Scottish Local Government Finance Statistics (SLGFS) 2019-20

2. Revenue Expenditure and Income

Revenue expenditure is the cost of delivering services each year and includes both service operating costs and overheads. These costs might include salaries, rent, building maintenance, supplies and services. The benefits from revenue expenditure are mainly received within the financial year.

Any additional expenditure incurred by services in relation to the Covid-19 pandemic will also be included within their revenue expenditure figures. As this publication only covers expenditure to 31 March 2020, the amount of additional Covid-19 expenditure included is not significant (relating to less than 0.05 per cent of gross service expenditure) and so is not discussed in further detail.

Revenue expenditure also includes costs that cannot be directly attributed to a service, such as the repayment of debt and where a local authority has used revenue resources to fund capital investment (Chapter 2.2).

All local authorities are required to have a General Fund which is used to account for all revenue activity, except that relating to local authority housing. The General Fund is the principle revenue reserve of the local authority.

Where a council has housing stock, it is required to record expenditure and income relating to the direct provision of housing in their Housing Revenue Account (HRA). HRAs are generally self-financing, that is the income received is sufficient to cover expenditure incurred. Of the 32 councils, 26 have an HRA.

The Orkney County Council Act 1974 and the Zetland County Council Act 1974 require Orkney and Shetland to also hold a Harbour Account, a separate account and reserve fund specifically for harbour undertakings. Orkney and Shetland are also able to transfer money between their General Fund and their Harbour Accounts. For the purposes of this publication, expenditure and income relating to Harbour Accounts is included in General Fund figures unless otherwise stated.

Revenue expenditure is principally funded through service income (Chapter 2.1.4) and general funding (Chapter 2.3). Any deficit (+) in a local authority's revenue account is met from their reserves, and any surplus (-) is added to a local authority's reserves and carried forward to the next year (Chapter 2.4).

2.1 Expenditure and Income on Services

Net Revenue Expenditure, also known as the net cost of services, is the element of service expenditure that is funded by general funding or reserves. It is calculated as gross service expenditure minus gross service income. As shown in Table 2.1, the net revenue expenditure on local authority services, including HRA, was £11,077 million in 2019-20, an increase of 8.1 per cent, or £827 million, from 2018-19.

Table 2.1: Net Revenue Expenditure on Services in 2019-20, £ millions

	General Fund 1	HRA	Total
Gross Service Expenditure	19,355	753	20,108
Gross Service Income	7,751	1,280	9,031
Net Revenue Expenditure	11,604	-527	11,077

Source: LFR 00

Notes

¹ General Fund figures include amounts relating to Harbour Accounts for Orkney and Shetland.

2.1.1 Net Revenue Expenditure by Service

Chart 2.1 shows net revenue expenditure on services in Scotland in 2019-20. Education has the highest net revenue expenditure at £5,327 million followed by Social Work which has a net revenue expenditure of £3,461 million.

Source: LFR 00

Notes

'Roads & Transport' includes Road Bridges

Table 2.2 shows how net revenue expenditure by service has changed between 2015-16 and 2019-20.

Table 2.2: Net Revenue Expenditure from 2015-16 to 2019-20 by Service, £ millions

	2015-16	2016-17	2017-18	2018-19	2019-20	% change between 2018-19 & 2019-20
Education	4,735	4,828	4,839	5,054	5,327	5.4%
Culture & Related Services	598	576	560	575	554	-3.7%
Social Work	3,178	3,207	3,198	3,312	3,461	4.5%
Roads & Transport 1	422	399	432	384	383	-0.2%
Environmental Services	684	679	688	678	684	1.0%
Planning & Development	243	234	213	206	188	-8.6%
Central Services	464	389	448	346	783	126.6%
Non-HRA Housing	288	231	258	254	261	2.7%
Trading Services	-17	-27	-30	-35	-37	-6.5%
General Fund Net Revenue Expenditure	10,595	10,517	10,605	10,774	11,604	7.7%
HRA	-491	-504	-517	-524	-527	-0.6%
Total GF & HRA Net Revenue Expenditure	10,104	10,012	10,088	10,250	11,077	8.1%

Source: LFR 00

Notes

¹ Including Road Bridges.

Net revenue expenditure on Education has increased by 5.4 per cent, or £273 million, in 2019-20. In particular, expenditure on staffing costs within Education has increased significantly in 2019-20 which reflects the teacher pay deal agreed in 2019-20, and may also reflect an increase in staff numbers as part of the continued expansion of Early Learning Childcare provision.

Culture and Related Services saw a decrease of 3.7 per cent, or £21 million, in net revenue expenditure in 2019-20. This decrease predominantly relates to expenditure for the Euro Championships which was incurred in 2018-19, but not in 2019-20.

Net revenue expenditure on Social Work increased by 4.5 per cent, or £149 million, in 2019-20. Whilst both the cost of providing Social Work services and the income received from these services have increased at a similar rate compared to 2018-19, the value of the increase in expenditure incurred is larger than that for income received, leading to an overall increase in net revenue expenditure.

Net revenue expenditure on Roads & Transport has remained broadly consistent between 2018-19 and 2019-20, with a decrease of only 0.2 per cent, or £1 million.

This service area has fluctuated over the five year period shown in Table 2.2. Some of this variation will relate to weather conditions in each particular year, with worse weather requiring increased expenditure on maintenance in year.

Environmental Services and Non-HRA Housing have shown small increases in net revenue expenditure from 2018-19, 1.0 per cent (£7 million) and 2.7 per cent (£7 million) respectively.

Planning and Development saw a decrease of 8.6 per cent, or £18 million, in net revenue expenditure in 2019-20. This decrease is caused by income received for this service increasing by more than the expenditure incurred to provide the service.

Net revenue expenditure on Central Services has increased by 126.6 per cent, or £437 million, between 2018-19 and 2019-20. This significant increase relates to an equal pay settlement made by Glasgow City Council in 2019-20.

HRA and Trading Services both have negative net revenue expenditure, which means that the service income received for these services was more than the expenditure incurred to provide these services. As such, negative net revenue expenditure can be considered as net income. Over the last five years, net revenue expenditure for these services has steadily decreased – that is the overall net income that local authorities have received from these services has increased.

2.1.2 General Fund Net Revenue Expenditure by Council

Chart 2.2 shows net revenue expenditure on General Fund services per person by council. On average, councils' in Scotland spent £2,121 per person in 2019-20, an increase from £1,980 per person in 2018-19. This varied across councils, from £1,632 per person in Edinburgh to £3,951 per person in Shetland.

