Current status: Answered by Ivan McKee on 17 March 2025
To ask the Scottish Government how it calculates the average per person funding for the purposes of the policy, as stated in the Scottish Public Finance Manual, that each local authority receives at least 85% of the Scottish average revenue funding per head.
The 85% funding floor is a key element of the needs-based distribution formula that is discussed and agreed with COSLA on behalf of all 32 local authorities each year.
To apply the 85% funding floor, the Scottish Government first calculates the total funding in the Local Government Finance settlement, per person, for each local authority and for Scotland as a whole. The total funding includes General Revenue Grant, Non-Domestic Rates, Specific Grants, and an Assumed Council Tax level of £911 at Band D.
Funding for all local authorities in Scotland is included in the calculation of the 85% Floor although the contribution of the three island councils and Argyll and Bute to the average calculation, is capped at 115%.
The capping adjustment has no effect on funding actually provided to those four authorities and it only applies for the purpose of calculating the average, in part to mitigate the risk that the Special Islands Needs Allowance (SINA) has a distortive impact on the calculation.
The weighted average including these adjusted figures is then calculated to obtain a new Scotland average. As the local authorities with more than 115% of the Scotland total are small, the capping adjustment does not have a significant impact on the calculated average.
If any local authorities’ per-head support is less than 85% of this adjusted average, additional funding is provided to lift that local authority up to the 85% floor.
Local Government Finance officials would be happy to meet with you to discuss the calculation in more detail, if required.