Meeting of the Parliament 26 February 2026 [Draft]
The Local Government Finance (Scotland) Order 2026, which is before us for parliamentary approval today, means that, next year, the Scottish Government will provide local authorities with a total funding package that is worth more than £15.7 billion, delivering a real-terms increase despite the challenging circumstances that were outlined in the cabinet secretary’s opening statement.
There is also further Scottish Government support of more than £795 million outwith the local government finance settlement. That figure includes the attainment Scotland fund, the schools for the future programme, area-based schemes, regeneration programmes and city deal funds that are paid to local authorities, which bring the Scottish Government’s total investment to almost £16.5 billion.
SPICe articulated that very clearly. It said that the 2026-27 local government revenue settlement
“sees a real terms increase of … 2.9%”.
Likewise, the Accounts Commission said that the revenue funding of around £15 billion represents a real-terms increase of 3 per cent.
The Scottish Government has listened to the requests made by COSLA and others and has acknowledged that a council’s decision on tax provides important financial and administrative accountability to the local electorate. As well as accounting for local needs, we expect councils to consider the impact of council tax rises on local people and their household finances.
We heard some interesting contributions to the debate. From Ariane Burgess and Jamie Greene, we heard some considered thinking about the challenges that we face and what the future might hold in addressing them. The Government certainly recognises the fiscal constraints and will continue to work with COSLA and others to implement our public service reform strategy, focusing on a shift to prevention and integration of service delivery at a local level while driving further efficiency.
However, we heard Craig Hoy clutching at straws and calling for changes to the funding formula, which is, of course, agreed with COSLA on behalf of all 32 local authorities. The Scottish Government is always open to proposals to change the formula, but they must come through COSLA first.
Bearing in mind that the overall quantum was confirmed when the Budget (Scotland) (No 5) Bill was passed by Parliament, Opposition members should note that, as the cabinet secretary pointed out, failure to approve the order would result in Scotland’s local authorities and, as a consequence, all our local communities being deprived of additional funding in this financial year and next year. Conservative members should bear that in mind when they decide how to vote this evening.
I encourage the Parliament to unanimously support the Local Government Finance (Scotland) Order 2026.