Source: LFR 00, Mid-Year Population Estimates

Notes

¹ General Fund figures include amounts relating to Harbour Accounts for Orkney and Shetland.

2.1.3 Gross Service Expenditure

Gross Service Expenditure is the total expenditure on local authority services within a financial year, adjusted for any intra / inter-authority transfers. In 2019-20, gross service expenditure was £20,108 million, an increase of 6.6 per cent, or £1,243 million, from 2018-19. Table 2.3 shows gross service expenditure by type of expenditure from 2015-16 to 2019-20.

Table 2.3: Gross Service Expenditure from 2015-16 to 2019-20 by Expenditure Type, £ millions

	2015-16	2016-17	2017-18	2018-19	2019-20	% change between 2018-19 & 2019-20
Employee Costs	6,283	6,713	6,864	7,196	8,259	14.8%
Operating Costs	6,720	6,828	7,090	7,467	7,552	1.1%
Transfer Payments	2,410	4,394	4,378	4,743	4,786	0.9%
Support Services	867	824	743	735	738	0.5%
Adjustment for Intra / Inter Authority Transfers	-617	-994	-1,005	-1,275	-1,227	-3.8%
Gross Service Expenditure	15,663	17,765	18,070	18,866	20,108	6.6%

Source: LFR 00

In 2019-20, employee costs were the largest element of gross service expenditure, accounting for £8,259 million. These costs relate to salaries and wages, national insurance and superannuation contributions, cash allowances paid to employees, redundancy and severance payments and any other costs relating to employees. Employee costs have increased by 14.8 per cent, or £1,063 million, from 2018-19, and by 31.5 per cent, or £1,976 million, over the last five years.

Operating costs was the second largest expenditure type in 2019-20, accounting for £7,552 million, an increase of 1.1 per cent, or £85 million, from 2018-19. This expenditure includes property costs, supplies and services costs, transport and plan costs, payments to agencies and other bodies and direct administration costs.

Transfer payments accounted for £4,786 million of gross service expenditure in 2019-20, an increase of 0.9 per cent, or £43 million, from 2018-19. This expenditure relates to payments made to individuals for which no goods or services are received in return by the local authority, such as payment of Housing Benefit. This figure also includes amounts that councils have transferred to IJBs – the significant increase in transfer payments between 2015-16 and 2016-17 reflects when payments to IJBs were first included in the LFRs following the introduction of IJBs.

Support services costs are the smallest component of gross service expenditure, accounting for only £738 million. This is consistent with expenditure on support services in 2018-19 which accounted for £735 million. These are costs that are paid for services that support the provision of services to the public, such as IT, Human Resources, Legal services, Procurement services and Corporate services.

An adjustment for intra / inter-authority transfers of -£1,227 million has been made to the aggregate gross service expenditure figure. This is to prevent double counting of expenditure caused by transfers between different services within an authority and between different local authorities. The adjustment removes the total recharge income from other services, contributions from other local authorities' and requisition income for VJBs or RTPs. Following the adjustment, expenditure is only reported against the authority or service area that commissioned the service.

Chart 2.3 shows the breakdown of gross service expenditure by service and by expenditure type. Education has a higher proportion of employee costs than other services – this is due to the higher number of staff employed within Education, in particular teachers. Social Work and Non-HRA Housing have high proportions of transfer payments which relates to amounts transferred to IJBs and the payment of Housing Benefits respectively. Other has the largest adjustment for intra / inter authority transfers which is due to Central Services and Trading Services having particularly high amounts of recharge income from other services.

Source: LFR 00

Notes

'Roads & Transport' includes Road Bridges.

'Other' consists of Planning & Development Services, Central Services and Trading Services.

2.1.4 Gross Service Income

Gross Service Income is the total income a local authority receives directly in relation to services they provide. In 2019-20, local authorities received £9,031 million in service income, an increase of 4.8 per cent, or £416 million, from 2018-19.

Local authorities receive service income from a variety of sources. Table 2.4 shows gross service income by type of income from 2015-16 to 2019-20.

Table 2.4: Gross Service Income from 2015-16 to 2019-20 by Income Type, £ millions

	2015-16	2016-17	2017-18	2018-19	2019-20	% change between 2018-19 & 2019-20
Government Grants (excluding GRG)	2,036	2,138	2,206	2,380	2,559	7.5%
Other Grants, Reimbursements and Contributions	1,101	3,077	3,240	3,638	3,790	4.2%
Customer and Client Receipts 1	2,423	2,537	2,537	2,598	2,683	3.3%
Gross Service Income	5,559	7,752	7,982	8,616	9,031	4.8%

Source: LFR 00

Notes

¹ Customer and Client Receipts from 2015-16 to 2019-20 broken down by service is available in Table 2.4a in the 'SLGFS 2019-20 - Publication Tables' Excel file.

Government grants, excluding General Revenue Grant (GRG), accounts for £2,559 million, an increase of 7.5 per cent, or £179 million, from 2018-19. Unlike GRG, these government grants are provided to support specific services, such as Ring-Fenced Revenue Grants (RFRGs) and grants from the DWP for Housing Benefit payments. Government grants have increased steadily over the last five years, with an overall increase of 25.7 per cent, or £523 million, since 2015-16.

Other grants, reimbursements and contributions accounted for £3,790 million of local authorities' service income in 2019-20 – an increase of 4.2 per cent, or £152 million, from 2018-19. This income type includes payments that councils receive from IJBs to support provision of social care services – the significant increase in this type of service income between 2015-16 and 2016-17 reflects the introduction of IJBs and when councils started to receive these payments.

Customer and client receipts is income local authorities have received for sales, rents, fees and charges for services they provide. In 2019-20, this accounted for £2,683 million of service income, an increase of 3.3 per cent, or £85 million, from 2018-19. Customer and client receipts have increased steadily between 2015-16 and 2019-20, with an overall increase of 10.7 per cent, or £260 million, over this period.

Chart 2.4 shows the breakdown of gross service income by service and income type. Social Work has the largest amount of service income, the majority of which is from other grants, reimbursements and contributions. This relates to amounts received from IJBs to commission social care services, as well as contributions received from NHS Boards.

Both Non-HRA Housing and Education have high proportions of service income from government grants. For Non-HRA Housing, this relates to grants from the DWP to fund Housing Benefit payments. For Education, this amount reflects various Education RFRGs that local authorities received from Scottish Government.

