Meeting of the Parliament 26 February 2026 [Draft]
The motion for today’s debate on the Local Government Finance (Scotland) Order 2026 seeks the Parliament’s approval of the guaranteed allocations of revenue funding to individual local authorities for 2026-27. It also seeks agreement to the allocation of additional funding for 2025-26, which has been identified since the equivalent order in 2025 was approved on 27 February 2025.
For context, the average real-terms increase in the resource block grant is only 0.5 per cent per annum across the spending review period, which falls far short of what is required in the current fiscal landscape. The capital block grant reduces in real terms by 0.3 per cent by 2029-30. That is simply not enough to change the difficult fiscal position that we face, which means that tough choices on transformation and efficiencies are required to balance demands for public spending within our funding constraints.
The 2026-27 Scottish budget that the Parliament passed yesterday is a budget that delivers opportunity for Scotland by investing in families, public services and the economy while continuing to build a fairer, greener and more prosperous future.
The Scottish budget delivers record funding of £15.7 billion to councils in 2026-27, by providing revenue funding of more than £15 billion and almost £0.7 billion of support for capital expenditure. The 2026-27 local government finance settlement provides a real-terms increase compared with the position in 2025-26, as the Accounts Commission and the Scottish Parliament information centre have confirmed.
Over the longer term, the total local government finance settlement has increased by £5.4 billion, or 52 per cent, between 2016-17 and 2026-27. That is a real-terms increase of almost 10 per cent, despite UK Government austerity measures.
The outcome of the Scottish budget provides clear evidence of our commitment to the fiscal framework between the Scottish Government and local government. More frequent and meaningful budget engagement has been fundamental in making the decisions that underpin the budget, including providing full flexibility for council tax. The budget also baselined a further £773 million of funding, which takes the total funding that has been consolidated into the core general revenue grant since the Verity house agreement was signed in 2023 to almost £2.3 billion.