SCOTLAND'S COUNCILS FACE £530M COLLECTIVE BUDGET SHORTFALL

Scotland's councils face a collective budget shortfall of approximately £530m in the 2026-27 financial year, the Accounts Commission has warned. The spending watchdog said local authorities will have to "stop, reduce, or significantly redesign" services to manage the gap. A small rise in revenue funding has failed to keep pace with rising costs and demand, particularly in social care. The commission cautioned that forecast government cuts in coming years risk councils "becoming financially unsustainable".

The £529m gap represents around 3% of total revenue funding across Scottish councils, down from £647m the previous year. Individual shortfalls range from £86.7m in Glasgow City to £3.5m in East Lothian, with South Lanarkshire the only council reporting a surplus of £1.5m. The combined capital budget for local authorities has fallen by 15% this financial year, which the commission said would push councils towards greater borrowing. Every local authority in Scotland has raised council tax to help offset shortfalls, with increases ranging from 4% in Edinburgh to 10% in Aberdeenshire and Moray.

Those council tax rises are expected to generate around £248m, while fees and charges — including for leisure centres and some refuse services — are forecast to bring in a further £1.2bn. Local authorities are also planning £180m in service cuts, equivalent to approximately 1% of total revenue budgets. The Accounts Commission warned those cuts would "have to increasingly affect services people rely on". A Scottish Government spokesperson said it recognised the pressures on councils and would continue working with local authorities to maintain high-quality public services.