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The purpose of this Technical Note is to provide Members with an update following the Scottish Government’s proposed Budget for 2024-25 being announced to the Scottish Parliament.
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The Budget, currently in its draft form, has sought to prioritise and support people through the cost-of-living crisis, invest in frontline services, and tackle the climate emergency. The Budget is focussed on three priority missions being those within communities, equalities and opportunity.
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Detail figures supporting the Settlement to Local Government have not yet been received. Such detail is normally provided at this stage and includes individual revenue and capital allocations to the Council. Officers are therefore unable to provide detailed Council analysis and implications at this time. Previous indications were that this would have been made available on the evening of the 19 December however this remains outstanding at the time of writing.
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The Draft Budget provides information relevant to the Council’s finances for the forthcoming year with the following confirmations now being provided;
- a Council Tax Freeze being supported at a 5% rise,
- an additional £6m to support the expansion of free school meals
- an additional £11.5m for the uprating of free personal & nursing care rates,
- an additional £230m to deliver a £12/hr minimum pay settlement for adult social care workers, in commissioned services via contractual uplifts
- an additional £6.8m for discretionary housing payments, and
- £145.5m to continue to maintain teachers and support staff as well as £242m to support teacher pay uplifts
- Whilst providing some certainty these confirmations differed from those assumptions applied within the Strategic Planning & Performance Update to Council on the 14 December (EDC/022/23/AD). As a consequence the financial gap will require to be refined. This will be completed in the New Year and included in the Council’s Budget Papers in February.
- To support this work COSLA have provided a high-level analysis of the Draft Budget. This is attached at Appendix 1. Theis highlights that, at a Local Government level as a whole, there appears to be a revenue shortfall of £251m split between £95m within revenue budgets and £156m within Council Tax. Furthermore, the Capital Settlement also reflects a shortfall of £99.5m.
- There remains a significant risk that there will be reductions to the Local Government settlement in both real and cash-terms and this will be reflected at a Council level. Under such circumstances the financial gap will increase from that reported previously with the scale and scope of the challenges increasing as a result.
- The Council continues to engage with the Scottish Government through COSLA to understand, analyse and check the settlement. A number of clarifications are also being sought on risks identified in the settlement that may continue to expose the Council to risk including; distribution, teachers’ pensions, the capital accounting review, the floor mechanism, funding within other portfolios, housing and the Health and Social Care Partnership.
- Subsequent key dates are as follows:
- 21st December – draft Local Government Finance Circular
- 9th January – consultation period deadline for draft Circular
- 27th February – provisional date for Stage 3 of the 2024/25 Budget Bill