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Scottish Budget Spending Review 2007




Local government, which delivers a range of key public services, holds a unique position in the governance of Scotland and is a major contributor to our overarching Purpose of increasing sustainable economic growth. Local government will be expected to contribute to the achievement of all of the Scottish Government's Strategic Objectives and the successful delivery of the national outcomes. This includes both the core activities of local government and those that are led by local government in its important role in promoting and leading Community Planning.

In recognition of local government's vital role, the Scottish Government is seeking a new and much more productive relationship with local government, where we work in partnership to deliver agreed national outcomes and local priorities which give the best outcomes for people right across Scotland as well as the communities in which they live.

This Spending Review signals our intention to establish a new relationship, based on mutual respect and partnership.

Under the terms of this new partnership, the Scottish Government will set the direction of policy and the over-arching outcomes that the public sector in Scotland will be expected to achieve. Where local authorities and their partners, including the third sector, show they can deliver, the Scottish Government will stand back from micro-managing that delivery, thus reducing bureaucracy and freeing up local authorities and their partners to get on with the job.

As part of the new relationship, local government will be expected to contribute to the delivery of the national Strategic Objectives, outcomes, indicators and targets, and in this way to support the Scottish Government in the delivery of its overarching Purpose.

The new relationship recognises and respects the vital role local government plays in making Scotland:

Wealthier and Fairer:

through an expanding role in driving local economic development, including the Business Gateway;


through improving the learning experience and expanding and improving early years provision;


through tackling inequalities; providing support for the elderly and tailored services for families and children; and supporting healthier, more active lives;

Safer and Stronger:

through building communities, tackling crime and antisocial behaviour; and


through our shared commitment to action on climate change and waste management.

As indicated in chapter 1, we are working with local government to develop Single Outcome Agreements ( SOAs), which will be a key part of the new relationship described above. Each local authority will be invited to enter into a Single Outcome Agreement ( SOA) with the Scottish Government, which will:

  • include the contribution which the local authority will make to delivering the high level targets, the national Strategic Objectives, outcomes and indicators;
  • cover all existing outcome agreements and planned policy within the Single Outcome Agreement framework;
  • include local priorities within the national outcomes, in terms of local outcomes and indicators, and how these will be delivered; and
  • include details of how local authorities will work in partnership with their Community Planning Partners in the prioritisation and delivery of both national and local outcomes.

As a fundamental part of the SOAs and the associated performance framework, the Scottish Government expects that all local authorities will apply the greater freedoms they will have in a way that accords with the principles of Best Value. Local authorities will be held accountable to the Scottish Government for their performance against the set of national indicators and related targets, and to their local communities in respect of their performance against all indicators and targets - both national and local.


As part of its contribution to a new relationship with the Scottish Government, local government will be expected to contribute directly to the delivery of key government policies and programmes including:

  • reducing or removing business rates for small businesses;
  • freezing the council tax rates in each local authority at 2007-08 levels;
  • improving the learning experience for children and young people by improving the fabric of schools and nurseries and developing and delivering A Curriculum for Excellence;
  • reducing class sizes in P1 to P3 as quickly as possible to a maximum of 18;
  • improving early years provision with access to a teacher for every pre-school child and making substantial progress towards a 50 per cent increase in pre-school entitlement for 3 and 4 year olds;
  • legislating to extend entitlement to nutritious free school meals to all primary and secondary school pupils of families in receipt of maximum child or working tax credit in 2009 and to allow further extension of free school meals to all P1 to P3 pupils in 2010;
  • giving more school pupils opportunities to experience vocational learning;
  • improving support for children, young people and families at risk including providing allowances for kinship carers of looked after children;
  • making an additional 1,000 police officers available in our communities through increased recruitment, improved retention and redeployment;
  • improving outcomes for frail older people and family carers by investing in care home quality, increasing free personal care payments and significantly extending respite and other carer support; and
  • investing £3 billion over the period 2008-09 to 2010-11 in capital expenditure to secure investment in local government infrastructure such as schools, flood prevention measures, waste management, roads, and the Police estate and that of the Fire and Rescue Services.

In return for local government committing to deliver across these outcomes, and as part of the package being offered under this new partnership, the Scottish Government will be prepared to:

(i) work with local government to implement SOAs with each local authority;

(ii) reduce levels of ring-fencing along with the associated regulation from £2.7 billion in 2007-08 to a possible £0.9 billion in 2010-11;

(iii) bring forward recommendations from the Crerar review where improvements in performance management and self assessment will ensure a proportionate inspection regime applies to local government;

(iv) work with local government on a new performance reporting system which over time will replace the myriad of existing systems, and will provide regular, timely and transparent reporting to the Scottish Government on progress against national outcomes and indicators, and to local communities on progress against local outcomes and indicators;

(v) allow local authorities to retain their efficiency savings in full to re-deploy as they see fit; and

(vi) make available a total funding of £11.1 billion rising to £12.0 billion over the period 2008-09 to 2010-11.

