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The Scottish government’s Budget has promised a £1bn uplift for local authorities, taking total funding to over £15bn – representing an estimated 4.7% real terms increase when compared to the 2024/25 Budget.
The £15bn figure includes £289m to “give real-terms protection” to the general revenue grant, according to finance secretary Shona Robison.
Housing151 | March 2025 | Local authorities. Providing homes.
Additionally, no cap will be placed on how much local authorities can raise council tax, but Robison said that with “record funding, there is no reason for big increases in council tax next year”.
Another significant measure in the Budget is a £768m allocation for affordable housing.
Chartered Institute of Public Finance and Accountancy (CIPFA) chief executive Owen Mapley noted that the budget prioritised “Scotland’s most vulnerable communities, reflecting a commitment to vital public service investment”. But he said achieving sustainable public services would require “deeper structural reform to address enduring financial challenges, which are affecting all four nations of the UK”.
Mapley welcomed the end of the council tax freeze as he said local authorities would have “greater flexibility to address local needs at a local level”. But that flexibility “must be part of a broader strategy of reform to tackle systemic pressures and ensure that services are equitable and resilient for communities across Scotland”, he added.
Jonathan Carr-West, chief executive of LGIU (Local Government Information Unit) Scotland, criticised the Budget for failing to “engage with the scale” of the financial challenges facing local authorities in Scotland. The organisation recently published the results of a survey that suggested one in four councils in the country fear they won’t be able to pass a balanced budget next year.
“Local government may welcome commitments to continuing work on a fiscal framework and plans to deliver new revenue raising powers. However, they will be dismayed to see how much funding continues to be ring fenced,” he said. “There is an increase in core funding but it doesn’t cover the ever growing costs of core statutory services.”
Carr-West also called the Scottish government “too complacent” for expecting record funding levels “to mean councils do not need to put up council tax”. He said: “The truth is that even with the additional funding announced today, local authorities will still need to raise council tax and make cuts to services and will still edge closer to being unable to balance their books.”
When contacted by Room151, councils in Scotland said they did not yet know what their individual funding allocations through the distribution formula would be yet, with this information expected on 12 December.
However Richard Bell, city treasurer at Glasgow City Council, said the Budget appeared “very positive” and could “be the best we have had in quite some time” once the details are known but “won’t solve everything – we’ll still have challenges”.
Bell also suggested that a double-digit increase in council tax in Glasgow was unlikely, with any rise to be kept “reasonable, while still protecting vital services”.
David Phillips, an associate director and head of devolved and local government finance at the Institute for Fiscal Studies (IFS), noted that comparing the amount the Scottish government plans to spend on public services in 2025/26 with the plans for this year set out in its Autumn Budget Revision “suggests a significant increase of 5.3% in cash terms, or 2.9% after accounting for inflation”.
However, this excludes £1.3bn of funding that Budget documentation implies that the Scottish government still has to allocate to services this year, he said. “Accounting for this would leave day-to-day spending on public services next year essentially flat in real terms between this year and next, falling by 0.3%. Depending on how this is allocated across services, the increases next year for Health and Local Government highlighted by finance secretary Shona Robison may end up being rather smaller,” he added.
Commenting on the £768m in funding to deliver social and affordable homes in Scotland, Chartered Institute of Housing Scotland national director Callum Chomczuk said the “money is essential to tackle the housing emergency, kick start our building programme and deliver the homes we need to tackle homelessness”.
But he said the government must also “prioritise and maintain a long-term focus on housing in Scotland”. He explained: “The restoration of £200m more for affordable housing means we are still spending less in real terms than the Budget in 2023/24, which was lacking at that time. Since then, we have had 13 local authorities and the Scottish Parliament all declare housing emergencies, alongside horrifying levels of homelessness presentations and children living in temporary accommodation.
“[The Budget] must be the start of a long-term and cross-party consensus on building social and affordable housing. I hope all political parties agree to prioritise building more homes and improving housing outcomes, so everyone has a safe affordable home to live in.”
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