Tag: funding

LGIU: 2026 State of Local Government Finance in Scotland

No improvement to the financial sustainability of councils across Scotland with seven in ten saying they will be unable to balance budget within five years

The latest research from the Local Government Information Unit’s (LGIU) third annual State of Local Government Finance in Scotland report reveals that all councils who responded will be increasing council tax and decreasing their spending on services this year.

Yet, despite utilising these and other available measures, the new research found that seven out of ten senior council figures believe they won’t be able to balance their budgets within the next five years, and not one respondent expressed confidence in the sustainability of local government finance.

Chief Executives, Leaders and Directors of Finance representing 81% of Scottish local authorities took part in the research, which paints a picture of a sector pulling out all the stops available to them to respond to rising service needs with ever-diminishing resources. These responses provide an unparalleled look into the view from the inside when it comes to managing local government finances.

Adult social care once again topped the table for both immediate and long-term pressures that council finances face, and the majority of councils want more powers to raise revenue, including the freedom to levy other local taxes. Seventy per cent also supported a local share of national taxes being made available.

Some of the other key recommendations from the report include enshrining in legislation the principles of the Verity House Agreement as well as a full-scale review of local government finance, including sources of funding, the formulae for distribution, and the place of local government in the wider public sector.

A full list of recommendations from the report can be found below. 

Jonathan Carr-West, Chief Executive, LGIU, said: “Local government finance in Scotland is still not fit for purpose. Despite recent changes, the underlying problems that threaten councils’ financial sustainability have not been resolved. 

“Financial pressures on councils continue to move in only one direction as service demands increase and local leaders have ever-diminishing budgets with which to respond. Local government is in a precarious position. With 70% of respondents indicating that they are close to effective bankruptcy, something has to give very soon.

“Our latest research, released as we approach the 2026 Scottish Parliament election, serves as a stark warning: councils overwhelmingly feel their current funding situation jeopardises their ability to protect vulnerable citizens, increases the risk of insolvency, and diminishes the quality of life in their communities.

“However, this negative trajectory is not inevitable. Councils across Scotland are ready and willing to collaborate with the Scottish Government to implement meaningful and lasting reform. Our research clearly defines the necessary changes and presents the sector’s solutions for achieving them. 

“While the complexities of local government finance mean there is no single simple fix, the sector shares near-universal agreement on the problems and offers a wealth of ideas on how they can be solved.”  

Summary of key recommendations

1) An agreed national convention between the Scottish Government and local government to outline procedures and actions for councils that are unable to pass a balanced budget. 

2) The next Scottish Parliament should agree to implement and enshrine in legislation the principles of the Verity House Agreement, and commit to an annual review by the Scottish Parliament covering the key principles.

3) In this election year, parties should commit to a full-scale review of local government finance, including sources of funding, the formulae for distribution, and the place of local government in the wider public sector. 

4) Scottish and local governments should be brought together in a standing commission or representative body, which should be defined in statute with a key role in pre-budget engagement processes, negotiation of the funding settlement, and any and all decisions that have an impact on councils.

The exact responsibilities and membership of this body should be a matter for future discussions, but should at a minimum include ministerial representation, and local elected representatives and senior officers from local government. 

First Minister announces additional funding for community projects

Supporting mental health and tackling loneliness

First Minister John Swinney has announced additional funding to help people with their mental health. A further £3 million will be made available so people can get early help close to home to improve their wellbeing and tackle loneliness.

Since 2021, more than 6,100 grants have been awarded from the Communities Mental Health and Wellbeing Fund for Adults to projects, including those that deliver:

  • support groups for people with long-term health conditions
  • walking, cycling and fitness sessions to reduce stress
  • arts and music programmes to build confidence and social connection
  • befriending services for older adults and carers

The additional funding was announced by First Minister John Swinney ahead of a visit to the EATS Rosyth community hub and garden.

The First Minister said: “I am pleased to announce a further £3 million from the Scottish Government for projects to help people with their mental health and wellbeing.

“This investment reflects our commitment to healthcare that delivers prevention and early intervention, supporting people before they reach crisis point and prioritising those who are most at risk.

“Local support for people who need a bit of extra help with their mental health is really important – projects close to home in familiar settings are often where people feel the safest and most comfortable.

“Offering that kind of support is particularly important at this time of year, which many find difficult. But the festive season also reminds us of the importance of kindness, compassion, and caring for one another.

“Getting outside and spending time in the fresh air can really improve our physical and mental wellbeing, and the Fund that I am announcing today has supported projects that support people to do exactly that.

