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FUNDING SETTLEMENT FOR SCOTTISH LOCAL AUTHORITIES ANNOUNCED

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The finance and public services minister Andy Kerr today announced the three-year funding settlement for all Scotti...
The finance and public services minister Andy Kerr today announced the three-year funding settlement for all Scottish local authorities.

Over the next three years, local authorities in Scotland will receive:

£7.4bn in 2003-04 ??? an increase of 8.5 per cent

£7.7bn in 2004-05 ??? an increase of 4.8 per cent

£8.1bn in 2005-06 ??? an increase of 3.9 per cent

This includes an additional£180m for local initiatives to improve the quality of life in communities. Councils will also have additional flexibility to significantly increase capital investment in local infrastructure, including roads and schools.

This funding builds on the introduction of important reforms to strengthen the framework for improving services, while giving councils more freedom and flexibility to deliver for the people they serve.

Mr Kerr said:

'Our priority is the improved delivery of public services ??? that is what the people of Scotland expect and deserve.

'Local authorities have a crucial role to play in delivering public services. That is why we are introducing important reforms that will strengthen the role of councils and give them more freedom and flexibility to deliver for their communities.

'I have already announced an additional£1.4bn for local authorities over the next three years to help maintain existing core services and deliver key priority improvements.

'Today I am announcing each council's share of these resources. This funding will enable our partners in local government to drive forward real and sustainable improvements.

'The settlement is challenging but fair. It is based on a pre-agreed formula and will allow councils to deliver the level of services people expect.

'I recognise the pressures facing local authorities which ??? just like the Executive ??? have to make tough choices.

'People do not want to hear us talking about these pressures ??? they want us to make things bett er and improve the delivery of public services.

'This announcement does not mean any council is awash with money. It does mean, however, that councils will have the resources they need to deliver the improvements we are committed to providing ??? without the need to raise council tax above previously-announced figures. That is exactly what every council taxpayer expects.'

The minister added:

'The allocations to individual councils include their shares of£180 million over the next three years for local quality of life improvements, including tackling graffiti and vandalism, improving the local environment, making our streets cleaner and safer and providing additional services for our young people. These initiatives will make a real difference in communities across Scotland.

'This settlement announcement also marks the beginning of a radical change to the framework for capital investment by local authorities. We will give councils the freedom and the incentive to increase investment in improving services.

'From 2004-2005, councils will have the power to decide for themselves how much to invest, within prudential limits. We expect councils to make prudent, hard-headed decisions about that, based on affordable long-term plans and consultation with their citizens.

'The freedoms, responsibilities and resources we are providing offer enormous potential to increase investment in local services. For example, if councils were to devote just£25m ??? 0.3 per cent of the revenue settlement ??? to support borrowing they could achieve a near 70 per cent increase in investment. Across Scotland, that would mean an extra£350m a year investment in roads, schools, transport and other local infrastructure.'

Full tables giving year-on-year allocations for each local authority in Scotland are attached below for total revenue support. Also attached is a ranked table showing grant allocations per head of population and a table showing each council's allocation f rom the quality of life funding. The quality of life funding is included within the increased revenue support.

Under the new prudential system for capital funding, from 2004-05 councils will have the power to decide how much to spend and borrow for investment in capital infrastructure, such as roads and schools. Councils' plans will be subject to scrutiny by external auditors and councils will have to demonstrate that their plans are prudent and provide value for money for local taxpayers. Table 3 attached shows an illustration of the level of additional capital investment from borrowing that each local authority could support based on its current share of revenue grant for debt servicing, if, overall, councils increased their support for the revenue costs of borrowing for capital investment by£25m each year ??? or 0.3 per cent of their total revenue spend. Alongside increases in capital grant, this would allow for a£350m ??? nearly 70 per cent ??? increase in total local authority capital investment.

