Scottish local government financial statistics 2017-2018

1. Local Government Revenue Expenditure and Funding

The revenue account is used for day-to-day costs, such as paying salaries, bills and rent.

Net Revenue Expenditure is the element funded through General Funding (which is made up of General Revenue Grant, Council Tax and Non-Domestic Rates).

Gross Revenue Expenditure is the total expenditure less inter/intraauthority transfers.

• Gross Revenue Expenditure on services increased by 1.8% to £15.9 billion in 2017-18;
• Net Revenue Expenditure on services increased by 0.8% to £10.1 billion;
• Net Revenue Expenditure on vEducation increased by 0.3% to £4.8 billion;
• Net Revenue Expenditure on Social work decreased by 0.3% to £3.1 billion;
• General Funding increased by 0.4% to £11.8 billion;
• Service income increased by 3.6% to £5.8 billion.

1.1 Total Revenue Expenditure and Funding

The two main local authority accounts are the revenue account and the capital account. The revenue account is used for day-to-day costs, such as paying salaries, bills and rent. The capital account is used to fund expenditure that creates an asset, such as building a school, road or care home. Capital income and expenditure are presented in Chapter 2.

Figures are presented in cash terms throughout the publication, i.e. they have not been adjusted for inflation. Where income is presented alongside expenditure, a convention of presenting income in (brackets) and expenditure without brackets is used.

Table 1.1 summarises revenue income, expenditure, funding and reserves for 2017-18.

Total Gross Revenue Expenditure on services by Scottish local authorities in 2017-18 was £15,870 million, 1.8% higher than in 2016-17. Of this, £686 million was for the provision of housing through the Housing Revenue Account (HRA).

Total service income raised by local authorities in 2017-18 was £5,780 million, an increase of 3.6% on the previous year. Of this, £1,197 million was raised through the HRA.

Net Revenue Expenditure is the element of expenditure on services to be funded by taxation and non-specific grant income (General Revenue Funding, Council Tax and Non-Domestic Rates), with any remaining expenditure to be met from reserves. Net revenue expenditure is calculated as gross service expenditure minus service income. This is sometimes referred to as the Net Cost of Service. Total Net Revenue Expenditure in 2017-18 was £10,090 million, which is an increase of 0.8% on 2016-17.

The largest service area is education with gross expenditure of £5,224 million (an increase of 3.0% on the previous year) and service income of £380 million (an increase of 58.2%) in 2017-18, which gives a net revenue expenditure on education of £4,844 million, an increase of 0.3% compared with 2016-17. The sharp increase in service income is due to the expansion of the Attainment Scotland Fund (ASF), notably the introduction of Pupil Equity Funding, which is a ring-fenced revenue grant. The ASF underspent in 2017-18 which had a negative impact on net expenditure. As a result the net expenditure growth rate is lower than the gross expenditure growth rate.

The second largest service area is social work with gross expenditure of £4,329 million and £1,202 million of service income. Net Revenue Expenditure on social work is £3,127 million, 0.3% lower than in 2016-17.

Education and Social work account for three quarters of General Fund net revenue expenditure on services, with Education accounting for 46% and Social Work accounting for 29% of General Fund net revenue expenditure.

Total Other Income and Expenditure for 2017-18 was £1,702 million, an increase of 0.4% on the previous year. Of this, £828 million was spent on interest charges and £656 million was used to repay debt. Authorities used £296 million of revenue resources to fund capital expenditure. Interest received, surplus or deficit from trading operations and other operating expenditure totalled income of £78 million.

Total General Funding available to authorities in 2017-18 was £11,753 million, 0.4% higher than in 2016-17. Of this, £6,799 million was General Revenue Funding, £2,666 million was Non-Domestic Rates Distributable Amount and £2,278 million was from Council Tax, with £10 million of other funding.

The surplus or deficit on the provision of services is calculated by taking the net cost of service, adding Other Income and Expenditure, then deducting General Funding, which gives a revenue deficit of £39 million in 2017-18. This comprises a £35 million deficit in the General Fund and a £4 million deficit in the Housing Revenue Account.

This deficit must be met from local authority reserves. At the 1^st of April 2017, Local Authorities held £1,664 million of General Fund and HRA reserves. They transferred £18 million into General Fund and HRA reserves from other accounts within the authority, which meant that reserves decreased by £21 million to give a closing balance at the 31^st March 2018 of £1,642 million. Unrounded figures are available in Table 1.1.

Table 1.1 – Revenue Expenditure, Income and Reserves, 2017-18

£thousands

	General Fund	Housing Revenue Account	Total
INCOME AND EXPENDITURE ON SERVICES
Gross Expenditure	15,184,242	686,235	15,870,477
Gross Income	(4,582,971)	(1,197,371)	(5,780,342)
Net Cost of Service	10,601,271	(511,136)	10,090,135
OTHER INCOME AND EXPENDITURE
Interest Payable and Similar Charges	686,212	141,539	827,751
Interest Receivable and Similar Income	(71,973)	(2,418)	(74,391)
Statutory Repayment of Debt	524,324	131,834	656,158
Capital Expenditure Funded from Revenue	51,890	244,128	296,018
(Surplus) or Deficit from Trading Operations	(10,164)	(281)	(10,445)
Other Operating Expenditure	6,295	562	6,857
Other Income and Expenditure	1,186,584	515,364	1,701,948
Funding Requirement	11,787,855	4,228	11,792,083
GENERAL FUNDING
General Revenue Funding	(6,798,956)	0	(6,798,956)
Non-Domestic Rates	(2,665,800)	0	(2,665,800)
Council Tax	(2,278,037)	0	(2,278,037)
Other	(10,340)	0	(10,340)
Total Funding	(11,753,133)	0	(11,753,133)
(Surplus) / Deficit to be met from reserves	34,722	4,228	38,950
RESERVES
Balance at 1 April 2017	(1,494,107)	(169,438)	(1,663,545)
(Surplus) or Deficit for the year	34,722	4,228	38,950
Movement in Reserves	(5,650)	(12,230)	(17,880)
(Increase) or decrease in reserves	29,072	(8,002)	21,070
Balance 31 March 2018	(1,465,035)	(177,440)	(1,642,475)

Source: Local Financial Returns – LFR A0

1.2 General Fund Revenue Expenditure and Income

Chart 1.1 provides a breakdown of General Fund net revenue expenditure by service. The HRA has been excluded from this analysis as it is a separate, self-financing account. Education and social work account for three quarters of General Fund net revenue expenditure. The largest is Education with 46% (£4,844 million) of General Fund net revenue expenditure. Of this, £1,905 million was spent on primary education and £1,869 million on secondary education with the remainder spent on pre-primary, special and community education.