Service income for the HRA is almost entirely made up of customer and client receipts which will relate to rent payments received for local authority housing.

Source: LFR 00

Notes

'Roads & Transport' includes Road Bridges

'Other' consists of Planning & Development Services, Central Services and Trading Services

In 2019-20, 42.1 per cent of service expenditure was met by service income. Chart 2.5 shows the proportion of service expenditure met by service income for each service. This varies significantly between services as they each receive different levels of grants and contributions, and services have differing abilities to generate service income in the form of customer and client receipts.

Service income exceeded service expenditure for the HRA and Trading Services, generating surplus income for both services.

Service income was less than service expenditure for all other services, with the amount of service expenditure being funded by service income ranging from 11.7 per cent for Education to 87.7 per cent for Non-HRA Housing.

Source: LFR 00

Notes

'Roads & Transport' includes Road Bridges

2.2 Other Expenditure and Income

Local authorities will also incur some revenue expenditure and income that is not attributable to specific services, such as interest paid or received, statutory repayment of debts, contributions to capital expenditure, proceeds of trading operations and any other operating expenditure.

In 2019-20, local authorities incurred £1,666 million of other expenditure and income. Table 2.5 provides a breakdown of this figure, split by the General Fund and HRA. Interest paid and repayment of debts made up the majority of other expenditure, accounting for £860 million and £624 million respectively.

Table 2.5: Other Expenditure and Income ¹ in 2019-20, £ millions

	General Fund 2	HRA	Total
Interest Payable and Similar Charges	712	148	860
Interest Receivable and Similar Income 3	-110	4	-106
Statutory Repayment of Debt	494	131	624
Capital Expenditure Funded from Revenue	84	231	315
Surplus (-) or Deficit (+) from Trading Operations	-10	-	-10
Other Operating Expenditure	-16	0	-16
Total Other Expenditure and Income	1,153	513	1,666

Source: LFR A0

Notes

¹ Income figures are presented as negatives in this table to distinguish them from expenditure figures.

² General Fund figures include amounts relating to Harbour Accounts for Orkney and Shetland.

³ This includes losses arising from derecognition of financial assets and recognition of credit losses on financial assets.

2.3 General Funding

General funding principally consists of the General Revenue Grant (GRG) and local taxation, specifically Non-Domestic Rates (NDR) and Council Tax. Within local authorities' accounts, this income is referred to as 'taxation and non-specific grant income'. Total general funding available to authorities in 2019-20 was £12,323 million, an increase of 3.5 per cent, or £413 million, from 2018-19. Chart 2.6 shows the total general funding available to local authorities in 2019-20 by type of funding.

Source: LFR A0

Notes

'Other Funding' includes government grants paid to joint boards and income received through NDR TIF and BRIS schemes.

GRG is grant paid to local authorities by the Scottish Government and includes monies from the UK Government payable to a local authority. This is the main source of funding for local authorities, accounting for £6,937 million, or 56.3 per cent, of general funding in 2019-20.

NDR and Council Tax make up £2,853 million, 23.2 per cent, and £2,493 million, 20.2 per cent, of general funding respectively. More information on Council Tax and NDR is provided in Chapters 2.3.1 and 2.3.2 respectively.

The Scottish Government guarantees the combined sum of GRG and NDR funding for local authorities in each financial year. More information on the process to determine local government funding from the Scottish Government is available in the Local Government Funding: Process Overview publications.

Table 2.6 shows the breakdown of general funding figures between 2015-16 and 2019-20. GRG has increased by 0.8 per cent, or £52 million, from 2018-19 (see Table 2.6, Note 1), but has decreased by 2.9 per cent, or £210 million, since 2015-16. NDR has increased by 8.2 per cent, or £217 million, from 2018-19, and by 2.3 per cent, or £65 million, from 2015-16. Council Tax has increased by 4.9 per cent, or £117 million, from 2018-19, and by 21.3 per cent, or £438 million, since 2015-16.

Table 2.6: General Funding from 2015-16 to 2019-20, £ millions

	2015-16	2016-17	2017-18	2018-19	2019-20	% change between 2018-19 & 2019-20
General Revenue Grant 1	7,147	6,839	6,799	6,885	6,937	0.8%
NDR Distributable Amount	2,789	2,769	2,666	2,636	2,853	8.2%
Council Tax	2,055	2,091	2,278	2,376	2,493	4.9%
Other Funding 2	16	10	9	13	40	199.5%
Total General Funding	12,007	11,708	11,751	11,910	12,323	3.5%

Source: LFR A0

Notes

¹ The 2018-19 and 2019-20 GRG figures will differ to those in the corresponding Finance Circular due to the treatment of the element of 2019-20 GRG that related to £10 million for Teacher's Pay. Local authorities were advised that, although it was part of the 2019-20 Local Government Finance Settlement, they should accrue this element of GRG in their 2018-19 accounts. This amount is therefore included in the 2018-19 GRG figures within the LFRs and SLGFS, rather than the 2019-20 GRG figure.

² Includes government grants paid to VJBs / RTPs and income from NDR TIF & BRIS schemes.

2.3.1 Council Tax

Council Tax was introduced in Scotland on the 1 April 1993 to replace the Community Charge. It is a tax system based on dwellings and is a component of general funding for local authorities.

There are three factors that determine the amount of Council Tax that a dwelling is liable for:

1. The market value of the dwelling as at the 1 April 1991. Each dwelling is placed into one of eight bands from A to H, with Band A dwellings liable for the lowest rates of Council Tax and Band H attracting the highest.

2. The Band D rate which is set by the local authority, with other bands calculated as a ratio to Band D. The ratios determining the charges for properties in bands E to H were revised in 2017-18.

3. A range of exemptions, discounts and reductions and increases that are available in certain circumstances, or in some cases an increase in Council Tax due to the application of a levy.

The valuation range and ratio for each Council Tax band is given in Table 2.7.

Table 2.7: Valuation Range and Ratios by Council Tax Band

	Valuation Band Ranges as at 1st April 1991	Ratio to Band D 1	No. of Chargeable Dwellings as at September 2019	Proportion of Chargeable dwellings
Band A	Under £27,000	6/9	500,127	20.0%
Band B	£27,001 to £35,000	7/9	573,544	22.9%
Band C	£35,001 to £45,000	8/9	405,430	16.2%
Band D	£45,001 to £58,000	9/9	341,710	13.6%
Band E	£58,001 to £80,000	473/360	341,644	13.6%
Band F	£80,001 to £106,000	585/360	199,994	8.0%
Band G	£106,001 to £212,000	705/360	128,893	5.1%
Band H	Over £212,000	882/360	13,591	0.5%
Total			2,504,933	100.0%

Source: CTaxbase

Notes

¹ These are the ratios from 2017-18 onwards.

