WIREDGOV

An Official Statistics Publication.

The Chief Statistician has released figures on 2025-26 provisional outturn and 2026-27 budget estimates for revenue and capital services provided by local authorities.

In 2025-26, net revenue expenditure on local authority services was provisionally reported as £16,479 million in 2025-26 and budgeted as £17,254 million for 2026-27. Compared to 2024-25 figures, net revenue expenditure is estimated to increase by 6.9% in 2025-26, and is estimated to increase by a further 4.7% in 2026-27.

Education and Social Work continue to be the services with highest net revenue expenditure in both 2025-26 and 2026-27. These services account for around 81% of general fund net revenue expenditure.

Local authorities reported provisional general funding of £17,581 million in 2025-26, and budgeted for £18,305 million of general funding in 2026-27.

General Fund reserves (including Harbour Accounts) at 31 March 2026 were provisionally reported as £2,775 million, and budgeted to be £2,617 million at 31 March 2027. For context, General Fund reserve balances (including Harbour Accounts) were £1,584 million on 31 March 2020. Therefore, whilst reserve balances remain above pre-pandemic levels for Scotland, these are beginning to be brought down.

Capital expenditure across local authorities was provisionally reported as £4,461 million in 2025-26, and budgeted as £5,318 million in 2026-27. The step change in Capital expenditure for Education remains on average around £300 million a year higher for the five years 2024-25 to 2028-29, compared to 2019-20 to 2023-24, reflecting the roll out of the Learning Estate Investment Programme.

The main sources of capital financing are grants & contributions and borrowing. Borrowing is expected to increase to £2,228 million in 2025-26, and then to £3,349 million in 2026-27. In 2025-26 and 2026-27, in-year borrowing is the primary source of capital financing.

Total external debt was provisionally reported as £25,617 million in 2025-26, and budgeted as £28,793 million in 2026-27, with local authorities continuing to remain under-borrowed.

Background

The Local Government 2025-26 Provisional Outturn and 2026-27 Budget Estimates publication summarises the 2025-26 provisional outturn and 2026-27 budget estimates for revenue and capital services provided by local authorities. This data is collected from local authorities annually via the Provisional Outturn and Budget Estimates (POBE) statistical return.

Further information on Local Government Finance statistics publications and data collections can be found on the Scottish Government website.

These statistics have been produced in accordance with the Code of Practice for Statistics.