Social work is the next largest service with net revenue expenditure of £3,127 million (29% of General Fund net expenditure). Data on social work expenditure is collected on the basis of client groups. Of the client groups identified in the Local Financial Returns (LFRs), older persons has the highest expenditure with £1,331 million followed by children and families with £917 million and adults with learning disabilities with £522 million.

A full breakdown of expenditure by sub-service is available in the accompanying excel tables.

Chart 1.1: General Fund Net Revenue Expenditure on Services: 2017-18

Table 1.2 provides a time series of net revenue expenditure by service. Education is the only service area that has shown increases in expenditure each year since 2013-14, increasing by 6% from £4,579 million in 2013-14 to £4,844 million in 2017-18. Over the period from 2013-14 to 2017-18, net revenue expenditure on Social Work increased by 3% from £3,031 million in 2013-14 to £3,127 million in 2017-18. Planning & Development Services showed the largest percentage fall (-24%) from £279 million in 2013-14 to £213 million in 2017-18.

Table 1.2 – Net Revenue Expenditure by Service, 2013-14 to 2017-18

£millions

	2013-14	2014-15	2015-16	2016-17	2017-18
Education	4,579	4,612	4,736	4,830	4,844
Cultural & Related Services	614	643	598	577	561
Social Work	3,031	3,110	3,169	3,136	3,127
Roads & Transport	436	420	418	399	432
Environmental Services	659	666	684	679	688
Planning & Development Services	279	278	243	234	213
Central Services	484	439	465	390	448
Non-HRA Housing	321	342	294	292	319
Trading Services	(2)	(5)	(17)	(27)	(30)
General Fund Net Expenditure	10,400	10,504	10,590	10,511	10,601
Housing Revenue Account	(439)	(465)	(490)	(499)	(511)
General Fund + HRA Net Revenue Expenditure	9,961	10,039	10,101	10,012	10,090

Source: Local Financial Returns – LFR 00

Type of Expenditure

The element with the highest gross revenue expenditure is operating costs (which includes property costs, supplies and services costs, transport and payments to agencies and other bodies) which account for £7,088 million of expenditure. The second largest element was employee costs which account for £6,866 million.

Transfer payments are those made to individuals for which no goods or services are received in return by the local authority. The majority of transfer payments are under Non-HRA Housing, which will include the payment of Housing Benefits, and make up around £1,706 million of the total £2,178 million of transfer payments.

An adjustment for Inter-Account and Inter-Authority Transfers is made to the gross expenditure to eliminate transfers between different services within an authority and between local authorities. This prevents double counting expenditure when aggregating the individual returns.

Support services include Finance, Legal, Human Resources, IT, Internal Audit, Procurement and Asset Management.

Local authorities can receive service income from a variety of sources.

The largest element of service income is Customer and Client Receipts, with £2,520 million of income. Of this, £1,187 million is from the Housing Revenue Account, the vast majority of which will be rent income.

The second largest element of service income is Government Grants (excl General Revenue Funding) with £2,225 million, however £1,746 million of this is under Non-HRA Housing, which will include the grant from the DWP to be used by authorities to pay out Housing Benefits.

Table 1.3 Net Revenue Expenditure by Service and Type of Income / Expenditure, 2017-18

£thousands

	Education	Culture and Related Services	Social Work	Roads and Transport	Environmental Services	Housing (non-HRA)	Central and Other	Total General Fund	Housing Revenue Account	Total General Fund plus HRA
EXPENDITURE
Employee Costs	3,644,050	213,183	1,380,739	207,548	327,462	117,668	828,513	6,719,163	146,405	6,865,568
Operating Costs	1,425,908	446,409	2,606,479	559,487	502,781	341,222	711,538	6,593,824	494,641	7,088,465
Transfer Payments	30,207	19,523	226,034	(6,060)	2,377	1,859,712	42,710	2,174,503	3,515	2,178,018
Support Services	197,049	35,574	150,601	37,406	51,801	22,602	184,608	679,641	63,518	743,159
Adjustment for Inter Account and Inter Authority Transfers	(73,044)	(40,308)	(34,590)	(155,186)	(65,945)	(42,305)	(571,511)	(982,889)	(21,844)	(1,004,733)
Gross Expenditure	5,224,170	674,381	4,329,263	643,195	818,476	2,298,899	1,195,858	15,184,242	686,235	15,870,477
INCOME
Government Grants (excl GRG)	(205,480)	(5,461)	(123,898)	(10,664)	(6,742)	(1,797,038)	(71,831)	(2,221,114)	(4,171)	(2,225,285)
Other Grants, Reimbursements and Contributions	(49,121)	(17,122)	(805,853)	(30,198)	(6,132)	(35,397)	(84,946)	(1,028,769)	(6,086)	(1,034,855)
Customer and Client Receipts	(125,302)	(90,980)	(272,355)	(170,851)	(117,169)	(147,559)	(408,602)	(1,332,818)	(1,187,114)	(2,519,932)
Other Income	0	(28)	0	30	0	(218)	(54)	(270)	0	(270)
Total Income	(379,903)	(113,591)	(1,202,106)	(211,683)	(130,043)	(1,980,212)	(565,433)	(4,582,971)	(1,197,371)	(5,780,342)
Net Revenue Expenditure	4,844,267	560,790	3,127,157	431,512	688,433	318,687	630,425	10,601,271	(511,136)	10,090,135

Chart 1.2: Gross Expenditure by Service, 2017-18, £millions

Source: Local Financial Returns – LFR 00

Chart 1.3 shows net revenue expenditure on General Fund services per head of population by council. Valuation Joint Boards, Tay Road Bridge and Regional Transport Partnerships have been excluded from the figure here. The chart shows that on average in Scotland council’s spent £1,964 per person in 2017-18, up slightly from £1,958 in 2016-17. Spend per head ranged from £1,585 per person in Edinburgh to £4,095 per person in Shetland.

