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The Scottish Government continues to identify opportunities to remove unnecessary duplication across the public bodies landscape.

In July 2024, public bodies were asked to provide information to identify opportunities for delivering services in alternative ways and to increase efficiencies across corporate functions. A report of the findings from this commission was published on 15 November 2024, and can be found at Public Bodies Expenditure: Supplementary Report of Data Commission - gov.scot.

A key strand of the Public Service Reform (PSR) programme is to improve the efficiency and effectiveness of our public services for the people of Scotland. As part of this, we continue to engage with public bodies to progress the programme and deliver long term fiscal sustainability.

The Scottish Government is progressing the Public Sector Reform Programme to ensure public services are sustainable, efficient and effective. Our work in this area is expected to save up to £280 million over a two year period by the end of 2024-25.

We have already streamlined the public sector landscape by reducing the number of Scottish public bodies under our control from 199 in 2007 to 131 as at 1 December 2024.

Accountable Officers for all public bodies have a personal responsibility for the propriety and regularity of the finances under their stewardship and for the economic, efficient and effective use of all related resources. This includes being personally answerable to Parliament for the exercise of their functions. This is set out in the Public Finance and Accountability (Scotland) Act 2000 and the Scottish Public Finance Manual.

Public bodies are reviewed quarterly as part of the Scottish Government’s Assurance cycle to ensure they are operating efficiently and effectively.

One of the key aims of our Public Service Reform (PSR) programme is to drive efficiency and effectiveness across government and public bodies, making sure we have the public body landscape to deliver the services the people of Scotland need. As part of this, we have commissioned data on expenditure on corporate functions to identify where there is duplication and are working with public bodies to improve the efficiency and effectiveness of our services.

The Scottish Government’s policy is that any new public body should only be set up as a last resort and after consideration of all other delivery mechanisms has been exhausted. The Ministerial Control Framework ensures any Scottish Government proposal to establish a new public body is based on evidence and value for money, with approval from Cabinet before any decision is made.

Given the changes in the Scottish Government's devolved powers since devolution it is not possible to apply a direct like with like comparison in Scottish Government funding levels between 1999-00 and 2025-26. Similarly, the powers and responsibilities of Local Government have changed over that time, most notably due to the devolution of around £5.6 billion for the administration of social security benefits, as well as the transfer of Police and Fire services out of Local Government in financial year 2013-14 which resulted in over a £1 billion adjustment to General Revenue Grant.

The total number of public bodies from 1999 until the present day has been captured in the following table.

Please note that prior to 2010 it was not common practice to capture Executive Agencies, Non-Ministerial Departments, Other Significant National Bodies, or Parliamentary Commissioners & Ombudsmen as part of the list of public bodies. Data prior to 2010 is limited to Executive Non-Departmental Public Bodies (NDPBs), Advisory NDPBs, Tribunal NDBs, Health Bodies, Nationalised Industries (no longer used) and Public Corporations. The exception to this was in 2007 when a more extensive collation of public bodies was completed as part of a Simplification Programme. This included all of the aforementioned classifications of public bodies as well as 7 proposed public bodies yet to be established. The inclusion of proposed public bodies yet to be established to the total is unique to 2007.

More frequent and meaningful budget engagement with COSLA and Councils was fundamental to informing the record funding settlement made available to Local Government in the Scottish Budget 2025-26.

That engagement included consideration of financial viability, the importance of sustainable local services and the critical need for transformation.

The Local Government Settlement was significantly more generous than Councils were expecting based upon the trajectories set out in previous Medium Term Financial Strategies. Despite this, all local authorities, along with the rest of the public sector, are facing difficult decisions as part of their budget setting processes including on how to meet the increased costs of employer National Insurance Contributions following the UK Budget in November 2024.

Whilst no specific concerns over financial viability in 2025-26 or 2026-27 have been raised since the Scottish Budget was published, Scottish Ministers remain committed to deepening and broadening budget engagement to ensure the sustainability of local services in the long term.

The Plan for Steel hasn’t been published yet so the Scottish Government has not made an assessment of reported plans for the UK Government to support Scotland’s steel sector. An assessment of confirmed UK Government plans and support will be made following the publication of The Plan for Steel. The Scottish Government will be contributing to the steel strategy consultation; and we will continue to represent the sector, including via my membership on the UK Steel Council.

In addition to the Scottish Government’s previously announced Grangemouth Just Transition Fund, which will support the transition of the industrial cluster in its entirety to help secure a long-term and sustainable future, the Scottish Government has announced £25 million targeted investment for the vitally important Scottish industrial site.

While ring-fenced funding is provided to support increased investment in services such as our schools, inter-island connectivity and criminal justice social work, this represents only 2.7% or £0.4 billion of the overall Local Government Settlement in 2025-26.

Comparisons prior to the historic Concordat agreement in November 2007 do not represent a like for like comparison as Local Government funding changed significantly in 2008-09 when the majority of the former ring-fenced grants provided in the previous year were baselined into to the settlement.

Whilst not directly comparable, the best available data, as published in the Local Government Finance Circular 19/1998 indicates that specific grants worth £543 million were allocated to councils in 1999-00. This was equivalent to 8.29% of ‘Total Aggregate External Finance’.

The information requested is not currently held centrally and could only be obtained at disproportionate cost.

Whilst the vast majority of funding distributed to councils through the Local Government Settlement is distributed using a needs-based formula, including factors such as population, rurality, road length and deprivation, there are a number of discrete funding lines to respond to specific local needs both within and out with the Local Government Settlement.

These include, but are not restricted to, specific funding for inter-island connectivity is currently only available to councils with island communities and specific grants are provided for Vacant and Derelict Land and Regional Transport Partnerships in specific local authorities. Such funding streams are included in the Local government finance circulars - gov.scot which will be published once the Local Government Finance (Scotland) Order is agreed by the Scottish Parliament.