2.3.1.1 Collection and Yield of Council Tax

Local authorities are responsible for billing and collecting Council Tax. Before the start of each financial year, local authorities issue Council Tax bills to householders in each dwelling. Each bill is calculated by applying the appropriate band rate for the local authority, then applying any discounts, exemptions, reductions or increases – further details are provided in Tables 2.12 and 2.13.

Chart 2.7 illustrates the gross Council Tax potential yield broken down into the Council Tax billed and the amounts not billed due to discounts and exemptions or where the Council Tax Reduction (CTR) scheme has reduced a household's Council Tax liability.

Source: CTaxbase and CTRR

Notes

¹ The Council Tax yield if all dwellings paid full rate for their relevant Band and Local Authority.

Local authorities collect Council Tax relating to these bills over the year, and also continue to collect late amounts from previous billing years. The provisional in-year Council Tax collection rate in Scotland for 2019-20 was 95.8 per cent, this is the proportion of Council Tax billed for 2019-20 that was collected by 31 March 2020. The total, audited amount of Council Tax collected for Scotland, after CTR and including late payments of bills from prior years, was £2,493 million.

Table 2.8 shows the audited amount of Council Tax collected by each local authority in 2019-20. More information about bills issued in 2019-20 and the provisional amounts collected are available in the Council Tax Collection Statistics, 2019-20 publication.

Table 2.8: Council Tax Income after CTR in 2019-20 by Local Authority, £ thousands ¹

Local Authority	Net Council Tax Income
Aberdeen City	122,817
Aberdeenshire	143,734
Angus	49,783
Argyll and Bute	52,533
City of Edinburgh	271,044
Clackmannanshire	22,804
Dumfries and Galloway	67,323
Dundee City	54,505
East Ayrshire	50,321
East Dunbartonshire	63,200
East Lothian	55,238
East Renfrewshire	52,170
Falkirk	66,217
Fife	163,282
Glasgow City	231,668
Highland	124,870
Inverclyde	32,248
Midlothian	46,380
Moray	43,723
Na h-Eileanan Siar	11,138
North Ayrshire	57,011
North Lanarkshire	119,797
Orkney Islands	9,481
Perth and Kinross	83,548
Renfrewshire	78,685
Scottish Borders	57,763
Shetland Islands	9,643
South Ayrshire	57,406
South Lanarkshire	136,268
Stirling	50,025
West Dunbartonshire	35,296
West Lothian	73,055
Scotland	2,492,976

Source: LFR A0

Notes

¹ Figures relate to income collected in financial year 2019-20, which may include amounts that were billed in previous years.

2.3.1.2 Chargeable Dwellings

Table 2.9 shows the number of dwellings in Scotland for each September from 2015-16 to 2019-20. There were a total of 2.637 million dwellings in Scotland in 2019-20, of which 131,706 were exempt for Council Tax purposes. This gave 2.505 million chargeable dwellings in 2019-20, an increase of around 2.6 per cent, or around 64,400 dwellings, since 2015-16.

Table 2.9: Total Number of Dwellings from 2015-16 to 2019-20

	Total Dwellings	Exempt Dwellings	Chargeable Dwellings
2015-16	2,557,365	116,847	2,440,518
2016-17	2,575,495	120,089	2,455,406
2017-18	2,594,821	121,324	2,473,497
2018-19	2,614,957	127,856	2,487,101
2019-20	2,636,639	131,706	2,504,933

Source: CTaxbase

Chart 2.8 shows the distribution of chargeable dwellings across Council Tax bands in each local authority. Across Scotland, just under three-quarters of all chargeable dwellings are in Bands A to D. The distribution varies across local authorities due to variations in property market values. Na h-Eileanan Siar has the largest proportion of dwellings in Bands A to D at 89 per cent, whereas East Renfrewshire has the lowest proportion in Bands A to D at 43 per cent.

The ratios for Bands E to H, as shown in Table 2.7, were revised in 2017-18 and so dwellings in these bands, which make up just over a quarter of total dwellings, are subject to higher charges.

The three local authorities with the highest number of chargeable dwellings were Glasgow City, City of Edinburgh and Fife, making up over a quarter of the chargeable dwellings in Scotland between them. Further data on the number of chargeable dwellings by local authority and Council Tax band can be found in the supplementary tables at www.gov.scot/collections/local-government-finance-statistics/#counciltax.

Source: CTaxbase

2.3.1.3 Council Tax Rates and Average Bills

Each local authority determines their own Band D rate of Council Tax as part of their budget setting process. The rate for other bands is then calculated as a set ratio of the Band D rate, see Table 2.7, and so each local authority has different Council Tax rates. The 2019-20 Band D Council Tax rates for each local authority are shown in Chart 2.9 ranging from £1,138 in Na h-Eileanan Siar to £1,344 in Midlothian.

Source: CTAS

From 2007-08 to 2016-17, the Scottish Government and local government worked in partnership to freeze Council Tax rates each year. The one exception is Stirling, who reduced their Band D rate from £1,223 in 2007-08 to £1,209 in 2008-09, and subsequently to £1,197 in 2012-13. The Council Tax freeze caused the Scotland average Band D Council Tax rate to remain steady at £1,149 from 2007-08 to 2016-17 – a fall in real terms.

After nine years of the Council Tax freeze, the Scottish Government secured the agreement of local authorities to cap locally determined Council Tax increases to three per cent in cash terms in both 2017-18 and 2018-19. This continued into 2019-20, when local government agreed Council Tax increases to be capped at three per cent in real terms, which was 4.79 per cent in cash terms. In 2019-20, 13 local authorities increased their Band D Council Tax rate by three per cent; 12 by 4.79 per cent; 5 by 4.0 per cent and the remaining two by 3.95 per cent and 4.5 per cent.

The average Council Tax bill per dwelling in 2019-20 was £1,147. This differs from the average Band D rate due to the distribution of dwellings across Council Tax bands, as can be seen in Table 2.7 and Chart 2.7, and the application of discounts.

Table 2.10 shows how the average Council Tax bill for Scotland has changed each year from 2015-16.