Chart 1.3 – General Fund Net Revenue Expenditure per Head Population by Council, 2017-18 (£)

Source: Local Financial Returns – LFR 00 and NRS Mid-Year Population Estimates

1.3 Revenue Income and Funding

Revenue expenditure by local authorities is funded by three main sources:

• Grants from Central Government;
• Local Taxation (Council Tax and Non Domestic Rates);
• Sales, fees and charges for services (Customer and Client Receipts).

The main source of revenue income for local government is General Revenue Funding, (formerly referred to as the Revenue Support Grant). General Revenue Funding (GRF) is paid by the Scottish Government to support the delivery of local services.

Local taxation contributed £4.9 billion to the funding of local government in 2017-18 and further information on these taxes is set out in the following sections. General Revenue Funding and local taxation combined together are sometimes referred to as “Taxation and non-specific grant income”. Other income is mostly composed of grants and subsidies received from central government and other parts of the public sector.

Table 1.4 – Revenue Income by Source, 2013-14 to 2017-18

£millions

	2013-14	2014-15	2015-16	2016-17	2017-18
General Funding:	11,724	11,923	12,003	11,708	11,753
General Revenue Funding	7,225	7,167	7,147	6,839	6,799
Non-Domestic Rates Distributable Amount	2,436	2,656	2,791	2,769	2,666
Council Tax	1,978	2,022	2,055	2,091	2,278
Other Funding	85	78	10	10	10
Service Income:	5,066	5,185	5,230	5,578	5,780
Government Grants (excl GRG)	1,974	1,984	2,040	2,138	2,225
Other Grants, Reimbursements and Contributions	774	833	768	902	1,035
Customer and Client Receipts	2,317	2,368	2,423	2,537	2,520
Total Revenue Income	16,790	17,108	17,233	17,286	17,533

Source: Local Financial Returns – LFR 00

Chart 1.4 – Revenue Income and Funding, 2017-18

Source: Local Financial Returns (LFRs): LFR A0 and 00

1.4 Council Tax

In 2017-18, Council Tax bills were issued to 2.49 million dwellings in Scotland. Over £2.278 billion of Council Tax revenue was raised across all local authorities in Scotland in 2017-18.

Council Tax was introduced in Scotland on the 1^st April 1993 to replace the Community Charge. It is a tax system based on dwellings and is used as a source of funding in addition to that received from other sources (General Revenue Grant, Non-Domestic Rates, ring-fenced revenue grants and other locally raised income from rent, fees and charges).

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

1. The market value of the dwelling as at the 1^st 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-H changed for the 2017-18 Council Tax year.

3. A range of exemptions, discounts and reductions 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 band is given in Table 1.5.

Table 1.5 – Council Tax valuation range and ratios by band

	Valuation band ranges as at 1st April 1991	Ratio to Band D (to 2017-18)	No. of chargeable dwellings as at September 2018	Proportion of chargeable dwellings
Band A	Under £27,000	6/9	503,209	20%
Band B	£27,001 to £35,000	7/9	572,175	23%
Band C	£35,001 to £45,000	8/9	401,847	16%
Band D	£45,001 to £58,000	9/9	336,392	14%
Band E	£58,001 to £80,000	473/360	337,232	14%
Band F	£80,001 to £106,000	585/360	196,377	8%
Band G	£106,001 to £212,000	705/360	126,529	5%
Band H	Over £212,000	882/360	13,340	1%
Total			2,487,101	100%

Source: CTAXBASE 2018 Return

Collection and Potential 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 1.10 and 1.11. Chart 1.5 illustrates the breakdown of the gross Council Tax potential yield into Council Tax billed and the amounts not billed due to Council Tax Reduction (CTR), discounts and exemptions.

Chart 1.5 – Council Tax Potential Yield (£ millions), 2017-18

Source: CTAXBASE 2017 Return and CTRR 2017-18 Q4 Returns

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 for 2017-18 was 96.0 per cent and the total amount collected for Scotland as a whole (after CTR) was £2.278 billion, including late amounts for previous years. Table 1.6 shows the amount of Council Tax collected by each local authority in 2017-18. More information about bills issued in 2017-18 and the provisional amounts collected are available in the statistics publication ‘Council Tax Collection Statistics, 2017-18’ which is available at:

https://www.gov.scot/publications/council-tax-collection-statistics-2017-18-9781788519847/

Table 1.6 – Council Tax income after CTR by local authority, 2017-18^a

Local Authority	Net Council Tax income (£'000s)
Aberdeen City	110,472
Aberdeenshire	134,199
Angus	46,596
Argyll and Bute	48,080
Clackmannanshire	20,702
Dumfries and Galloway	61,454
Dundee City	50,538
East Ayrshire	45,992
East Dunbartonshire	58,042
East Lothian	49,406
East Renfrewshire	48,072
Edinburgh, City of	249,248
Eilean Siar	10,145
Falkirk	61,682
Fife	149,839
Glasgow City	208,966
Highland	115,476
Inverclyde	29,726
Midlothian	40,698
Moray	39,130
North Ayrshire	51,646
North Lanarkshire	108,198
Orkney Islands	8,573
Perth and Kinross	76,171
Renfrewshire	73,238
Scottish Borders	52,712
Shetland Islands	9,042
South Ayrshire	52,039
South Lanarkshire	123,719
Stirling	46,049
West Dunbartonshire	32,607
West Lothian	65,580
Scotland	2,278,037

^a Figures relate to income collected in financial year 2017-18, which can include amounts that were billed in previous years.

Source: Local Financial Returns, 2017-18

Chargeable Dwellings

Table 1.7 shows the number of dwellings in Scotland for each September from 2013 to 2018. There were a total of 2.615 million dwellings in Scotland in 2018, of which 127,900 dwellings were exempt for Council Tax purposes. This gave 2.487 million chargeable dwellings in 2018: an increase of around 3.0 per cent (77,800 dwellings) since 2013.