In doing all of the above, there will be over-riding obligations to deliver value for money across all activities and to deliver the full range of quality services that can be reasonably expected by our citizens, wherever they live in Scotland. That will include paying distinctive attention to the needs of remote rural as well as deprived urban areas. In order to ensure these obligations are met, local government will have systems which ensure our public services are high quality, continually improving, efficient and responsive to local people's needs.

It will be the responsibility of each local authority to allocate the total resources available to it to ensure that it delivers its SOAs and, in this way, contributes to the national Strategic Objectives and Purpose. This should be achieved by each local authority taking into account the relevant outcome agreement, its statutory obligations, and its local needs and priorities.

The funding on offer, set out in table 17.01 below, as part of the overall package will enable local authorities to deliver across all their various functions including: education, social work, police, fire, civil protection, roads, waste collection and disposal, environmental health, housing, leisure and recreation, libraries, museums, burial grounds and crematoria, planning, consumer protection, registration of births, marriages and deaths, and money advice. It brings together virtually all the funding that will be provided to local government and, in previous spending documents, would have been included under different portfolio headings. Once local authorities accept the package on offer, it will be possible to provide a detailed list of the amounts of those specific grants that remain. All other grants currently paid out separately from the local government settlement would at that stage be incorporated into the settlement total. A list of those specific grant schemes that are expected to continue in 2008-09, with the prospect that the list may reduce further by 2010-11, and those that will be incorporated into the settlement total is provided in table 17.02 below.

There are some further pockets of funding that will also go to local government, in addition to those included within table 17.02 below. These include, for example, a significant contribution to the Edinburgh tram project; some funding still to be allocated for Police Grant; funding that is provided through European grants which are channelled through the Scottish Government; and some transfers from the enterprise budget in respect of the Business Gateway function and local regeneration functions following further consultation with local government and the assignment of contracts.

Table 17.01 Spending Plans 2008-11

2008-09 Draft Budget £m

2009-10 Plans £m

2010-11 Plans £m

Local Government DEL Resource and AME




Local Government Capital








Table 17.02 Specific Grant and Funding incorporated into the Settlement 2008-09




Criminal Justice Social Work

Fire Capital Grant

Health and Wellbeing

Community Regeneration Fund (1)

Community Voices Programme (on behalf of Community Planning Partnerships) (1)

Working for Families (1)

Housing Support Grant

Hostels Grant

Vacant and Derelict Land Fund

Private Sector Housing Grant

Transfer of the Management of Development Funding

Assistance to Owners affected by Glasgow Stock Transfer

Education and Lifelong Learning

Determined to Succeed

Finance and Sustainable Growth

Regional Transport Partnership Capital Grant

Cycling, Walking and Safer Routes

Rural Affairs and the Environment


First Minister




Antisocial Behaviour Funding

Community Safety Partnership

Police Capital Grant

Health and wellbeing

Mental Health

Children's Services - Women's Aid Fund

Homelessness Task Force (2)

Furniture Grant Resource (2)

Glasgow Hostels Decommissioning (2)

Private Landlord Registration

Supporting People Grant

Violence Against Women Fund

Delayed Discharge

National Accommodation for Sex Offenders

Education and lifelong learning

National Priorities Action Fund

Social Work Training

European Languages Grant

Educational Attainment for Looked After Children

Changing Childrens Services Fund

Teacher Induction Scheme

Specialist Provision Programme - Centres of Excellence

Children's Legal Representation Grant Scheme

School Estate / PPP

Early Years and Childcare Workforce Development Fund

Improving Fostering Services


Youthwork for Local Delivery

Schools Fund

Finance and sustainable growth

Demand Responsive Transport Grant

Rural Public Passenger Grant

Bus Route Development Grant

School Travel Coordinators

Efficiency and Reform Fund

Cities Growth Fund

Supported Borrowing

Efficiency Reform Fund

Piers and Harbours Grant

Public Transport Fund & Integrated Transport Fund

Rural affairs and the environment

Strategic Waste Fund

Antisocial Behaviour Noise Grant Scheme

Air Quality Monitoring

Flood Prevention & Coast Protection Grant

Contaminated Land Grant

Strategic Waste Fund

Note: Those marked (1) are to be rolled up in a new Fund deployed by Community Planning Partnerships.

Those marked (2) have been amalgamated from 2007-08 into the Tackling and Preventing Homelessness Fund.