Meeting of the Parliament 26 February 2026 [Draft]
The order may look technical, but it goes to the heart of whether councils can keep schools open, social care running, bins collected and community facilities functioning. Independent scrutiny has been clear that, even with the £15 billion of support and higher income from council tax and charges, councils face substantial and widening budget gaps. They are increasingly relying on reserves and one-off savings that cannot be repeated. Senior local government figures question whether the current model is sustainable.
The order provides the legal authority to distribute the general revenue grant and non-domestic rates, and it reflects some welcome progress, a modest real-terms uplift, more baseline funding and slightly less rigid ring fencing. However, it does not resolve the long-term pressures or the structural weaknesses of the system.
Two principles are central for the Scottish Greens—a genuine real-terms increase in flexible core funding, not managed decline, and far greater fiscal autonomy with a wider range of locally controlled taxes and charges to empower communities and sustain climate and nature spending. We recognise positive steps such as the visitor levy and higher council tax on second and holiday homes, which raise revenue and ease housing pressures from tourism and in rural areas but, taken together, they remain a patchwork of add-ons and not the coherent and modern local tax system that Scotland requires.
The deeper problem is the heavy dependence on the central block grant. We describe councils as local government but, fiscally, they operate as delivery arms for decisions that are taken elsewhere. Our vision is for councils that raise more of their own income, shape the local economy and environmental outcomes and are clearly accountable to voters for their tax and spending choices.
That requires confronting the outdated council tax. Based on early 1990s valuations, the tax is widely recognised as being unfair. We need revaluation and a transition to a replacement that better reflects property values and, over time, land values, so that unearned gains feed back into the public services that make communities liveable.
We also need to have an honest debate about non-domestic rates. Although they are branded as a local tax, they are largely controlled nationally. If councils are to lead on a greener and more resilient economy, they must have the fiscal levers to reward low-carbon investment, deter pollution and support community enterprise.
These issues are not abstract. Decisions that are made in council chambers mean shorter library hours, reduced leisure and cultural provision, fewer youth workers and more stretched social care, yet all those services tackle inequality and underpin climate and nature action. Councils are told to transform simply to remain viable, but they cannot plan and invest properly on insecure year-to-year settlements.
The budget offers a small real-terms increase and some extra flexibility, but the warning is clear that, without structural reform, councils will remain under strain and struggle to invest in decarbonising buildings, modernising transport and reorganising and restoring our local environments. Approving the order will keep the system running for another year but will not fix it.
We will support the measures that protect the core grant, reduce unnecessary ring fencing and expand local revenue powers, but we will continue to press for deeper change, a fairer and greener replacement for council tax, genuine local control over business rates and a fiscal framework that moves Scotland closer to the European norm of empowered, largely self-financing local government.
Our constituents deserve councils that can plan beyond the next budget cycle, invest in prevention and lead on climate and nature, not institutions that are forced to manage decline. What must change is not the fabric of local services but the outdated way in which we fund them.