Table 1.7 – Total number of dwellings in Scotland, 2013 to 2018

	Total Dwellings	Exempt Dwellings	Chargeable Dwellings
2013	2,526,703	116,372	2,410,331
2014	2,540,330	112,525	2,427,805
2015	2,557,365	116,847	2,440,518
2016	2,575,495	120,089	2,455,406
2017	2,594,821	121,324	2,473,497
2018	2,614,957	127,856	2,487,101

Source: CTAXBASE Returns

Chart 1.6 shows the distribution of chargeable dwellings across Council Tax bands in each local authority. Across the whole of 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. Comhairle nan Eilean Siar has the largest proportion of dwellings in Bands A to D (90 per cent), whereas East Renfrewshire has the lowest proportion in Bands A to D (44 per cent). Dwellings in Band E to H, just over a quarter of the total, are subject to revised ratios, and therefore higher charges, from 2017-18.

The three local authorities with the highest number of chargeable dwellings were Glasgow, Edinburgh and Fife, with 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 the link below.

http://www.gov.scot/Topics/Statistics/Browse/Local-Government-Finance/DatasetsCouncilTax

Chart 1.6 - Percentage of chargeable dwellings by Council Tax band for each local authority as at September 2018

Source: CTAXBASE 2018 Return

Council Tax Rates & 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: the ratios used from 2017-18 can be found in Table 1.5. As a result, each local authority has different Council Tax rates. The Band D Council Tax levels for each local authority are shown in Chart 1.7, and range from £1,055 in Comhairle nan Eilean Siar to £1,249 in Glasgow City.

Chart 1.7 – Band D Council Tax rate by local authority, 2017-18 (£)

Source: CTAS 2017 Return

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, where the council reduced the 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.

In 2017-18, the Council Tax freeze ended and the Local Government Finance settlement included an agreement between the Scottish Government and local government for locally determined Council Tax increases to be capped at 3 per cent.

In 2017-18, eight local authorities did not increase their Band D council tax rate, one increased it by 2 per cent, two by 2.5 percent and the remaining 21 local authorities increased their Band D rate by 3 per cent.

Table 1.8 shows how the average Band D Council Tax bill for Scotland has changed each year from 2012-13. The average Council Tax bill per dwelling in 2017-18 was £1,069. This differs from the average Band D rate due to the distribution of dwellings across Council Tax bands, as can be seen in Table 1.5 and Chart 1.5, and the application of discounts.

Table 1.8 – Average Council Tax bills, 2012-13 to 2017-18

		Average1 CT bill per dwelling
	Before CTB/CTR	After CTB/CTR
2012-13	£985	£830
2013-14	£988	£838
2014-15	£989	£846
2015-16	£991	£856
2016-17	£997	£867
2017-18	£1,069	£936

Source: CTAS, CTAXBASE Returns and Local Financial Returns (LFR12)

Council Tax Reduction (CTR)

Scotland’s CTR scheme was introduced in 2013 following the UK Government’s abolition of Council Tax Benefit (CTB) and localisation of Council Tax support. The CTR scheme reduces the Council Tax liability of vulnerable people in Scotland, including people on low incomes, pensioners and lone parents. The impact of CTB/CTR on the average Council Tax bill is also shown in Table 1.8. After taking these reductions in liability into account, the average bill per dwelling for 2017-18 reduced by £133 from £1,069 to £936.

Scotland’s CTR scheme is funded by the Scottish Government. In 2017-18, CTR funding totalled £351 million. This included additional funding for the 25 per cent increase in the child premium within the CTR scheme introduced in April 2017, and the extension of the CTR scheme to provide relief for low to middle income households from the impact of the council tax reforms on properties in Bands E - H.

The amounts distributed to each local authority and the final total costs are shown in Table 1.9. The total cost of the CTR scheme across Scotland in 2017-18 was around £327 million. This figure is £23.7 million less than the £351 million funding provided by the UK Government and Scottish Government.

Table 1.9 – CTR funding and final liability for local authorities, 2017-18

Local Authority	SG Funding (£'000s)	Final total reduction in liability (£'000s)
Aberdeen City	10,304	9,592
Aberdeenshire	8,577	7,621
Angus	5,612	5,283
Argyll and Bute	5,592	5,238
Clackmannanshire	3,626	3,400
Dumfries and Galloway	8,953	8,422
Dundee City	12,770	11,947
East Ayrshire	9,455	8,733
East Dunbartonshire	4,619	4,323
East Lothian	5,238	4,942
East Renfrewshire	3,902	3,654
Edinburgh, City of	26,672	24,718
Eilean Siar	1,462	1,316
Falkirk	8,491	7,838
Fife	21,352	20,220
Glasgow City	70,692	65,910
Highland	12,916	11,982
Inverclyde	6,605	6,238
Midlothian	5,234	4,759
Moray	3,975	3,739
North Ayrshire	12,059	11,342
North Lanarkshire	23,725	22,238
Orkney Islands	786	739
Perth and Kinross	6,701	6,188
Renfrewshire	13,051	12,187
Scottish Borders	5,584	5,086
Shetland Islands	674	625
South Ayrshire	8,677	8,144
South Lanarkshire	20,370	19,288
Stirling	4,282	4,005
West Dunbartonshire	9,040	8,428
West Lothian	10,004	9,164
Scotland	351,000	327,309

Source: Local Financial Returns (LFR23), CTR Extract

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 vulnerable people in meeting their Council Tax liabilities. Table 1.10 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 1.10 are typical but not exhaustive. For a full explanation of Council Tax discounts and exemptions, go to: https://www.gov.scot/policies/local-government/council-tax/

Table 1.10 – Council Tax discounts, exemptions, reductions and increases

Type of Support Discounts	Typical dwellings that are eligible	Reduction in liability
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 removed1
Long Term Empty (6 - 12 months)	Empty properties not meeting the criteria of a second home.	10 - 50% discount
Long Term Empty (> 12 months)	Empty properties not meeting the criteria of a second home.	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, 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 then 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 or 5/9 of the Band D charge reduction2
Council Tax Reduction (Passported)	In receipt of Pension Credit (Guarantee), JSA (income based), ESA(income related) or Income Support.	100% reduction
Council Tax Reduction (Not passported)	Low income household.	Up to 100% reduction3

^{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 1.11 shows the number of dwellings eligible for Council Tax discounts and reductions. Of the 2.49 million chargeable dwellings in Scotland, around 1 million were eligible for a discount in 2018. The most common type of discount was the Single Person Discount, with around two-fifths of chargeable dwellings entitled to the discount in 2018. The CTR scheme supports almost half a million dwellings, or around one-fifth of chargeable dwellings, in meeting their Council Tax liability.

