Local government is responsible for delivering essential public services in education and early years learning, social work, housing, local public transport and transport infrastructure, and local environmental services (including waste collection). It also has responsibilities in local economic development, and the provision of recreational and cultural facilities.
The question of how local authorities fund these services is critical to their quality and sustainability, and the outcomes that they support.
Like almost all other parts of the public sector, local authority budgets have faced a real terms squeeze in recent years. Local budgets have also increasingly been impacted by historic commitments and conditions imposed by central government. Given the ratio of own-source revenues to central government funding, local authorities have limited scope to raise significant amounts of revenue directly.
The Fraser of Allander Institute was commissioned in October 2016 by the Scottish Local Government Partnership to undertake a review of fiscal issues facing local government in Scotland.
The Fraser of Allander Institute (FAI) is a leading economy research institute based in the Department of Economics at the University of Strathclyde, Glasgow.