Hansard

The motion on the Local Government Finance (Scotland) Order 2024 seeks Parliament’s approval for the guaranteed allocations of revenue funding to individual local authorities for 2024-25. It also seeks agreement on the allocation of additional funding for 2023-24, which has been identified since the Local Government Finance (Scotland) Order 2023 was approved on 1 March last year.

We cannot ignore the hugely challenging circumstances in which we have had to agree the Scottish budget this year. Our block grant funding for the budget is derived from the United Kingdom Government’s spending decisions and has fallen by 1.2 per cent in real terms since 2022-23. That is a real-terms drop of £500 million. Our capital spending power is due to contract by almost 10 per cent in real terms over the next five years.

The reality is that the amount that Scotland has available to spend is still largely driven by the block grant that has been set by successive UK Governments, whose constraint of public expenditure has prolonged the austerity that public services feel. Scotland and the rest of the UK require more money for infrastructure, public services and fair pay deals.

The UK Government did not deliver for Scotland in the autumn statement, and we have no advance information on what lies ahead with the spring statement on 6 March. However, we will always do our best with the powers that we have, and the 2024-25 Scottish budget is built on our values. In tough times, it sets out to protect people, sustain services and take pragmatic steps to address the climate emergency.

The Scottish Government is providing more than £14 billion in the 2024-25 local government finance settlement. The revenue funding of almost £13.4 billion includes £147 million of funding for councils that have chosen to freeze council tax in 2024-25. We are also providing almost £700 million of support for capital expenditure. Including the funding to freeze council tax, we are increasing the resources available next year by more than £574.6 million. The 2024-25 local government finance settlement provides an additional 4.3 per cent in funding, or a real-terms increase of 2.5 per cent, compared with 2023-24.

In addition, as outlined yesterday, the Deputy First Minister has confirmed her intention to pass on up to £62.7 million of Barnett consequentials following the UK Government’s spring budget, as a result of the recent announcement on ring-fenced adult social care funding in England. That funding will be available to councils to protect their households by freezing council tax, and local authorities will have full autonomy to allocate the additional funding based on local needs and priorities, without the need to produce productivity plans, as is required in England.

The Deputy First Minister confirmed her intention to pass on any consequentials that are associated with increased teacher pension employer contributions and to prioritise the £4 million increase in the islands cost of living fund in direct response to concerns that some island authorities have raised about the cost of living and delivering services in island communities.

The budget invests in the Verity house agreement by baselining almost £1 billion of funding across health, education, justice, net zero and social justice, prior to agreement on an assurance and accountability framework.