Around 64,000 dwellings are classified as second homes or long term empty properties: further statistics on these are available at: https://www.gov.scot/publications/housing-statistics-quarterly-update-december-2018/.

Table 1.11 – Number of dwellings¹ in receipt of Council Tax discounts and reductions as at September

Type of Support	2013	2014	2015	2016	2017	2018
All chargeable dwellings	2,410,331	2,427,805	2,440,518	2,455,406	2,473,497	2,487,101
Disability reduction	13,791	13,736	13,505	13,463	13,705	13,903
Single Person Discount	952,251	953,612	955,505	963,297	972,537	978,504
Second Homes 2	35,734	27,879	27,317	26,140	22,101	24,907
Long Term Empty (empty > 6 months)	27,327	31,884	36,419	36,236	37,135	39,110
Occupied entirely by disregarded adults	1,579	2,802	1,378	1,411	1,352	1,374
Dwellings not subject to discount	1,393,440	1,411,628	1,419,899	1,428,322	1,440,372	1,443,206
Council Tax Reduction/Benefit3	548,070	533,980	512,340	495,660	489,560	481,100

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 councils to separately identify second homes and long term empty dwellings. For these councils, the total number of second homes and long term empty dwellings have been recorded under second homes.

³ Council Tax Benefit figures from 2010 to 2012 were published by DWP and are available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/229795/hbctb_release_may13_revised.xls

Source: CTAXBASE Returns, CTR Extract and DWP CTB figures

1.5 Non-Domestic Rates

Non-Domestic Rates (NDR) is a property tax paid by the owner/occupier or tenant of a non-domestic property.

In 2017-18, the income raised from NDR was £2.76 billion.

The principles of non-domestic rates 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. A non-domestic property is an individual property used for non-domestic purposes. Examples include business premises and third and public sector properties.

The value given to a property for NDR purposes is called its rateable value (RV). 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 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 rate revaluations. Scottish Assessors undertook the last revaluation in 2017, assigning updated rateable values to all non-domestic properties in Scotland.^[1] Revaluations typically have taken place on a 5-year cycle^[2] NDR bills are calculated using the RV of the property, multiplied by a poundage set nationally by Scottish Ministers, less any relief or exemption entitlement.

In 2017-18, for properties with an RV greater than £51,000, the Large Business Supplement (LBS) applied in addition to the poundage (the poundage is effectively increased by adding the LBS).

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 1.12 shows the composition of properties (and associated RV) on the Valuation Roll by property type. As at 1^st April 2017^[3], there were 233,386 properties with a total RV of £7.4 billion. Shops were the most prevalent type of property on the Valuation Roll, making up nearly a quarter (23%) of the number of properties and RV on the roll. Industrial subjects and offices are the next two largest categories in terms of numbers and RV. Together, these three categories account for 63% of properties on the valuation roll, and 54% of the RV.

Table 1.12 – Non-Domestic Rates Properties by Classification (as at 1 April 2017)

	Number of properties	Rateable value (£)	% of Properties on Valuation Roll	% of RV on Valuation Roll
CATEGORY	1st April 2017	1st April 2017	1st April 2017	1st April 2017
Advertising	1,924	10,538,430	1%	0%
Care Facilities	2,975	118,542,034	1%	2%
Communications	349	24,645,995	0%	0%
Cultural	1,419	53,810,920	1%	1%
Education and Training	3,705	559,765,675	2%	8%
Garages and Petrol Stations	4,245	74,937,080	2%	1%
Health and Medical	3,233	228,000,365	1%	3%
Hotels	5,469	275,073,193	2%	4%
Industrial Subjects	49,050	1,256,125,440	21%	17%
Leisure, Entertainment, Caravans etc.	22,299	281,406,378	10%	4%
Offices	44,061	1,082,525,979	19%	15%
Other	16,156	141,617,533	7%	2%
Petrochemical	142	122,224,305	0%	2%
Public Houses	3,732	132,642,075	2%	2%
Public Service Subjects	10,082	356,549,995	4%	5%
Quarries, Mines, etc.	660	17,990,509	0%	0%
Religious	6,101	56,293,665	3%	1%
Shops	53,709	1,611,664,302	23%	22%
Sporting Subjects	3,010	18,120,492	1%	0%
Statutory Undertaking	1,065	935,200,808	0%	13%
TOTAL All NON-DOMESTIC PROPERTIES	233,386	7,357,675,173	100%	100%

Source: Scottish Assessors Valuation Roll, 1st April 2017

Table 1.13 provides a breakdown of properties on the Valuation Roll by local authority and RV band.

In terms of the Small Business Bonus Scheme (SBBS) and the application of the Large Business Supplement (LBS), £18,000 and £51,000 currently (2017/18) represent the rateable value thresholds for small and large businesses respectively.

Around 78% of all properties (180,886 properties) have a rateable value less than or equal to £18,000, and around 9% of properties have a rateable value of more than £51,000.

Table 1.13 – Non-Domestic Rates Subjects by Local Authority (as at 1 April 2017)¹

Local Authority	Rateable Value Band			Total Non-Domestic Properties
	<= £18,000	£18,001 to £51,000	> £51,000
Scotland	180,886	30,498	22,002	233,386
Aberdeen City	5,435	1,962	2,146	9,543
Aberdeenshire	9,488	1,430	966	11,884
Angus	4,135	475	274	4,884
Argyll & Bute	7,686	564	266	8,516
Clackmannanshire	1,234	206	113	1,553
Dumfries & Galloway	8,310	698	388	9,396
Dundee City	4,280	881	692	5,853
East Ayrshire	3,229	447	277	3,953
East Dunbartonshire	1,813	377	198	2,388
East Lothian	2,836	394	253	3,483
East Renfrewshire	1,314	301	136	1,751
Edinburgh, City of	15,876	3,863	3,116	22,855
Eilean Siar	2,221	159	90	2,470
Falkirk	3,765	737	496	4,998
Fife	10,811	1,801	1,032	13,644
Glasgow City	19,143	4,507	3,596	27,246
Highland	15,242	1,528	1,091	17,861
Inverclyde	1,880	275	190	2,345
Midlothian	2,323	394	306	3,023
Moray	3,853	435	321	4,609
North Ayrshire	4,124	586	353	5,063
North Lanarkshire	7,426	1,542	1,045	10,013
Orkney Islands	1,919	185	71	2,175
Perth & Kinross	7,275	807	539	8,621
Renfrewshire	4,889	900	714	6,503
Scottish Borders	6,244	630	317	7,191
Shetland Islands	1,768	178	110	2,056
South Ayrshire	3,844	611	386	4,841
South Lanarkshire	7,358	1,557	1,046	9,961
Stirling	4,195	687	420	5,302
West Dunbartonshire	2,290	369	267	2,926
West Lothian	4,680	1,012	787	6,479