Total Revenue Grant

AEF

%

AEF

%

AEF

%

2003-04

increase

2004-05

increase

2005-06

Increase

£m

£m

£m

Aberdeen City

260.187

8.03

270.595

4.00

279.795

3.40

Aberdeenshire

289.392

9.01

304.436

5.22

315.700

3.72

Angus

147.043

8.78

153.785

4.59

162.114

4.13

Argyll & Bute

148.648

8.76

157.628

6.10

162.973

3.42

Clackmannanshire

65.371

9.29

67.986

4.00

70.298

3.40

Dumfries & Galloway

215.473

9.15

227.126

5.44

236.067

3.96

Dundee City

229.140

8.09

238.213

4.00

246.234

3.40

East Ayrshire

168.239

8.36

176.195

4.73

183.247

4.00

East Dunbartonshire

132.206

9.46

139.735

5.70

145.280

3.97

East Lothian

113.606

9.84

120.086

5.70

125.302

4.34

East Renfrewshire

109.662

8.62

117.740

7.45

122.716

4.27

Edinburgh, City of

564.983

9.02

589.405

4.00

611.583

3.80

Eilean Siar

86.020

6.33

89.460

4.00

92.502

3.40

Falkirk

193.265

8.83

204.796

6.25

213.714

4.55

Fife

463.058

9.99

490.651

5.94

513.508

4.69

Glasgow City

1041.352

6.77

1082.384

4.00

1118.657

3.40

Highland

333.912

7.94

350.774

5.09

363.524

3.67

Inverclyde

129.716

8.75

134.901

4.00

140.227

3.95

Midlothian

109.507

10.29

116.015

5.60

120.706

4.15

Moray

117.690

9.10

124.939

6.21

130.146

4.20

North Ayrshire

194.505

8.60

202.589

4.16

210.806

4.06

North Lanarkshire

448.257

8.51

466.177

4.00

487.381

4.55

Orkney

49.477

7.07

51.872

4.84

53.636

3.40

Perth & Kinross

173.913

9.35

184.386

6.07

192.225

4.28

Renfrewshire

241.431

9.72

251.884

4.33

263.217

4.50

Scottish Borders

156.459

9.09

163.890

4.75

170.452

4.00

Shetland

70.581

6.65

73.404

4.00

75.900

3.40

South Ayrshire

147.458

8.71

153.353

4.00

158.834

3.58

South Lanarkshire

408.750

8.34

428.852

4.92

447.337

4.31

Stirling

120.747

8.93

127.921

6.02

133.096

4.10

West Dunbartonshire

146.915

8.42

152.788

4.00

159.069

4.11

West Lothian

206.939

9.24

221.016

6.87

230.106

4.15

Scotland

7283.902

8.51

7634.982

4.82

7936.352

3.95

Note: % increases for 2004-05 and 2005-06 exclude level playing field support for PPP projects