“After seeing the new community hub, I am looking forward to visiting the EATS Rosyth garden to see how local people are benefitting from the chance to enjoy valuable time outdoors.”

With the additional £3 million investment, total funding from the Communities Mental Health and Wellbeing Fund for Adults in 2025-2026 will be £18 million, and the total provided by the Fund since 2021 will be £84 million.

Funding secures theatre’s future

Cumbernauld Theatre Trust receives £150,000

The Cumbernauld Theatre Trust, in North Lanarkshire, has been awarded £150,000 transition funding from the Scottish Government to help secure its future.

The funding will ensure the future of the Theatre as a going concern, so that it can continue its cultural programme and community work, while taking steps to enhance its financial sustainability and operations.

Cumbernauld Theatre Trust was the only was the only organisation to lose regular funding when Creative Scotland announced successful bidders for Multi-Year Funding in January, as a result of its application which was unsuccessful.

A record number of cultural organisations were successful in applying for Multi-Year Funding, following a £34 million increase for culture in the arts in the 2025-26 Scottish Budget. Over half of these organisations were awarded multi-year funding for the first time, and all successful applicants who previously received regular funding got a significant uplift.

Culture Secretary Angus Robertson said: “The Cumbernauld Theatre is an important cultural asset for North Lanarkshire and the wider culture sector in Scotland.

“As a result of its failure to secure Multi-Year Funding, the Trust faced a critical funding gap for 2026-27, which would have required the Trust to consult on redundancies.

“Given the Theatre’s significance to the community and in order to protect the sector-specific skills it provides employment opportunities for, the Scottish Government has agreed to support the Trust with £150,000 in grant funding over 2026-27, and a potential further £150,000 in 2027-28 – subject to the Trust demonstrating its sustainability issues are being resolved.

“This funding should enable the Trust to move beyond a challenging period and take the necessary steps to secure Cumbernauld Theatre’s future.”

Alan Caldwell, Chair of Cumbernauld Theatre Trust said: “We are incredibly grateful to the Cabinet Secretary Angus Robertson and the Scottish Government for our constructive conversations over the last few months and today’s announcement of its strategic investment in the future of this important cultural organisation.

“Their grant of £150,000 in 2026/27 and a potential further award in 2027/28 allows the Trust time to plan for a long-term sustainable future, while continuing to deliver its valuable work for residents in an area of Scotland which is under-served in terms of cultural and community opportunities.”

Creative Scotland has also agreed to give Cumbernauld Theatre Trust £99,557 in support of a programme of community engagement and work celebrating the town’s anniversary over the course of 2026.

BACKGROUND:

Multi-Year Funding Outcome Announcement | Creative Scotland

myf—organisations-awarded-funding-updated-february-2025Download

Essentia Foundation invests record £3.5m in Scotland’s young people

Hundreds of young people across Scotland have benefitted from a record £3.5 million investment from the Essentia Foundation across 2025. 

This total includes their largest funding commitment to date, with £2 million recently awarded to eight leading charities across the country.

Funding will support these organisations to deliver programmes tackling youth unemployment, poverty, poor mental health and barriers to education.

Each of the eight charities, including Edinburgh-based Children First and Bethany Christian Trust, has received £250,000, enabling ambitious projects that are helping young people build resilience, develop new skills, and take steps towards brighter futures.

This major investment comes at a critical time. Young people have been disproportionately affected by recent crises, from the long-term effects of the pandemic to the pressures of the continuing cost of living crisis.

Many continue to face the lasting consequences of disrupted education and social development, alongside limited opportunities in training and employment.

Combined with ongoing mental health challenges and persistent inequality, these barriers mean that support for Scotland’s young people is more urgently needed than ever.

Brian Davidson, Trustee and Chairperson of the Essentia Foundation, said: “Scotland’s young people are facing some of the toughest challenges in generations, and the need for support has never been greater.

“These eight charities are already making a real difference in communities across the country. This funding will help create opportunities, build resilience, and give young people the skills and confidence to thrive.

“The impact of these projects will last well beyond the life of the programmes themselves, and we hope it also sparks further support from others who want to see Scotland’s young people flourish.”

Other grant recipients of £250,000 each from the Essentia Foundation include:

  • Aberlour Childcare Trust
  • Cyrenians
  • Sistema Scotland
  • The Outward Bound Trust
  • The King’s Trust
  • The Venture Trust

These awards, alongside the additional £1.5 million that has been distributed this year by the Essentia Foundation, underpin its commitment to support young people across Scotland through initiatives focused on wellbeing, education, skills development, and opportunities for employment.