1. Includes properties with a zero rateable value.

Source: Scottish Assessors Valuation Roll, 1st April 2017

Table 1.14 shows a time series of annual NDR Income, total rateable value and poundage rate. As a consequence of the 2017 revaluation, the poundage was reduced from 48.4p in 2016-17 to 46.6p in 2017-18 and the total RV of non-domestic properties (the tax base) increased from £6.8 billion in 2016-17 to £7.4 billion in 2017-18.

Table 1.14 – Non-Domestic Rates Income, Total Rateable Values and Poundage Rate

	2009-10	2010-111	2011-12	2012-13	2013-14	2014-15	2015-16	2016-17	2017-181
Non Domestic Rates Income (£m)2	2,010	2,138	2,251	2,347	2,367	2,511	2,579	2,731	2,762
Total Rateable Value (£m)3	5,299	6,612	6,678	6,718	6,716	6,681	6,719	6,796	7,358
Poundage Rate (pence)	48.1	40.7	42.6	45.0	46.2	47.1	48.0	48.4	46.6
Large Business Supplement (pence) 4	0.4	0.7	0.7	0.8	0.9	1.1	1.3	2.6	2.6

1. Revaluations occurred in 2010 and 2017.

2. All income figures, including 2017-18, are the final audited income collected by councils, and paid to SG. These figures are net of reliefs awarded by the SG, but gross of any local reliefs, or top-ups to discretionary reliefs that the councils award themselves.

3. As at start of financial year

4. The Large Business Supplement is applied in addition to the poundage for properties with a rateable value over £51,000

Source: NDR Income – Non-domestic Rate Income Returns, Rateable Value – Scottish Assessors Valuation Roll as at 1st April

Table 1.14 also shows that between the 2010 and 2017 revaluations the total RV had increased slightly from £6.6 billion in 2010-11 to £6.8 billion in 2016-17. This was due to the net impact of several factors including increases in the tax base from new properties or extension 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^[4]. As non-domestic rates bills in Scotland are directly related to the rateable values of individual non-domestic properties, changes in the totalRV impact on the amount of NDR available for collection, along with other factors such as the poundage rate and backdated revaluation appeals losses which also affect the final income.

Inflation is a key driver of growth in NDR income as the poundage rate, set nationally by Scottish Ministers^[5], has previously typically been tied to the Retail Price Index^[6] (other than in the first year of a revaluation). NDR bills are calculated by multiplying the RV of a property by the poundage rate, and then applying discounts and exemptions. Large business properties (those with a RV greater than £51,000 in 2017-18) also pay a supplement to the poundage rate, known as the Large Business Supplement (LBS). The LBS was 2.6p in 2017-18^[7]. For the period 2012-13 to 2014-15, large retailers with RV of £300,000 or more that sold both alcohol and tobacco also paid the Public Health Supplement (PHS) - an additional 13p on the poundage rate in 2014-15. These supplements increase the amount paid in NDR bills. Conversely, exempt properties (which do not pay rates), and relief schemes such as the Small Business Bonus Scheme can significantly reduce the amount paid in NDR bills, and therefore the NDR income.

Table 1.15 summarises the total number of properties and rateable value as at 1^st April 2017 and the NDR income collected in 2017-18 by local authority. This is net of reliefs, apart from those for which the cost is met by local authorities. Consequently, amounts reported are slightly greater than those actually paid.

Some councils have responsibility for collection of NDR for specific utilities. For these councils, the entries on the valuation roll and NDR income include Scotland-wide data for the specified utilities sectors.

There are a number of types of NDR relief that reduce the NDR bill for qualifying properties. Table 1.16 shows the main types of relief available^[8] and the amount of relief provided each year from 2010-11 to 2017-18. 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 £501 million in 2010-11 to £684 million in 2017-18. Key reasons for change in total relief costs include changes to the poundage, changes to the tax base (recent growth in overall RV and increase in overall RV at revaluation), changes in relief entitlement, increased awareness of a relief scheme, or introduction of new reliefs. For example the Small Business Bonus Scheme (SBBS) has been expanded in recent years and a greater awareness of the scheme 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 with rateable value below £1.5 million, and for offices in Aberdeen and Aberdeenshire. Table 1.16a shows the amount of relief paid in each local authority area in 2017-18.

Table 1.15 – Non-Domestic Rates Properties, Rateable Values and Income By Local Authority¹

Authority	Non-Domestic Properties 2 Apr-17	Non-Domestic Rateable Values Apr-17 (£000s)	Non-Domestic Rate Income 2017-18 3 (£000s)
Scotland	233,386	7,357,675	2,762,249
Aberdeen City	9,543	593,767	242,635
Aberdeenshire	11,884	286,633	113,584
Angus	4,884	80,431	25,141
Argyll & Bute	8,516	109,931	36,101
Clackmannanshire	1,553	42,498	16,070
Dumfries & Galloway	9,396	123,270	46,058
Dundee City	5,853	186,886	66,203
East Ayrshire	3,953	80,366	26,617
East Dunbartonshire	2,388	68,991	22,973
East Lothian	3,483	74,989	24,042
East Renfrewshire	1,751	43,253	14,505
Edinburgh, City of	22,855	945,618	349,501
Eilean Siar	2,470	26,491	7,516
Falkirk	4,998	184,691	72,134
Fife	13,644	427,587	160,833
Glasgow City	27,246	1,016,782	359,289
Highland	17,861	359,803	130,418
Inverclyde	2,345	57,341	19,165
Midlothian	3,023	84,100	32,641
Moray	4,609	108,444	43,680
North Ayrshire	5,063	115,161	38,618
North Lanarkshire	10,013	291,967	107,549
Orkney Islands	2,175	28,851	9,677
Perth & Kinross	8,621	159,642	53,195
Renfrewshire	6,503	316,839	121,166
Scottish Borders	7,191	106,773	32,361
Shetland Islands	2,056	60,817	24,881
South Ayrshire	4,841	115,179	41,498
South Lanarkshire	9,961	744,327	323,259
Stirling	5,302	122,596	41,529
West Dunbartonshire	2,926	185,733	78,573
West Lothian	6,479	207,919	80,838

1. Rates bills for specific utilities are collected by specified councils on behalf of all 32 councils, and appear on the valuation roll for those councils: South Lanarkshire (Electricity), West Dunbartonshire (Gas), Fife (Water), Falkirk (Docks and Harbours), Highland (Railways), Renfrewshire (Telecommunications). This increases the take for those authorities.

