Local government finance circular 7/2024: Loans Fund accounting guidance

Letter to Local Government Directors of Finance setting out the purpose of the statutory guidance

Directorate for Local Government and Communities

Local Government and Analytical Services Division Area 3G, Victoria Quay, Edinburgh, EH6 6QQ

T: 0131 244 1896

E: elanor.davies2@gov.scot

Local Government Finance Circular No 7/2024

(Replaces Local Government Finance Circular 7/2016)

By email

To: Directors of Finance of Scottish local authorities

Audit Scotland, COSLA, CIPFA

Our ref: A42082883

10 June 2024

Dear Director of Finance,

Local Government Finance Circular 7/2024: Loans Fund Accounting

The Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016 (the 2016 Regulations), which replaced the statutory provisions for local authority borrowing, lending and loans funds, as set out in Schedule 3 of the Local Authority (Scotland) Act 1975, came into force on 1 April 2016. The 2016 Regulations have since been amended, most recently by the Local Authority (Capital Finance and Accounting) (Scotland) Amendment Regulations 2024 (the 2024 Amendment Regulations). The 2024 Amendment Regulations will come into force on 1 April 2024.

This circular replaces circular 7/2016 and provides updated guidance on proper accounting practice as it relates to the statutory loans fund and prudent financial management as it relates to the repayment of loans fund advances.

This circular is also available from the Scottish Government website at:

https://www.gov.scot/policies/local-government/local-government-accounting/

If you have any questions, please do not hesitate to contact me.

Yours faithfully,

Elanor Davies

Head of Local Authority Accounting

Local Government Finance and Analytical Services Division