The awards also mark a milestone moment for the Essentia Foundation itself. The Foundation has confirmed it will now wind up its activities, leaving a £1.5 million legacy fund to be administered by long term partner Foundation Scotland, who have been supporting the Essentia Foundation since 2017.

Helen Wray, Head of Philanthropy & Quality, Foundation Scotland said: “We are honoured to continue Essentia Foundation’s legacy through the new fund. For the last eight years, our team has had the privilege of working alongside Essentia to ensure its resources reach young people who need them most.

“This next chapter will see us build on that partnership by supporting grassroots organisations across Scotland.

“We look forward to helping smaller charities deliver vital opportunities that improve wellbeing, education and future prospects for children and young people, ensuring Essentia’s legacy and impact endures for years to come.”

This future programme will provide small grants to grassroots charities, ensuring Essentia’s mission of supporting children and young people continues well into the future.

For more information visit https://tinyurl.com/FoundationScotlandEssentia

COSLA calls for urgent action to address Scotland’s crisis in social care

Councils Leaders have issued a stark warning about the growing crisis in social care, urging the need for social care funding to be a clear and focused national priority.

Following a meeting of Council Leaders, COSLA’s Health and Social Care Spokesperson Councillor Paul Kelly said: ‘Social care underpins everything we value most within our communities – from dignity in later life, supporting people in their unpaid caring roles, to enabling people to live independently and participate fully in society.

“Local Government has consistently prioritised social care, protecting budgets where possible and working tirelessly to maintain services despite severe and well-evidenced financial pressures.

“But Local Government cannot do this alone. Demand is increasing, costs are rising, and the workforce is under immense strain. Without fair and sustainable funding, we risk the viability of services that people rely on every single day.

“Local Government is doing everything possible to sustain vital care and support services, but without urgent investment from Scottish Government to enable us to commission and deliver more care, the system is at breaking point. That is why as part of COSLA’s manifesto we are calling on the next Scottish Government to invest £750m into social care services.

“We urge a national focus on addressing the workforce and financial crisis social care is experiencing, to ensure those who need support are not left without the help they need to live fulfilling lives.”

COSLA, Scottish Government, care providers, and system leaders had been meeting in the first half of 2025 as part of the jointly convened Financial Viability Response Group to address risks and impacts of funding challenges across the health and social care sector.

Cllr Kelly continued: ‘It is crucial that we reconvene the social care Financial Viability Response Group immediately.  

“We urge the Scottish Government to engage with us and our valued partners in the third and independent sector through the work of the Group to address the financial and workforce crisis in social care.”

COSLA’s 2026 Manifesto calls for sustainable finance for local services, including calling for an additional investment of £750m for social care: 

COSLA-Manifesto-2026v2 (1)Download

https://www.cosla.gov.uk/manifesto

Audit Scotland recently published a briefing on Local Government budgets for 25/26, which reported a projected revenue budget gap in 26/27 for 31 councils of £528m.

Improving health through prevention

Funding digital type 2 diabetes programmes

A new Scottish Government programme is expected to prevent up to 4,000 people from developing type 2 diabetes.

The £4.8 million investment will offer education and virtual, app-based, individual consultations with nutritionists, dietitians and health coaches via the Accelerated National Innovation Adoption (ANIA) initiative to fast track proven healthcare innovations.

By focusing on prevention, this will reduce future health complications for patients, improve quality of life and ease long-term pressures on the NHS.

Health professionals in primary or secondary care will refer suitable patients soon after diagnosis of pre-diabetes or history of gestational diabetes – increasing equity of access to NHS services across Scotland – and self-referral will also be available.

Meeting frontline staff and patients at Pennywell All Care Centre in Edinburgh, Public Health Minister Jenni Minto said: “We want to improve access to treatment in the community, enhance preventative services and maximise the opportunities of digital innovation through our Service Renewal and Population Health Frameworks. This will deliver a sustainable and high quality health and social care system for the future.

“This digital programme reduces the need to travel to in-person appointments and helps patients make sustainable changes to their diet and lifestyle and prevent progress towards type 2 diabetes. It enables rural and urban communities to easily access services which can have a life-changing impact.

“It is a prime example of transformative innovation that benefits frontline staff and patients alike and supports our health and care service to meet the challenges it faces.”