Revenue Grant Per Head

Revenue Grant

Revenue Grant

Revenue Grant

Council

per head

per head

per head

2003-04

2004-05

2005-06

£

£

£

Glasgow City

1799

1870

1933

Argyll & Bute

1628

1726

1785

Highland

1598

1679

1740

Dundee City

1575

1638

1693

West Dunbartonshire

1574

1637

1705

Inverclyde

1541

1603

1666

Scottish Borders

1463

1532

1594

Dumfries & Galloway

1458

1537

1597

North Ayrshire

1432

1492

1552

Stirling

1401

1484

1544

East Ayrshire

1398

1465

1523

Renfrewshire

1397

1457

1523

North Lanarkshire

1396

1451

1517

Clackmannanshire

1360

1414

1462

Angus

1357

1419

1496

Midlothian

1353

1433

1491

Moray

1353

1436

1496

South Lanarkshire

1352

1418

1480

Falkirk

1330

1410

1471

Fife

1324

1403

1468

South Ayrshire

1315

1367

1416

West Lothian

1301

1390

1447

Perth & Kinross

1289

1366

1424

Aberdeenshire

1275

1341

1391

East Lothian

1260

1332

1389

Edinburgh, City of

1258

1313

1362

Aberdeen City

1228

1277

1320

East Renfrewshire

1227

1317

1373

East Dunbartonshire

1221

1291

1342

Scottish Mainland

1417

1485

1544

Eilean Siar

3252

3382

3497

Shetland

3214

3343

3456

Orkney

2574

2699

2791

Scottish Islands

3047

3175

3283

Scotland

1438

1508

1567

Quality of Life Allocations

2003-04

2004-05

2005-06

Total

£m

£m

£m

£m

Aberdeen City

1.877

2.228

2.597

6.702

Aberdeenshire

2.112

2.549

2.970

7.632

Angus

1.067

1.274

1.484

3.826

Argyll & Bute

0.952

1.403

1.634

4.207

East Dunbartonshire

0.990

1.199

1.398

3.587

East Lothian

0.822

0.997

1.167

2.985

East Renfrewshire

0.827

1.012

1.184

3.024

Edinburgh, City of

3.987

4.772

5.577

14.337

Eilean Siar

0.431

0.504

0.580

1.515

Falkirk

1.320

1.605

1.880

4.805

Fife

3.311

4.013

4.696

12.020

Glasgow City

6.526

7.713

8.985

23.224

Highland

2.240

2.702

3.142

8.085

Inverclyde

0.866

1.033

1.200

3.099

Midlothian

0.757

0.921

1.076

2.754

Moray

0.816

0.992

1.157

2.966

North Ayrshire

1.355

1.615

1.881

4.850

North Lanarkshire

3.103

3.709

4.343

11.155

Orkney

0.296

0.356

0.412

1.063

Perth & Kinross

1.280

1.551

1.812

4.643

Renfrewshire

1.692

2.018

2.359

6.070

Scottish Borders

1.083

1.303

1.524

3.911

Shetland

0.385

0.455

0.526

1.366

South Ayrshire

1.085

1.287

1.500

3.872

South Lanarkshire

2.879

3.476

4.058

10.413

Stirling

0.840

1.021

1.195

3.057

West Dunbartonshire

1.006

1.201

1.402

3.608

West Lothian

1.453

1.785

2.089

5.326

Scotland

50.000

60.000

70.000

180.000

Potential Capital Investment from Borrowing

%

%

2002-03

2003-04

increase

2004-05

increase

Aberdeen City

9,665

10,718

11%

19,323

80%

Aberdeenshire

10,671

11,833

11%

20,120

70%

Angus

6,304

6,991

11%

10,836

55%

Argyll & Bute

12,444

13,799

11%

21,388

55%

Clackmannanshire

3,482

3,861

11%

5,985

55%

Dumfries & Galloway

10,413

11,547

11%

18,359

59%

Dundee City

8,489

9,413

11%

15,042

60%

East Ayrshire

6,360

7,053

11%

11,512

63%

East Dunbartonshire

5,776

6,405

11%

10,684

67%

East Lothian

5,529

6,131

11%

10,007

63%

East Renfrewshire

5,193

5,759

11%

8,926

55%

Edinburgh, City of

22,043

24,444

11%

48,184

97%

Eilean Siar

11,652

12,921

11%

20,028

55%

Falkirk

7,752

8,597

11%

13,956

62%

Fife

17,045

18,902

11%

30,278

60%

Glasgow City

35,863

39,769

11%

76,640

93%

Highland

20,885

23,160

11%

35,898

55%

Inverclyde

7,530

8,351

11%

12,944

55%

Midlothian

4,581

5,080

11%

8,851

74%

Moray

5,348

5,930

11%

9,192

55%

North Ayrshire

9,409

10,434

11%

16,173

55%

North Lanarkshire

15,629

17,331

11%

30,243

75%

Orkney

4,459

4,944

11%

7,663

55%

Perth & Kinross

9,141

10,137

11%

15,712

55%

Renfrewshire

9,800

10,868

11%

18,440

70%

Scottish Borders

8,455

9,376

11%

14,533

55%

Shetland

5,876

6,516

11%

10,910

67%

South Ayrshire

5,818

6,452

11%

10,619

65%

South Lanarkshire

15,971

17,710

11%

28,694

62%

Stirling

5,779

6,409

11%

10,282

60%

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