Table 2.10: Average Council Tax Bill per Dwelling from 2015-16 to 2019-20

	Average Council Tax bill per Dwelling
	Before CTR	After CTR
2015-16 a	£991	£856
2016-17 a	£997	£867
2017-18	£1,069	£936
2018-19	£1,106	£973
2019-20	£1,147	£1,013

Source: CTAS, CTaxbase and LFR 12

Notes

^a The minor change from year to year is due to a number of factors, such as the distribution of dwellings across bands; discounts and exemptions; new constructions and removal of demolished housing from the roll.

2.3.1.4 Council Tax Reduction (CTR)

Scotland's Council Tax Reduction (CTR) scheme was introduced in 2013 following the UK Government's abolition of Council Tax Benefit (CTB), with responsibility for Council Tax reduction schemes given to local government in England and the Scottish and Welsh Governments.

The CTR scheme reduces the Council Tax liability of lower income households in Scotland, and takes into account a household's earnings, composition and characteristics. The impact of CTR on the average Council Tax bill is also shown in Table 2.10. After taking these reductions in liability into account, the average bill per dwelling for 2019-20 reduced by £134 from £1,147 to £1,013. These figures are averages and it is important to note that not everyone who pays Council Tax will be eligible for CTR; and that CTR levels will be different depending on individual household circumstances and characteristics.

The Scottish Government provides funding to local authorities to compensate them for the loss in tax receipts associated with the CTR scheme. In 2019-20, CTR funding totalled £351 million.

The amounts distributed to each local authority and the final, audited reduction in liability are shown in Table 2.11. The final, audited reduction in liability due to the CTR scheme was around £335 million across Scotland in 2019-20. This figure is £16.0 million less than the £351 million funding provided by the Scottish Government. The three local authorities with the largest CTR liability are Glasgow City, City of Edinburgh and North Lanarkshire.

Table 2.11: CTR Funding and Final, Audited Liability in 2019-20 by Local Authority, £ thousands

Local Authority	SG Funding	Final total reduction in liability
Aberdeen City	10,472	9,950
Aberdeenshire	8,325	7,947
Angus	5,651	5,324
Argyll and Bute	5,498	5,305
City of Edinburgh	26,319	24,598
Clackmannanshire	3,536	3,502
Dumfries and Galloway	9,027	8,773
Dundee City	12,711	12,049
East Ayrshire	9,267	9,035
East Dunbartonshire	4,550	4,560
East Lothian	5,206	5,107
East Renfrewshire	3,824	3,567
Falkirk	8,505	7,965
Fife	21,835	20,475
Glasgow City	70,909	68,038
Highland	13,044	11,993
Inverclyde	6,780	6,586
Midlothian	5,224	4,810
Moray	4,006	3,762
Na h-Eileanan Siar	1,405	1,331
North Ayrshire	12,006	11,609
North Lanarkshire	23,768	22,914
Orkney Islands	789	781
Perth and Kinross	6,634	6,157
Renfrewshire	13,135	12,749
Scottish Borders	5,547	5,201
Shetland Islands	688	676
South Ayrshire	8,599	8,163
South Lanarkshire	20,438	19,760
Stirling	4,209	4,117
West Dunbartonshire	9,107	8,418
West Lothian	9,986	9,776
Scotland	351,000	334,998

Source: CTR Extracts and LFR 12

2.3.1.5 Changes to Council Tax Liabilities

Not all dwellings are liable to pay the full rate of Council Tax. Discounts, exemptions and increased rates can be charged for certain types of dwellings, and the CTR scheme is available to support lower income households in meeting their Council Tax liabilities.

Table 2.12 summarises the range of discounts, exemptions and reductions available and the change in liability that applies to each type. Please note that, in some cases, more than one type of discount, exemption or reduction may apply. The examples given in Table 2.12 are typical but not exhaustive. For a full explanation of Council Tax discounts and exemptions, go to www.gov.scot/policies/local-government/council-tax/.

Table 2.12: Council Tax Discounts, Exemptions, Reductions and Increases

Type of Support	Typical dwellings that are eligible	Reduction in liability
Discounts
Single Person Discount	Chargeable dwellings in which there is only one resident or only one resident is not disregarded.	25% discount
Second Homes	Chargeable dwellings which are no one's sole or main residence, but are furnished and lived in for at least 25 days during any 12 month period.	10 - 50% discount or discount removed 1
Long Term Empty – Less than 12 months (or 24 months for properties for sale or let)	Empty properties not meeting the criteria of a second home, or subject to a separate exemption.	10 - 50% discount 1
Long Term Empty – More than 12 months (or 24 months for properties for sale or let)	Empty properties not meeting the criteria of a second home, or subject to a separate exemption.	Up to 50% discount or an increase of up to 100% 1
Occupied entirely by disregarded adults	Chargeable dwellings occupied entirely by residents who are disregarded for a discount.	50% discount
Exemptions
Occupied	Dwellings occupied solely by any combination of students, care leavers, those with a severe mental impairment, school leavers or persons under the age of 18.	100% reduction
Unoccupied	Dwellings which are; empty and unfurnished for less than 6 months or empty and under repair for less than 12 months. Dwellings which are empty because their former residents have moved out for the purposes of receiving personal care by reason of old age, disablement or illness.	100% reduction
Reductions
Disability reduction	Homes that have been adapted for a disabled person.	One CT Band 2 or, in the case of Band A properties, 5/9 of the Band D charge.
CTR (Passported)	In receipt of Pension Credit (Guarantee), Jobseeker's Allowance (income based), Employment and Support Allowance (income related) or Income Support.	100% reduction
CTR (Not passported)	Low income household.	Up to 100% reduction 3

Notes

¹ The actual change in liability depends on local authority policy. In 2013-14, local authorities gained the discretionary power to remove the empty properties discount or set a Council Tax increase of 100 per cent on properties which have been empty for more than 12 months.

² For example, a Band D rate property that was eligible for the disability reduction would be charged the Band C rate.

³ The exact change in liability is dependent on a means-test.

Table 2.13 shows the number of dwellings eligible for Council Tax discounts and reductions. Of the 2.505 million chargeable dwellings in Scotland, around one million were eligible for a discount in 2019-20. The most common type of discount was the Single Person Discount, with around two-fifths of chargeable dwellings entitled to the discount in 2019-20. The CTR scheme supports almost half a million dwellings, or around one-fifth of chargeable dwellings, in meeting their Council Tax liability.

Around 65,000 dwellings are classified as second homes or long-term empty properties. Further statistics on these are available via Housing Statistics Quarterly Update: December 2020.

