2. To ask the Scottish Government how it has been working with the Convention of Scottish Local Authorities to ensure that fast-growing local authorities, such as Midlothian, are effectively funded through COSLA’s funding formula. (S5O-05082)

The distribution formula is kept under constant review and is agreed with COSLA every year. Although the formula takes into account a range of needs-based factors, it is primarily population based. If the population of Midlothian grows faster than that of other local authority areas, Midlothian Council receives an increased share of the available funding, all other factors being equal.

We have convened the ministerial population task force, which is committed to addressing Scotland’s demographic challenges, so that Scotland’s population profile provides a platform for sustainable and inclusive economic growth and wellbeing.

We all know the importance of properly funded local authorities. That will undoubtedly be affected by the fact that the United Kingdom Government has cut Scotland’s capital budget by more than 5 per cent this year.

What representations is the Cabinet secretary making to the UK Government to ensure that we get a budget that allows us to better fund our local authorities, so that we can prevent potential council cuts in our local areas?

We have repeatedly called on the UK Government to at least maintain Scotland’s capital grant next year, pointing to the importance of public sector capital investment to rebuild economies. The cut was to our financial transactions budget, and we have drawn down £200 million from the Scottish reserve to offset that as far as possible. Working with other devolved Governments, we have secured agreement from the UK Government that any late consequentials can be spent next year to reduce pressure on our budget.

According to COSLA, the increase in the revenue grant for local councils from last year to this year is just 0.9 per cent in terms of their core budgets, yet the Scottish Government’s own budget was up by 11 per cent, even before the additional Barnett consequentials that were announced in the UK budget yesterday were added in. How does the finance secretary think that that represents a fair deal for our councils when they are getting less than one 10th of the uplift that is coming to her budget?

I certainly do not think that that represents fair arithmetic, because the figure that Murdo Fraser has quoted excludes most of the funding that we have given to local authorities, and certainly excludes Covid consequentials, which he has factored into the 11 per cent figure, so it is not comparing like with like. If anything, members will see from the figures that COSLA will have a 3.1 per cent increase in its core settlement over and above the £259 million that we have agreed for next year’s budget, as well as the £275 million of additional funding that I announced just last week to cover lost income.