East Lothian Council

Council's Financial Prospects 2017-2020

Published Tuesday 1st November 16

Photo - Scottish pound notes

Overview of Council's financial prospects presented

An overview of East Lothian Council’s financial prospects for 2017/18, including the process for the 2017-2020 budget development, was presented to the full Council on 25 October 2016.

Elected members were advised that planning for the council budget for 2017/18 would be affected by the later than normal publication of the Scottish Government Budget and Local Government Finance Settlement, and the uncertainty of the proposed Scottish Government council tax reform proposals.

Council were also advised of the possible introduction of council tax changes affecting those in property bands E-H. Irrespective of any local tax decisions, the nationally proposed rises in council tax for these households in East Lothian is predicted to range from an additional 7.5% for Band E to 22.5% in Band H. The extra income generated from these increases though will not be allocated to East Lothian Council to use for local services but instead be allocated by the Scottish Government for use alongside their national Education Attainment Fund.

East Lothian Council Leader, Willie Innes, said:

“The council’s strong and prudent management of resources in recent years is reflected in our most recent audited accounts, which indicate the council is managing to deliver a high quality of services within increasingly restrictive budgets. We believe a responsible approach is to set our annual budgets within a rolling three-year cycle which provides some flexibility to react to demands as required. Scottish local authorities however will not know their level of grant settlement from the Scottish Government until mid-December and it appears likely that only one year figures will be confirmed which greatly reduces our ability to thoroughly plan our local priorities and demands.”

The Scottish Government’s Delivering Excellence and Equity in Scottish education: A Delivery Plan for Scotland (June 2015) stated that:

“From financial year 2017-18 the additional £100 million per annum that will be raised each year from our council tax reforms will be allocated directly to schools. The allocation will be based on the numbers of children in primary school and S1-3 in secondary school who meet the eligibility criteria for free school meals ... This new funding will reach around 95 per cent of schools in Scotland.”

The Council were also advised that in practice there would be changes in funding practice – how the funding of schools is traditionally received, which is normally through the Revenue Support Grant; and secondly that for East Lothian significantly more money would be raised locally from the change in the council tax multiplier than is likely to be received in terms of direct funding for schools. Early indications would suggest that this could be less than 50% of the actual funding generated through additional Council Tax contributions.

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