The Funding of Local Government in Scotland, 2023-2024

How were councils protected against large changes in their allocation?

After we had used the funding formula to calculate each council’s share, we compared the allocations with the previous year. Naturally some councils received a larger percentage increase than others. We then set a lower limit on the percentage change that they were allowed. The limit is called ‘the Floor’.

To do this, first we worked out the average percentage change, comparing all bar a few areas of the formula. We then set the Floor slightly below that average. It meant that in 2023-24 councils were allowed, at least, a 1.85 per cent increase in their regular funding.

Where the funding formula had given councils an increase greater than the Floor, they pay into a pool. This pool is then distributed to the other councils to bring them up to the Floor.

For 2023-24 the funding formula gave an additional £111 million to certain councils, compared to if everyone had just received the same percentage increase. Once we had applied the Floor, they kept £10 million of it.