2. Includes properties with a zero rateable value.

3. Audited income collected by councils. This is net of reliefs paid by Scottish Government, but gross of all local reliefs, and top-ups to discretionary amounts paid by councils themselves.

Sources: Number of Properties and Rateable Value - Scottish Assessors Valuation Roll (April 2017). NDR Income - Non-domestic Rate Income Returns provided by Councils.

Table 1.16 – Amount of Non-Domestic Rates Relief Provided by Relief Type^1,2

£thousands

	2010-11	2011-12	2012-13	2013-14	2014-15	2015-16	2016-17	2017-18
Empty Property Relief	145,936	157,862	169,134	146,496	140,962	141,604	93,682	93,988
Charities	136,731	151,276	164,979	173,623	181,242	189,312	201,215	214,418
Sports Clubs	11,476	12,059	12,431	12,911	13,487	13,852	13,851	13,620
Disabled persons relief	51,901	54,372	57,580	58,299	59,648	60,599	61,498	61,511
SBBS	123,259	134,719	150,196	161,002	170,635	179,544	187,029	240,663
Religious Properties	24,016	22,960	24,573	25,205	26,113	26,625	27,014	26,303
Rural Rate Relief	4,129	4,218	4,305	4,323	4,244	4,235	4,114	3,988
Renewable Energy Relief Scheme3	3,560	4,126	4,811	7,333	9,280	9,545	647	1,279
New Start4				130	484	188	398	497
Fresh Start4				189	536	573	607	436
Transitional Relief5								26,330
Other6	4	43	10	63	221	422	730	1,104
Gross Amount	501,013	541,635	588,018	589,574	606,852	626,497	590,784	684,137

1. Estimates include mandatory and discretionary elements of relief where applicable, but exclude backdated payments of relief and excludes councils own contributions to reliefs

2. Reliefs for all years, including 2017-18, are final audited figures.

3. The Renewable Energy Relief Scheme was introduced on 1 April 2010.

4. The New Start and Fresh Start relief schemes were introduced on 1 April 2013.

5. Transitional relief was introduced for certain classes of properties following the 2017 revaluation.

6. Other includes Hardship and Enterprise Areas.

Source: Non-domestic Rate Income Returns from Councils

Table 1.16a – Amount of Non-Domestic Rates Relief Provided by Relief Type, by Local Authority, 2017-18^1,2 £thousands

Authority	Empty Property Relief	Charities	Sports Clubs	Disabled persons relief	SBBS	Religious Exemption	Rural Rate Relief	Transitional Relief	Other3	All reliefs
Aberdeen City	12,871	12,855	279	2,975	7,023	1,158	0	3,719	105	40,984
Aberdeenshire	1,963	2,828	990	2,533	11,737	959	1,181	927	387	23,505
Angus	985	2,096	1,424	1,276	5,173	466	65	183	34	11,701
Argyll & Bute	479	2,595	148	650	8,243	588	197	933	328	14,159
Clackmannanshire	431	942	101	433	1,784	191	4	0	0	3,886
Dumfries & Galloway	985	2,100	335	1,124	8,588	497	203	544	5	14,380
Dundee City	2,787	10,169	156	2,284	6,444	597	0	320	17	22,774
East Ayrshire	986	2,921	146	1,174	4,696	448	3	143	4	10,520
East Dunbartonshire	197	3,030	382	984	3,434	508	0	32	11	8,578
East Lothian	902	2,971	894	1,009	4,192	450	50	253	0	10,721
East Renfrewshire	282	1,477	223	941	2,257	321	0	130	61	5,692
Edinburgh, City of	15,622	40,003	1,489	7,659	24,343	3,735	0	6,407	254	99,511
Eilean Siar	104	1,045	63	430	1,869	324	111	62	142	4,149
Falkirk	2,607	3,117	191	1,605	5,231	650	4	10	15	13,430
Fife	4,678	9,836	529	3,868	14,921	1,837	35	577	179	36,459
Glasgow City	25,226	52,784	666	7,678	29,388	2,370	0	2,887	243	121,243
Highland	1,274	9,710	332	3,778	16,479	1,337	1,133	2,718	267	37,027
Inverclyde	676	2,075	326	689	2,674	328	0	30	27	6,823
Midlothian	523	3,574	292	656	3,119	335	10	99	0	8,608
Moray	357	1,658	191	1,100	4,342	487	142	244	0	8,522
North Ayrshire	2,715	2,959	305	1,783	5,519	499	59	351	85	14,274
North Lanarkshire	3,198	8,153	351	2,522	11,204	2,414	4	156	195	28,196
Orkney Islands	235	882	65	200	1,699	161	288	122	115	3,767
Perth & Kinross	737	5,424	292	2,619	9,531	741	103	1,489	238	21,172
Renfrewshire	2,745	5,642	272	2,371	6,755	610	0	954	21	19,370
Scottish Borders	1,108	2,943	583	1,243	7,762	524	103	224	24	14,514
Shetland Islands	165	1,202	818	380	1,245	105	122	298	183	4,520
South Ayrshire	1,528	2,251	296	1,512	5,577	532	53	522	180	12,452
South Lanarkshire	2,185	6,576	437	3,156	9,946	1,631	26	341	103	24,402
Stirling	1,188	4,371	538	809	5,498	541	77	1,300	67	14,389
West Dunbartonshire	907	2,291	62	670	3,427	342	4	228	0	7,932
West Lothian	3,342	3,939	444	1,401	6,565	617	10	131	28	16,477
Scotland	93,988	214,418	13,620	61,511	240,663	26,303	3,988	26,330	3,316	684,137

1. Estimates include mandatory and discretionary elements of relief where applicable, but exclude backdated payments of relief. Figures exclude local reliefs, or top-ups to discretionary reliefs which the local authorities award themselves.

