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£10.3bn for Local Government

Published: 25 Feb 2016 17:15
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Funding provided to freeze the council tax for ninth year.

Scottish local authorities will receive a total funding package of £10.3 billion in 2016-17, Deputy First Minister John Swinney confirmed today (Thursday) as he said the Council Tax will be frozen for the ninth consecutive year saving around £1,550 per household.

The overall funding settlement and package of measures will enable local authorities to maintain, and increase, the pace of reform needed to improve the vital services on which the people of Scotland depend and value.

Among other measures, the 2016-17 funding package will:

  • Protect the Council Tax freeze for a ninth year, fully funded by £70 million additional investment from the Scottish Government, saving the average band D household around £1,550 since 2007-08
  • Invest £250 million in integrating health and social care services, representing the most significant reform since the establishment of the NHS in Scotland
  • Maintain the pupil/teacher ratio in Scotland's schools, which is a central part of our priority to raise attainment, supported by an additional investment pot of £88 million

The figures for 2016-17 include two significant additions from the provisional distributable figures issued on 16 December: almost £54 million to deliver Free School Meals to all children in Primary 1 to 3; and over £26 million for Discretionary Housing Payments, part of the full £35 million enabling councils to fully mitigate the impact of the UK Government's discredited 'bedroom tax'.

At Stage 3 of the Budget Bill, Mr Swinney confirmed the proposed adjustment to rates relief for empty industrial properties would be moderated, and the Fresh Start and New Start reliefs would be extended for 2016-17. Today Mr Swinney announced the standard poundage rate will be set at 48.4p and the large business supplement set at 2.6p for 2016-17.

The Small Business Bonus Scheme will also continue unchanged for 2016-17, benefiting around 100,000 business properties, as part of a rates relief package estimated at over £550 million for 2016-17.

The Deputy First Minister said:

"My priority has been to deliver a financial settlement that councils can accept in order that we can pursue shared priorities which will improve outcomes for local people through health and social care integration and improving educational attainment.

"Taking into account the addition of the £250 million to support the integration of health and social care, the overall reduction in funding equates to less than 1 per cent of Local Government's estimated total estimated expenditure in 2016-17.

"I welcome the agreement of Scotland's local authorities to this financial settlement which, when taken together as a package, will enable them to increase the pace of reform and improve essential public services to communities all over the country. It is a package that is firmly focused on our joint priorities to deliver sustainable economic growth, protect front-line services and support the most vulnerable in our society.

"This Government is committed to maintaining Scotland's position as the best place in the UK to do business, with a rates relief package estimated at over £550 million for 2016-17. We continue to listen to the views of business, and will shortly announce details of the review of business rates as committed to at the Draft Budget."

Notes to editors

Finance Circular No 1/2016 :