An update on the draft local government funding settlement for 2021/22 was given at today’s meeting of East Lothian Council.
Grant support from the Scottish Government provides the vast majority of East Lothian Council’s funding necessary to provide council services.
- Core Revenue Support Grant has increased by £1.230 million in cash terms relative to 2020-21 budgets (0.7% increase).
- An additional £1.948m is included in the settlement to support a Council Tax freeze, which is equivalent to just less than 3% of council tax yield. This grant will not be receivable should the council choose to increase council tax.
- An additional £1.398m of new funding has been provided to support specific policy commitments within social care and must be passed on in full to the Integration Joint Board.
- An increase of £0.08m of capital grant, taking the total capital grant to £7.587m.
- An additional increase in specific capital grant to support Cycling, Walking and Safer Streets.
Councils are being asked to deliver a number of policy commitments in relation to maintaining the national pupil teacher ratio level, ensuring places are provided for all Probationer Teachers who require one; and social care budgets.
An additional £90m national funding has been reflected within the settlement dependent upon delivery of a Council Tax freeze for 2021-22.
Additional ring-fenced funding has been confirmed in the settlement in line with previously announced funding in 2018 to support the expansion of Early Learning and Childcare entitlement.
The Scottish Government have also set out their public sector pay policy that requires as a minimum that a pay award equivalent to 3% for employees earning up to £25k and 1% to those earning up to £80k, and a limit of £800 for those earning over £80k, setting the context for any formal pay negotiations.
The report considered at today’s meeting highlights that the Council is now left with an adjusted General Services Revenue budget gap in 2021-22 of just under £4.2 million rising to just under £4.5 million by the end of 2023- 24.
The settlement details remain in draft pending their passage through the Scottish Parliamentary process, with the final Stage 3 debate expected on 9 March 2021. The next UK Budget for 2021-22 will be announced on 3 March 2021, and it is unclear whether this will change any treasury allocations already provided to Scottish Government.
East Lothian Council is expected to meet again on 2 March to consider the General Services budget and the setting of Council Tax.
2020/21 Quarter 3 Financial Review
Meanwhile, a separate report was presented to Council which notes the in-year financial performance, as of December 2020.
It is acknowledged that the Council continues to operate within an extremely challenging financial environment including the impact arising from COVID-19 with a second national lockdown currently in force.
The General Service Revenue financial position at the end of December 2020 was an overspend of £163,000 (0.7%).
The report notes that officers continue to progress a range of mitigation measures to manage the financial position for the remainder of the current financial year. The majority of planned efficiencies, the report adds, are expected to be delivered.
Despite increased costs relating to COVID-19 currently sitting at over £16 million expenditure, officers remain hopeful the combined range of mitigation options including Scottish Government support and flexibilities currently being managed will allow expenditure commitments to be delivered within available budgetary limits.