Table 2.13: Number of Dwellings ¹ in Receipt of Council Tax Discounts and Reductions at September from 2015-16 to 2019-20

Type of Support	2015-16	2016-17	2017-18	2018-19	2019-20
All chargeable dwellings	2,440,518	2,455,406	2,473,497	2,487,101	2,504,933
Disability reduction	13,505	13,463	13,705	13,903	14,048
Single Person Discount	955,505	963,297	972,537	978,504	988,720
Second Homes 2	27,317	26,140	22,101	24,828	24,314
Long Term Empty – Less than 6 months	36,419	36,236	37,135	39,110	40,963
Occupied entirely by disregarded adults	1,378	1,411	1,352	1,374	1,517
Dwellings not subject to discount	1,419,899	1,428,322	1,440,372	1,443,285	1,449,419
CTR recipients	512,340	495,660	489,560	481,100	471,790

Source: CTaxbase and CTR Extract

Notes

¹ Some dwellings may be eligible for more than one type of support, in these cases the dwelling will be counted under each type of support it is eligible for.

² It is not possible for some local authorities to separately identify second homes and long-term empty dwellings. For these local authorities, the total number of second homes and long-term empty dwellings has been recorded under Second Homes.

2.3.2 Non-Domestic Rates (NDR)

Non-Domestic Rates (NDR) are a property tax for which the occupier of a non-domestic property is statutorily liable. A non-domestic property is an individual property used for non-domestic purposes, such as business premises and third and public sector properties.

The principles of NDR were established in the Lands Valuation (Scotland) Act 1854. This Act also provided for the appointment of the Scottish Assessors, who are responsible for determining the classification and valuation of non-domestic and domestic properties, and are independent of both the Scottish Government and local authorities.

As at 1 April 2019, there were over 250,000 non-domestic properties on the Valuation Roll (see Table 2.15) which generated a net income of £2,761 million, as shown in Table 2.14. This is the total contributable amount^[1] of income.

Each local authority reports to the Scottish Government their contributable amount which is included in the annual NDR Account and published as part of the overall Scottish Government's annual accounts. The amount to be distributed to each authority as part of the annual local government finance settlement is known as the distributable amount and is set by the Scottish Government before the start of the financial year. In 2019-20, the distributable amount was set at £2,853 million – see Chart 2.6 and Table 2.14. Annex C sets out the calculation of the distributable amount for 2019-20.

Table 2.14: NDR Contributable and Distributable Amounts from 2015-16 to 2019-20, £ millions ¹

	2015-16	2016-17	2017-18	2018-19	2019-20 a
NDR contributable amount 2	2,579	2,731	2,762	2,847	2,761
NDR distributable amount	2,789	2,769	2,666	2,636	2,853

Source: NDRI Audited Returns and Local Government Finance Circulars

Notes

¹ Local authority level breakdowns of the 2019-20 figures are provided in Table 2.14a in the 'SLGFS 2019-20 - Publication Tables' Excel file.

² These are the final, audited income figures, collected by the local authorities. They are net of reliefs paid for by the Scottish Government, but not net of any relief costs covered by local authorities.

^a At the time of publication, one local authority was unable to return the Audited figures for 2019-20 as Covid-19 restrictions prevented access to council offices. The provisional outturn (Notified) figure is used for this local authority instead.

From 1 April 2011, the local government funding distribution methodology sees local authorities retain all of the NDR income (NDRI) collected in their area; the previous policy saw NDRI redistributed on the basis of population shares. As the combined total of NDRI and GRG provided to local authorities is guaranteed by the Scottish Government, any decrease in the amount of NDRI collected is compensated for by a corresponding increase in GRG and vice versa. Any changes from the assumed collection amount in any year is paid out or recovered from local authorities in the calculation of future years' distributable amount.

The distributable amount is based upon an estimate of the NDRI made prior to the year start, and includes prior year adjustments. It will not therefore match exactly the NDRI received in any year, as shown in Table 2.14, nor the total eventual contributions to the pool for any year^[2].

2.3.2.1 Rateable Values (RVs)

NDR bills are based on the Rateable Value (RV) of a property. The RV is based on a legally defined valuation and broadly corresponds to the notional rental value the property could achieve in the open market if it were vacant and available to let, taking account of the type and nature of the property. As such, it is not necessarily a reflection of the profitability, turnover, or output of the ratepayer.

RVs are generally initially established when a non-domestic property comes into existence. Non-domestic properties and their corresponding RVs are listed on the Valuation Roll, which is maintained by the Scottish Assessors. RVs are periodically updated at non-domestic revaluations. The Scottish Assessors undertook the last revaluation in 2017, assigning updated RVs to all non-domestic properties in Scotland.^[3] Revaluations have typically taken place on a five year cycle^[4], but from the next revaluation in 2023 will take place every three years.

Table 2.15 shows the composition of properties, and associated RV, on the Valuation Roll by property type. As at 1 April 2019^[5], there were 254,733 properties on the Valuation Roll, with a total RV of £7,462 million. Shops and industrial subjects were the most prevalent types of property on the Valuation Roll, each making up 21 per cent of the number of properties, and 22 per cent and 17 per cent of the total RV respectively. Offices are the next largest category in terms of numbers and RV. Together, these three categories accounted for 60 per cent of properties on the Valuation Roll, and 53 per cent of total RV.

Table 2.15: NDR Properties at 1 April 2019 by Classification ¹

Category	Number of properties 2	% of Properties on Valuation Roll	Rateable Value, £ thousands	% of RV on Valuation Roll
Advertising	1,802	0.7%	10,372	0.1%
Care Facilities	2,953	1.2%	121,158	1.6%
Communications	359	0.1%	24,861	0.3%
Cultural	1,423	0.6%	58,098	0.8%
Education and Training	3,683	1.4%	579,238	7.8%
Garages and Petrol Stations	4,199	1.6%	75,153	1.0%
Health and Medical	3,212	1.3%	236,313	3.2%
Hotels	5,912	2.3%	291,323	3.9%
Industrial Subjects	53,896	21.2%	1,281,314	17.2%
Leisure, Entertainment, Caravans etc.	24,479	9.6%	290,172	3.9%
Offices	45,223	17.8%	1,069,170	14.3%
Other	16,981	6.7%	146,821	2.0%
Petrochemical	140	0.1%	121,808	1.6%
Public Houses	3,623	1.4%	127,350	1.7%
Public Service Subjects	9,948	3.9%	357,921	4.8%
Quarries, Mines, etc.	660	0.3%	16,873	0.2%
Religious	6,067	2.4%	56,729	0.8%
Shops	53,843	21.1%	1,610,162	21.6%
Sporting Subjects	15,119	5.9%	36,550	0.5%
Statutory Undertaking	1,211	0.5%	950,753	12.7%
All Non-Domestic Properties	254,733	100.0%	7,462,137	100.0%

Source: Scottish Assessors Valuation Roll

Notes

¹ Figures at 1 April 2020 are provided in Table 2.15a in the 'SLGFS 2019-20 - Publication Tables' Excel file.

