The Funding of Local Government in Scotland, 2024-2025

Overview of the calculation of funding for local government, 2024-25.


How are Capital Projects funded?

All of the funding referred to so far has been for day-to-day running costs, called ‘revenue spend’. In addition to that, councils also spend on longer-term capital projects, such as flood defences, town centre renewal, and road building.

In the past this was funded by borrowing, with the Scottish Government providing a grant to fund interest and repayments. But now the Scottish Government provides a Capital Grant to fund capital projects.

The Capital Grant is also distributed by means of a funding formula, based largely on population and road-length. Some funding is ring-fenced for specific projects such as flood defence. 

Capital funding cannot be used on day-to-day running costs, but councils can use some of their revenue funding to pay for capital projects.

The total Capital Grant provided for 2024-25 was £613 million.

Summary of the different indicators used in the formulae

Pie chart showing the proportions distributed on different indictors; population 34%, road length 8%, SG allocation 23%, rolled forward 13%, fixed amount 4%, other 18%.

Contact

Email: gaestatistics@gov.scot 

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