash increase of £71m has been provided for all Councils. The full extent of this position has been reported by COSLA.
- The statement also provided confirmation of flexibility within the Council to set Council Tax with full flexibility and without the application of a cap and, in addition a commitment ‘to work together flexibly and look at ring-fenced and directed funding as part of a partnership agreement between Local and Scottish Government’.
- The exact implications for the Council resulting from each of these commitments are currently being analysed in detail and will be reported once complete. However, and as noted in the Council Report (EPB/157/22/AD), the significant deterioration in the financial gap assessed at now in excess of £20m remains with no significant remedy following the statement from the Depute First Minister. The financial implications of the statement and any subsequent clarifications and alterations will be examined in detail and reported to Council in line with the budget process.
Distribution List:
All Elected Members Corporate Management Team Executive Officers HSCP Management Team Corporate Communications Housing Management Team