² Includes properties with a zero rateable value.

Chart 2.10 provides a breakdown of properties on the Valuation Roll by local authority and RV band: up to £18,000; between £18,000 and £51,000; and above £51,000. These RV bands were significant in 2019-20 as £18,000 was the cut-off for businesses being eligible for the Small Business Bonus Scheme (SBBS), see Chapter 2.3.2.4, and £51,000 was the threshold above which the Large Business Supplement (LBS) was applied, see Chapter 2.3.2.2.

Across Scotland, 80 per cent of non-domestic properties had a RV of less than £18,000. Twelve per cent had a RV between £18,000 and £51,000, and nine per cent had a RV higher than £51,000.

Source: Scottish Assessors Valuation Roll

Notes

¹ Includes properties with a zero rateable value.

² Figures at 1 April 2020 are provided in the Chart 2.10a tab of the 'SLGFS 2019-20 - Publication Tables' Excel file.

³ Some percentages are not displayed for presentational purposes. Percentages for all bands by local authority are available in the 'Chart 2.10' tab of the 'SLGFS 2019-20 - Publication Tables' Excel file.

In Argyll & Bute, 91 per cent of properties had a RV of less than £18,000, compared to 58 per cent of properties in Aberdeen City. Conversely, Aberdeen City had the highest proportion of properties with a RV of more than £51,000, at 22 per cent, while this figure was lowest in Argyll and Bute, Orkney and Na h-Eileanan Siar at three per cent.

2.3.2.2 NDR Bills

NDR bills are calculated using the RV of the property, multiplied by a poundage set nationally by Scottish Ministers^[6], less any relief or exemption entitlement.

(NDR Bill) _Property = (RV) _Property x (Poundage) _National – (Reliefs) _Property

In 2019-20 the Large Business Supplement (LBS) was applied to properties with an RV greater than £51,000 (the LBS threshold), in addition to the poundage, effectively increasing the poundage on these properties. The LBS was 2.6p in 2019-20^[7].

As NDR bills in Scotland are directly related to the RV of individual non-domestic properties, changes in the total RV occurring within a revaluation cycle, i.e. between revaluation years, impact on the amount of NDR available for collection, as shown in Table 2.16.

Since the last revaluation in 2017, the total RV has increased from £7,358 million at 1 April 2017 to £7,462 million at 1 April 2019. Table 2.16 also shows that before the 2017 revaluation, the total RV had increased from £6,719 million in April 2015 to £6,796 million in April 2016. This was due to the net impact of several factors, including increases in the tax base from new properties or extensions of existing properties; and decreases as demolished properties are deleted from the Valuation Roll or as the RV is reduced as a result of appeals^[8].

Inflation, however, is a key driver of growth in NDRI as changes in the poundage rate had previously typically been tied to the Retail Price Index (RPI)^[9], other than in the first year of a revaluation. For 2018-19, the poundage was increased by the Consumer Price Index (CPI)^[10] to give a poundage of 48.0p, and for 2019-20 Scottish Ministers set the poundage at 49.0p, a below inflation increase from the year before.

At a revaluation, the poundage is reset by the Scottish Government, bearing in mind the resulting total RV change and the amount of revaluation appeals anticipated over the forthcoming cycle. In England, revenue-neutral revaluations are a statutory requirement, with the poundage generally decreasing in line with average RV increases, or vice versa. This is not the case in Scotland, with the 2017 revaluation and poundage actually leading to a decrease in anticipated revenue over the following cycle.

Table 2.16 shows the RV increased from £6,796 million to £7,358 million between April 2016 and April 2017 – mainly as a result of revaluation, with a corresponding decrease in the poundage from 48.4p to 46.6p.

Exempt properties, which do not pay rates, and relief schemes, such as the SBBS, can significantly reduce the amount paid in NDR bills, and therefore the NDRI, see Chapter 2.3.2.4.

Table 2.16: NDR Income, Total Rateable Value and Poundage from 2015-16 to 2019-20

	2015-16	2016-17	2017-18 a	2018-19	2019-20 b
NDRI, £ millions 1	2,579	2,731	2,762	2,847	2,761
Total RV, £ millions 2	6,719	6,796	7,358	7,439	7,462
Poundage, pence	48.0	48.4	46.6	48.0	49.0
LBS, pence 3	1.3	2.6	2.6	2.6	2.6
LBS threshold, £ 3	35,000	35,000	51,000	51,000	51,000

Source: NDRI Audited Returns and Scottish Assessors Valuation Roll

Notes

^a The last revaluation occurred in 2017.

^b At the time of publication, one local authority was unable to return the Audited figures for 2019-20 as Covid-19 restrictions prevented access to council offices. The provisional outturn (Notified) figure is used for this local authority instead.

¹ Income figures are contributable amounts and, as such, are net of reliefs awarded by the Scottish Government, but gross of any local reliefs, or top-ups to discretionary reliefs that the local authorities award themselves.

² As at the start of each financial year.

³ The LBS is applied in addition to the poundage for properties with an RV over the LBS threshold (£51,000 in recent years).

2.3.2.3 Rates Retention Schemes

There are currently two policy initiatives that directly link to the amount of NDR collected: the Business Rate Incentivisation Scheme (BRIS) and Tax Incremental Financing (TIF).

BRIS was introduced from April 2012 to incentivise local authorities to maximise existing NDRI and attract new economic growth. BRIS allows all local authorities that exceed their annual NDR buoyancy target, the target percentage increase in their tax base, to benefit from receiving additional grant, equal to 50 per cent of any additional NDRI. In effect, this means that only 50 per cent of the additional NDRI attributable to the increased buoyancy is deducted from the GRG.

This increased funding is carried forward between revaluation years, with each year's increased funding being carried forward to the next year and added to any new retention awarded, assuming the previous year's income is maintained. In 2019-20, the amount of additional funding received under this scheme^[11] was £13 million.

