Yours Sincerely Hannah Axon Policy Manager COSLA COSLA, Verity House, 19 Haymarket Yards, Edinburgh EH12 5BH Telephone 0131 474 9200 Fax 0131 474 9292 Local Government Settlement 2026/27 #BUDGETREALITY Issued on 13 January 2026 REVENUE FUNDING for 2026/27 Revenue funding announced for 26/27: £15,002.3m Revenue funding provided for 25/26: £14,410.5m* Cash increase: £591.8m Uncommitted cash increase: £234.9m *finance circular 1/25 Scottish Government Commitments 25/26 £m LG Pay Deal year one contribution 79.7 Teachers Pay year one contribution across 25/26 and 26/27 47 Total £126.7m Already committed for 26/27 £m Real Living Wage 26/27 for Adult Social Care, ELC and Children’s Social Care 201 Additional Discretionary Housing Benefit 9.3 Homelessness Prevention Funding -7 Free Personal Nursing Care 7 Free School Meals – Pension Credit/AET Expansion 3 School Clothing Grant Inflationary Uplift and Educational Psychologists 0.5 Interisland Connectivity 11.4 Assessors – Mansion Tax 5 Total £232.6m TOTAL COMMITTED ADDITIONAL FUNDING £356.9m TOTAL UNCOMMITTED ADDITIONAL FUNDING £234.9m THE BUDGET REALITY IS THAT THERE IS £234.9m of ADDITIONAL UNCOMMITTED LOCAL GOVERNMENT CORE REVENUE FUNDING KNOWN REVENUE PRESSURES FOR 26/27 INCLUDE 3.5% PAY UPLIFT, INFLATION AND DEMAND PRESSURES OUR ASK: £16bn REVENUE including £750m for social care CAPITAL FUNDING for 2026/27 Capital funding announced for 26/27: £681.4m Capital funding provided for 25/26*: £779.6m Cash reduction: £98.2m Uncommitted cash increase: £0m *finance circular 1/25 Already committed for 26/27 £m Distributed to SPT 12.4 Assessors Portal 2.7 Active Travel 16.1 Total £31.2m Reduced funding for 26/27 Second year of Climate Emergency funding at reduced level -20 End of Coastal Change funding -5 Reprofiling Flooding Funding -60 End of Play Park funding -25 End of Nature Restoration Funding -2.5 Total -£117m TOTAL COMMITTED ADDITIONAL FUNDING £31.2m TOTAL UNCOMMITTED ADDITIONAL FUNDING £0m THE BUDGET REALITY IS THAT THIS A CASH REDUCTION IN CORE CAPTIAL FUNDING WHICH CAN BE ATTRIBUTED TO KNOWN CEASATION OR REDUCTIONS OF PREVIOUS FUNDING STREAMS.