Hansard

The purpose of today’s short debate on the Local Government Finance (Scotland) Order 2020 is to seek Parliament’s approval to update the guaranteed allocations of revenue funding to individual local authorities for 2020-21 that were originally approved by Parliament on 10 March.

Last week, the Scottish Government—recognising the challenges that were faced by businesses as a result of the Covid-19 outbreak—took immediate action by announcing a package of support worth £2.2 billion to limit the impact on Scotland’s business community. That package of measures includes 100 per cent rates relief for all retail, hospitality and leisure properties, which will result in Scotland’s local authorities collecting significantly less non-domestic rates income than they could have expected. Legislation dictates that the distributable non-domestic rates income cannot be changed after 1 April, which is why we are having to rush through the debate on the order this afternoon. Any additional funding that is provided to local government as a result of the Covid-19 outbreak will be provided separately and is not included in the order.

It is important to note that the Scottish Government will continue to guarantee each local authority the combined general revenue grant plus non-domestic rates income. In view of that, the purpose of the order is to reduce the distributable non-domestic rates income by the £972 million that is being provided by the Scottish Government to Scotland’s businesses through a corresponding increase in general revenue grant. I can also confirm that any additional loss of non-domestic rates income resulting from the adverse impact of the Covid-19 outbreak will be compensated for by the same increase in the general revenue grant and therefore at no detriment to local government.

The order seeks Parliament’s approval for the distribution and payment of the same £9.9 billion that was debated on 10 March. That £9.9 billion is a combination of general revenue grant that has been increased to £8 billion and the distributable amount of non-domestic rates income, which has now been set at £1.9 billion.

The total amount of funding that the Scottish Government will provide to local government next year remains at £11.4 billion, but the split between general revenue grant and distributable non-domestic rates income has changed considerably. The key point is that each local authority will receive exactly the same guaranteed total funding package as was approved by Parliament on 10 March.

I move,

That the Parliament agrees that the Local Government Finance (Scotland) Order 2020 [draft] be approved.