Core Revenue Funding
Local Authorities receive the bulk of their funding from the Scottish Executive through Aggregate External Finance (AEF). This funding is broken down into three constituent parts. They are Revenue Support Grant (RSG), Non-domestic Rates Income (NDRI) and Specific Grants.
Revenue Support Grant This is a grant paid by the Scottish Executive in support of local authorities' general net revenue expenditure. This sum is calculated to make up the difference between a local authorities' standing spending assessment and the sum of resources obtained from national non-domestic rates and the council tax.
Non Domestic Rates Income This is "pooled" by the Scottish Executive and then redistributed to authorities on a pro-rata basis to population, as part of AEF. In fact, no rates money actually travels between the Executive and authorities. The rates income authorities collect is in effect counted again- netted off- the AEF that the Executive provides.
Specific Grant This is the amount authorities receive separately as grant, but specifically for one service. Funding for these grants is top-sliced from AEF distribution.
In effect this means that the Scottish Executive funds around 80 per cent of local authority expenditure with the remainder being made up of council tax income.
Details of what level of AEF local government will receive for the next three years are set in the Local Government Finance settlement. This settlement is approved in Parliament when the Local Government Finance Order is passed. The detail of the AEF support is issued to local authorities by circular and the most recent circulars can be found by following the link to our finance circulars.
The amounts that each local authority will receive as a monthly redetermination of the Revenue Support Grant is shown on our monthly redeterminations page.