2. Figures are final audited figures.

3. Other includes Hardship, Enterprise Areas, New Start, Fresh Start and Rural Rate Relief.

Source: Non-domestic Rate Income Returns from Councils

Each council reports to the Scottish Government the amount of NDR collected which is to be included in the annual NDR Account which is 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 (DA) and is set by the Scottish Government before the start of the financial year in question.

From 1^st April 2011, the local government funding distribution methodology sees Councils retain all of the NDR income collected in their area (the previous policy saw NDR redistributed on the basis of population shares). As the combined total of NDR income and General Revenue Grant (GRG) provided to councils is guaranteed by the Scottish Government, any increase in the amount of NDR collected is compensated for by a corresponding decrease in GRG and vice versa. Any changes from the assumed collection amount in any year is paid out or recovered from Councils in the calculation of future years distributable business rates totals. The Distributable Amount is based upon an estimate of the NDR income made prior to the year start, and includes prior year adjustments. It will not therefore match exactly the NDR income received in any year (as given in tables 1.14 and 1.15), nor the total eventual contributions to the pool for any year.

The calculation of the distributable amount for 2017-18 is given in Annex F and the 2017-18 distributable amount per local authority is shown in Table 1.17.

There are two current policy initiatives that directly linked to the NDR collected.

A Business Rates Incentivisation Scheme (BRIS) was introduced from April 2012 to incentivise councils to maximise existing business rates income and attract new economic growth by allowing all authorities that exceed their annual business rates buoyancy target (the target percentage increase in their tax base) to benefit from receiving additional grant equal to 50% of any additional NDR income. In effect this means that only 50% of the additional NDR 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 2017-18 the amount the additional funding received under this scheme (according to the authorities’ returns) was £1.03 million (cumulative £8.9 million in 2016-17).

The Scottish Government is also piloting Tax Incremental Financing (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 business rates that are generated as a result of attracting more businesses into the area because of upfront public sector enabling investment.

Six pilot TIF schemes were developed through secondary legislation under existing provisions of the Local Government Finance Act (1992). The pilot approach has allowed this model to be tested in Scotland, with four pilot projects currently in place, of which three have received full approval (Argyll & Bute, Falkirk and Glasgow) and one (Fife) has received approval in principle. In 2017-18 the amount of NDR retained by local authorities for TIF projects was (according to the authorities’ returns) £1.5 million (£1.2 million in 2016-17).

Table 1.17 – Non-Domestic Rates Distributable Amount¹ by Local Authority, 2017-18

	Non-Domestic Rate Distributable Amount (£000s)1
Scotland	2,665,800
Aberdeen City	205,547
Aberdeenshire	95,828
Angus	27,233
Argyll & Bute	29,615
Clackmannanshire	14,928
Dumfries & Galloway	45,529
Dundee City	66,700
East Ayrshire	29,367
East Dunbartonshire	23,586
East Lothian	24,550
East Renfrewshire	14,427
Edinburgh, City of	355,063
Eilean Siar	7,962
Falkirk	65,438
Fife	170,998
Glasgow City	373,238
Highland	122,421
Inverclyde	21,283
Midlothian	29,273
Moray	33,406
North Ayrshire	40,568
North Lanarkshire	114,474
Orkney Islands	9,688
Perth & Kinross	52,035
Renfrewshire	98,908
Scottish Borders	32,673
Shetland Islands	23,240
South Ayrshire	39,756
South Lanarkshire	287,862
Stirling	42,829
West Dunbartonshire	77,319
West Lothian	90,056

Source: Local Government Finance Circular 01/2017.

1. The Distributable Amount is the amount distributed to local authorities as part of the annual local government finance settlement; it is based upon an estimate of the NDR income, including prior year adjustments. It is not guaranteed to match the contributable amount of income that year (as given in tables 1.14 and 1.15)

2. The Distributable Amount for 2018-19 was published in December 2017 in the Local Government Finance Circular 05/2017, and will be set out in next year’s publication. 2019-20 Distributable Amount was published in December 2018 and can be found in the Local Government Finance Circular 08/2018.

1.6 Customer and Client Receipts

Local authorities receive income from sales, rents, fees and charges as a result of providing a range of services. The amount of income associated with each service is detailed in Table 1.18 below.

The total customer and client receipts received by local authorities has decreased by 0.7%, from £2,537 million in 2016-17 to £2,520 million in 2017-18. In the General Fund this has decreased by 2.8%, from £1,371 million in 2016-17 to £1,333 million in 2017-18. Almost half (47%) of customer and client receipts are attributable to the HRA which has seen receipts increase by 1.8% from £1,166 million to £1,187 million in 2017-18.

Table 1.18 – Customer and Client Receipts – 2013-14 to 2017-18

£thousands

	2013-14	2014-15	2015-16	2016-17	2017-18
Education	120,563	124,200	122,477	129,671	125,302
Cultural & Related Services	71,185	72,567	68,799	77,823	90,980
Social Work	276,012	275,301	264,079	262,481	272,355
Roads & Transport	175,384	182,690	182,978	167,044	170,851
Environmental Services	117,457	112,180	123,825	114,394	117,169
Planning & Development Services	121,077	120,161	134,682	119,161	128,862
Central Services	131,709	143,806	162,394	242,788	202,596
Non-HRA Housing	160,800	155,076	159,635	166,188	147,559
Trading Services	69,843	69,639	63,077	91,816	77,144
Total General Fund (GF) Customer and Client Receipts	1,244,030	1,255,620	1,281,946	1,371,366	1,332,818
Housing Revenue Account (HRA)1	1,073,362	1,112,210	1,140,720	1,165,976	1,187,114
Total GF + HRA Customer and Client Receipts	2,317,392	2,367,830	2,422,666	2,537,342	2,519,932

1. The Housing Revenue Account (HRA) records income and expenditure relating to the provision of Local Authority housing.

Source: Local Financial Returns (LFRs)