The Scottish Government

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LOCAL GOVERNMENT

Portfolio Responsibilities

Local government holds a unique position in the governance of Scotland. In November 2007, COSLA (on behalf of local government) and the Scottish Government signed a Concordat setting out the terms of a new relationship, based on mutual respect and partnership. The Concordat recognises the democratic role of locally elected leaders and gives local authorities across Scotland the freedom to deliver in the best way for their communities.

Under the Concordat, both sides have committed to work jointly towards agreed outcomes under a single national Purpose - to focus the Government and public services on creating a more successful country with opportunities for all Scotland to flourish, through increasing sustainable economic growth.

The new relationship is represented by a package of measures which, taken together, both sides believe will lead, over time, to significant benefits for users of local government services.

The main components of the package were:

• the total amount of funding to be made available by the Scottish Government to local authorities over the period 2008-09 to 2010-11;
• a commitment that the Scottish Government will not undertake any structural reform of local government during this period;
• the development of Single Outcome Agreements for each local authority area, supported by streamlined external scrutiny and effective performance management;
• the establishment of a new performance reporting system, called Scotland Performs, to provide regular, timely and transparent reporting on progress against the national outcomes - in addition to local reporting on progress against the related local outcomes;
• a substantial reduction in the number of ring-fenced funding streams to local authorities;
• allowing local authorities to retain all their efficiency savings to re-deploy to meet ongoing pressures; and
• agreement to work together on policy development in all areas where local government has a key interest.

Summary of Key Spending Priorities

In addition to the main components of the package, it was agreed that we and local government would each do what is required to ensure delivery of key government policies and programmes including:

• freezing council tax rates;
• making additional police officers available in communities;
• reducing or removing business rates for all small businesses in Scotland;
• improving the learning experience for children and young people by improving the fabric of schools and nurseries; developing and delivering A Curriculum for Excellence; and, as quickly as possible, reducing class sizes in P1 to P3 to a maximum of 18 and improving early years provision with access to a teacher for every pre-school child;
• expanding pre-school provision;
• subject to necessary legislation being passed, extending entitlement to free school meals to all primary and secondary pupils of families in receipt of maximum child tax credit and maximum working tax credit from August 2009;
• more vocational training;
• providing allowances to kinship carers of "looked after" children;
• improving care home quality; and
• providing carers' support amounting to 10,000 extra respite weeks per annum.

Under the Concordat, the Scottish Government sets the direction of policy and the over-arching outcomes that the public sector will be expected to achieve. But it stands back from micro-managing that delivery, so reducing bureaucracy and freeing up local authorities and their partners to get on with the job. Work is now underway looking at how best to underpin the new relationship in statute.

A lot was achieved in 2008-09 and we, together with local government, will build on that progress in 2009-10.

For example, Single Outcome Agreements have been agreed and published for every local authority. In 2009-10, these will be extended to community planning partnerships in each area. The Single Outcome Agreements are based on the agreed set of national outcomes and, under a common framework, local outcomes to take account of local priorities.

Council tax rates were frozen (or cut) in all councils in 2008-09 and funding is included in the budget to achieve the same in 2009-10.

The Small Business Bonus Scheme was introduced in 2008-09 and funding is in place to enable it to be implemented in full in 2009-10.

An oversight structure has been put in place to manage and monitor the new arrangements. As well as a number of High Level Groups, the Cabinet Secretaries for Finance and Sustainable Growth and for Education and Lifelong learning now meet the COSLA leadership every two months to monitor progress and discuss emerging issues and, in June 2008, for the first time ever, the full Scottish Cabinet met COSLA leaders. These meetings will continue into 2009-10.

Spending Plans for 2009-10 are set out below.

Table 9.01: Detailed Spending Plans (Level 3)

Notes

1. The NDR figures are estimates. Firm figures for each year will be confirmed when the poundage rates are available. Any change in the level of NDR income will not impact on the overall level of support local authorities will receive, which is confirmed. These figures exclude other AME Grants amounting to £8m in 2009-10 for central government support to local authority housing which are included within the Specific Revenue Grants total.

2. The Specific Revenue and Specific Capital Grants are included as part of each of the relevant chapters in the Draft Budget 2009-10 document but are contained here to provide a full picture of all the funding streams within the local government finance settlements. A full breakdown of all remaining ring-fenced grants is provided in Table 9.03 below.

Table 9.02: Detailed Spending Plans (Level 3 real terms) at 2008-09 prices

What the budget does

Local authorities are directly involved in, and responsible for, the delivery of frontline public services, including education, social work, police, fire, civil protection, roads, waste collection and disposal, environmental health, leisure and recreation, libraries, museums, burial grounds and crematoria, planning, consumer protection, registration of births, marriages and deaths, and money advice. These all contribute towards achieving the Scottish Government's Purpose and the five Strategic Objectives. The funding provided to local government will contribute to improving the delivery of public services, including workforce development. It also promotes local democracy.

We will continue to take forward an efficiency programme with local government as with all other areas of the public sector across Scotland, in order to help deliver improved frontline services for everyone working and living in Scotland. We will also ensure that local government makes arrangements to provide Best Value in the effective management and delivery of services.

In 2009-10, the total package of resource and capital funding of £11,634.1m will be focused on contributing to delivering the Scottish Government's Purpose and five Strategic Objectives, and in particular progress towards the outcomes and objectives set out previously and the priorities set out in the Single Outcome Agreements. This package consists of:

• a general capital grant which is provided to Scotland's local authorities as a block grant;

• a general revenue grant which is provided to Scotland's local authorities as a block grant;
• the specific revenue and capital grants that will continue (see Table 9.03); and
• non domestic rate income, collected by local authorities, paid into a central pool and redistributed to each local authority in proportion to its population.

The Scottish Government guarantees the combined general Revenue Grant/Non Domestic Rate Income figure, approved by Parliament, to each local authority. A drop in Non Domestic Rate Income is compensated for by an increase in General Revenue Grant and vice versa.

Budget changes

The main changes to the budget plans for 2009-10 from the Scottish Budget Spending Review 2007 in respect of local government funding are as follows: £40m extra for Free Personal Care; £2.6m for Community Regeneration Loans Charges; £1.3m for the Strategic Waste Fund; an £8.7m increase in the Fairer Scotland Fund specific grant; and a £1m increase in the Gaelic specific grant.

Table 9.03: Specific Grant Funding in 2008-11

Local Government's Spending Plans 2008-09

For information purposes only, Scotland's local authorities have budgeted to spend the total resources available to them from the Scottish Government's funding and income raised locally through the council tax on services as set out in Table 9.04.

Table 9.04: Local Government Revenue Expenditure plans 2008-09

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