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Householders and businesses will benefit from Scotland's 2010-11 local government settlement.

John Swinney, Cabinet Secretary for Finance and Sustainable Growth, confirmed that:

• revenue funding to local government will increase by £308 million, or 2.9 per cent, on 2009-10 levels
• working in partnership with local authorities a further £70 million will be provided by Scottish Government for councils which freeze council tax for a third successive year, helping householders in a tough climate
• the business rates poundage for 2010-11 will remain in-line with England at 40.7 pence, the lowest national rate ever set for Scotland, giving Scottish businesses a saving worth almost £220 million

Mr Swinney said:

"Today's announcement maintains this administration's commitment to reverse the decline in councils' share of the Scottish budget and ensure local government goes on receiving an increasing share of the overall funding available to the Scottish Government.

"The settlement is good news for Scottish householders and businesses. By working in partnership with local councils and providing the funding for a third successive council tax freeze, we are easing the financial strain on households feeling the effects of these tough economic times.

"And, as we continue our efforts to position Scotland's economy for recovery, I am delighted that we are again keeping the business rates poundage in-line with England - the lowest national poundage ever set for Scotland. This will give our businesses a saving worth almost £220 million in 2010-11 and, when combined with other support we are providing, will give Scottish businesses a competitive advantage over other parts of the UK.

"The funding increase for councils next year would have been £174 million higher had it not been for the £500 million cut in the Scottish budget from Westminster. We welcome the commitment of councils agreeing to accept this share of the reduction and go on working with national government to meet our agreed commitments.

"While there are forecasts of further Westminster expenditure cuts, I know Scotland's councils, working with the Scottish Government, will continue to do all they can to protect and improve services the people of Scotland need and deserve."

Mr Swinney added that a joint review - undertaken with COSLA and including representatives from a cross section of Scotland's councils - of the existing needs-based mechanism used to distribute local government funding had identified no genuine anomalies that needed to be addressed in the medium term.

In confirming his acceptance of the joint review recommendations, Mr Swinney said:

"COSLA invited all 32 local authorities to identify and provide evidence of any anomalies across the range of indicators used in the needs-based distribution methodology. The review recommended that the existing indicators were considered to be reasonable and generally a fair indication of need and should be retained.

"If there are any major changes in Scotland's constitutional relationship with the UK we have agreed to look at the position again. But for now, the COSLA working group agrees that the current system remains fit for purpose."

The proposals outlined in the Local Government Finance Settlement are subject to the Scottish Government's budget receiving Parliamentary support in January.

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