Local Government in Scotland Finance

Lesson Focus Describing: Sources of funding for local councils in Scotland. Identifying: - What the organisation COSLA is.

Where does the money for services come from? The services that local councils provide are very expensive! In order to provide both mandatory and discretionary services, councils receive and raise money in several different ways.

Funding Every council in Scotland receives most of it’s funding from the Scottish Government. The main grant is called Aggregate External Finance but is often simply called the “Government Grant”. East Ayrshire - £222.828 million in 2016/17 Clackmannanshire £93.608 million Edinburgh City - £717.466 million

COSLA COSLA – Convention of Scottish Local Authorities Local authorities across Scotland do not receive the same amount of money from the Government Grant. COSLA negotiates with the Scottish Government on behalf of the councils to determine how much money each receives.

Funding Council Tax Local Councils also raise their own money to pay for services through charging residents council tax. How much council tax you pay is based on the value of your house – not how much you earn. Although this is the most obvious form of funding for local councils it only makes up about 12% - 18% of local authority income depending in the individual council.

Council Charges Each council across Scotland will also collect an annual payment for water and sewerage works, which is usually paid at the same time as council tax.

Different councils will charge slightly different amounts. Aberdeen City residents currently pay the most Council Tax in the country. Band A is set at £820.26 Western Isles residents currently have the lowest payments with Band A set at £682.67 Glasgow City – Council Tax bands 2016/17

Funding Other forms of funding include Facilities Charges Council housing rent Business rent and charges

Funding - PPP Renfrewshire Council’s PPP projects were completed in 2008; including six primary and four secondary schools, two community nurseries and a community learning centre. The council will pay a bill of £135 million over the next 30 years to BAM. PPP stands for Public-Private Partnership This is when a local council enters into a partnership with a private company to build a new facility (such as a school). This form of funding is often unpopular with the public and other organisations such as trade unions as councils have to pay back the company at extremely high rates and over long periods of time.

Funding Cuts In recent years local councils across Scotland have been forced to cut the amount and type of services they provide due to cuts in the Government Grant. This has led to many councils cutting the number of staff they employ and putting the cost of certain charges up for their residents.

Council Funding Questions Using your notes and the sources provided, answer the following questions on Local Council Funding. Why is it wrong to describe council services as ‘free of charge’? What percentage of local government funding comes from central government? Describe why some people pay more Council Tax than others. What services can councils charge local people to use? Can you give your own examples? Which service receives the most money and can you suggest a reason for this? 6. What is a public–private partnership (PPP)? 7. Provide one argument for and one argument against the use of PPPs by local councils.