Thursday June 11th 2026
Glasgow City Chambers
Written by Glasgow View Reporter, Liam Eunson
Funding for councils is failing to keep pace with rising costs and demand despite a small real terms increase in funding, the Accounts Commission revealed today in a new report.
Scottish Councils’ revenue funding from the Scottish Government has overall gone up by 2% but the Accounts Commission has highlighted that much of the funds are used to cover existing commitments such as teachers’ pay increases.
Overall, Scotland’s councils face managing a budget gap of around £529 million for their 2026/27 daily operating costs – around three per cent of their revenue funding. And, with capital funding down by 15%, the Accounts Commission explained that this means councils will have to borrow more to build houses and other infrastructure, which heightens long-term finical risk.
Every local authority across Scotland increased council tax by an average of 7.7% for 2026/27, which should raise an extra £248 million. Alongside this, councils expect to bring in around £1.2 billion from fees and other charges, such as leisure centres and sone refuse services.
The Accounts Commission also highlighted that councils also plan to make savings of around £1780 million nationwide, bit these savings could increasingly affect services people rely on.
Across the country, social care makes up a high proportion of council spending and increasing demand for these services will only put major pressure eon local budgets.
Anticipated reductions in Scottish Government funding over the medium term are expected to intensify these pressures and increase the risk of councils becoming financially unsustainable.
Derek Yule, a member of the Accounts Commission, explained:
‘As things stand, councils will continue to face increasing financial pressures unless they stop, reduce, or significantly redesign services.
‘Savings options are limited and will have to increasingly focus on changes to services people rely on. That makes it essential that councils talk to their communities about the difficult decisions they are facing.’
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