The Scottish Government is also piloting TIF which allows local authorities to fund public sector infrastructure, which unlocks private sector investment, contributing to sustainable and inclusive economic growth. This growth is funded from future incremental NDRI that is expected to be generated as a result of attracting more businesses into the area thanks to the upfront public sector enabling investment.

TIF is currently being piloted through secondary legislation under existing provisions of the Local Government Finance Act (1992) in four local authorities: Argyll & Bute, Falkirk, Fife and Glasgow. Of these four pilots, only Argyll & Bute and Falkirk reported TIF income in 2018-19. They retained a total of £1.8 million NDRI in 2019-20, compared to £1.7 million in 2018-19.

2.3.2.4 NDR Reliefs

There are a number of types of NDR relief that reduce the NDR bill for qualifying properties^[12]. Table 2.17 shows the amount of relief provided for the main types of relief available for each year between 2015-16 to 2019-20. Local reliefs and the elements of discretionary reliefs funded by local authorities are not included.

The gross amount of relief provided has increased substantially from £626 million in 2015-16 to £763 million in 2019-20. Key reasons for this increase in total relief costs include:

• changes to the poundage;
• changes to the tax base due to recent growth in overall RV and increase in overall RV at revaluation;
• changes in relief entitlement;
• an increased awareness of relief schemes; and
• the introduction of new reliefs.

For example, the SBBS has been expanded in recent years and awareness of the scheme has increased, both of which will have contributed to the rise in cost of SBBS.

Following the 2017 revaluation, a transitional relief scheme was introduced for pubs, hotels and restaurants^[13], and for offices in Aberdeen City and Aberdeenshire. A relief for day nurseries and the Business Growth Accelerator relief for new and improved properties were both introduced in 2018-19.

Table 2.17: Amount of NDR Relief Provided from 2015-16 to 2019-20 by Relief Type, £ thousands ^{1, 2}

	2015-16	2016-17	2017-18	2018-19	2019-20 a
Empty Property Relief	141,604	93,682	93,988	90,937	85,424
Charity Relief	189,312	201,215	214,418	218,977	224,813
Sports Club Relief	13,852	13,851	13,620	15,739	15,747
Disabled Rates Relief	60,599	61,498	61,511	64,354	64,778
SBBS	179,544	187,029	240,663	261,684	278,055
Religious Exemptions	26,625	27,014	26,303	27,129	27,581
Rural Relief	4,235	4,114	3,988	3,946	3,914
Renewable Energy Relief	9,545	647	1,279	7,399	7,266
New Start Relief	188	398	497	447	172
Fresh Start Relief	573	607	436	1,690	3,812
Transitional Relief	n/a	n/a	26,330	11,899	5,243
Day Nursery Relief 3	n/a	n/a	n/a	9,604	9,788
BGA - Unoccupied New Build 3	n/a	n/a	n/a	5,660	3,468
BGA - New Occupied & Improved 3	n/a	n/a	n/a	11,207	31,713
Other 4	422	730	1,104	1,161	1,211
Gross Amount	626,497	590,784	684,137	731,835	762,985

Source: NDRI Audited Returns

Notes

¹ Figures include mandatory and discretionary elements of relief where applicable, but exclude backdated payments of relief and local authorities' own contributions to reliefs.

² A breakdown of NDR reliefs provided in 2019-20 by local authority is provided in Table 2.17a in the 'SLGFS 2019-20 - Publication Tables' Excel file.

³ Day Nursery and Business Growth Accelerator (BGA) Reliefs were introduced in 2018-19.

⁴ Other reliefs include Hardship Relief, Enterprise Areas and District Heating Relief, from 2018-19 also Mobile Mast Relief and New Fibre Relief, and from 2019-20 Lighthouse relief (previously recorded as a deduction).

^a At the time of publication, one local authority was unable to return the Audited figures for 2019-20 as Covid-19 restrictions prevented access to council offices. The provisional outturn (Notified) figure is used for this local authority instead.

Chart 2.11 shows the values of reliefs awarded during 2019-20. The SBBS and Charity relief, including the mandatory reliefs and the parts of the discretionary reliefs which are funded by the Scottish Government, together accounted for £503 million, or around two-thirds of the total amount of reliefs awarded.

Source: NDRI Audited Returns

Notes

A = Day Nursery Relief

B = Renewable Energy Relief

'Other' includes Hardship Relief, Enterprise Area Relief and District Heating Relief, Lighthouse Relief, New Fibre Relief, Mobile Mast Relief, Rural Relief, Fresh Start Relief, New Start Relief, and Transitional Relief.

2.4 Surplus / Deficit to be met from Reserves

A surplus (-) occurs when a local authority's revenue expenditure is lower than the amount of service income and general funding available to them. A surplus is added to a local authority's reserves and carried forward to the next year.

A deficit (+) occurs when a local authority's revenue expenditure is higher than the amount of service income and general funding available to them. Any deficit must be met from a local authority's reserves.

The HRA reserve is not permitted to show a deficit at the end of the financial year and if this occurs, local authorities are required to transfer funds from the General Fund to cover this deficit.

Table 2.18 sets out the movement in the General Fund and HRA reserves in 2019-20. At 1 April 2019, local authorities held a total of £1,672 million in their General Fund and HRA reserves. In year:

• local authorities' revenue expenditure exceeded its income and this resulted in a deficit of £420 million;
• local authorities transferred a total of £472 million into the General Fund and HRA from other reserves held;
• local authorities' IFRS 9 unrealised gains^[14] decreased by £49 million, reducing the amount that is excluded from the revenue reserve balance.

This meant that, overall, the General Fund and HRA increased by £100 million in year, giving a total balance of £1,771 million at 31 March 2020. More information on local authorities' reserves is provided in Chapter 4.1.

Table 2.18: Movement in Reserves in 2019-20, £ millions

	General Fund 1	HRA	Total
Balance as at 1 April 2	1,495	177	1,672
Add: Surplus (+) or Deficit (-) on provision of services after statutory adjustments	-440	19	-420
Add: Movements between reserves 3	480	-8	472
Less: Increase (+) or decrease (-) in IFRS 9 unrealised gains	-49	0	-49
Balance as at 31 March	1,584	188	1,771

Source: LFR 23

Notes

¹ General Fund figures include amounts relating to Harbour Accounts for Orkney and Shetland.

² Excludes amounts relating to unrealised gains as at 31 March 2019 that have been included in revenue reserves applying under IFRS 9: Financial Instruments.

³ Net movements in are shown as a positive; net movements out are shown as a negative.