The three-year programme will enable up to 15,000 people at risk of type 2 diabetes to access nine months of digital diet and lifestyle change advice through ANIA – with up to 4,000 of those expected to avoid the condition.

Director of Innovation and Transformation at NHS Lothian Jenny Long said: “Over the past five years, NHS Lothian’s dietetic service has successfully delivered both the diabetes remission and award-winning prevention programmes, supported by permanent Scottish Government funding.

!Their success has led to further investment in digital innovation via the Accelerated National Innovation Adoption (ANIA) pathway.

“New digital services will improve patient access and outcomes across the region, enabling direct referrals from primary care and reducing waiting times.”

The ANIA Pathway, funded by the Chief Scientist Office and led by the Centre for Sustainable Delivery, is designed to fast-track proven innovations into frontline healthcare across Scotland. By identifying, assessing, and implementing new health technologies with strong evidence and impact, ANIA ensures patients across Scotland benefit from the latest advances in care.

Head of Innovation at the Centre for Sustainable Delivery Jason White said: “This programme represents a major step forward in the delivery of preventative healthcare across Scotland.

“It will empower people with pre-diabetes via easily accessible technology to make meaningful lifestyle changes that will significantly reduce their risk of developing type 2 diabetes.

“The Centre for Sustainable Delivery is proud to support this initiative through the ANIA programme. It’s a scalable, evidence-based solution that will support people to improve their own health and wellbeing over nine months.

“It will improve patient outcomes and reduce demand on NHS services through reducing the growth of type 2 diabetes across Scotland.”

There are 310,000 people living with type 2 diabetes in Scotland, representing more than 5% of the population. In 2023, more than 25,000 new cases were diagnosed and the number is predicted to reach 420,000 by 2044.

Type 2 diabetes | NHS inform

Short term measures ‘not addressing gap in public sector finances’

The Scottish Government recorded a £1 billion underspend in 2024/25 but still needs to move away from short-term measures to address a stark forecast gap between its spending plans and funding.

The underspend was supported by over £2 billion of additional funding from the UK Government, meaning a plan to help balance the budget with £460 million of offshore wind leasing revenues was not needed.

Significant pressures remain in achieving financial balance in 2025/26, and many of the necessary savings identified and delivered so far are non-recurring. This continued short-term approach to managing spending is not supporting the fiscal sustainability of the Scottish public sector.

The Scottish Government’s latest Medium Term Financial Strategy projects a combined resource and capital funding gap of £4.7 billion by 2029/30. This is due to policy choices and higher workforce costs. However, the government’s plan to make savings over the next five years lacks detail on how they will be delivered.

Stephen Boyle, Auditor General for Scotland, said: “Although the Scottish Government reported a £1 billion underspend this year, it did so from a combination of additional funding from the UK Government and one-off savings.

“A forecast gap of nearly £5 billion remains between what ministers want to spend on public services and the funding available to them.

“The Scottish Government needs to prepare more detailed plans setting out how it will close that gap by the end of the decade.”

Supporting young people onto the right path

£150,000 to fund grassroots youth services

Measures to help re-engage young people from low-income backgrounds with school and address anti-social behaviour have been announced by Higher and Further Education Minister Ben Macpherson.

Third sector organisation Youth Scotland will deliver a £100,000 investment in grassroots youth work to secure safe spaces for young people, helping them overcome barriers to learning and develop skills.

In addition, £50,000 has been made available to YouthLink Scotland to support measures that focus on improving school attendance and positive behaviours.

Announcing the support at Scotland’s National Youth Work Conference yesterday, Mr Macpherson said: “We want to see further investment in projects and initiatives supporting young people from communities impacted by criminal activity and anti-social behaviour, to help them take a different pathway and develop positive skills they need for learning, life and work.

“I have seen the demonstrable difference that youth workers can make in helping to divert young people away from negative paths, and instead towards positive behaviours and destinations.

“Youth work can prevent violence and anti-social behaviour before it starts, by offering trusted relationships, safe environments, and positive role models, and often reducing risky harmful behaviours from escalating.

“Youth workers support young people to build confidence and resilience, and develop skills to navigate challenges, reach their full potential, and positively contribute to their communities.” 

SCVO: Value of charity donations down by 30% in five years

SCVO analysis shows individual giving fell in real-terms by more than £240 million in 2023  

The value of charity donations is down by almost a third in the past five years, new research from SCVO finds.  

The voluntary sector body’s new report, Individual Giving in Scotland: donations, legacies and fundraising, shows income from individual giving made up 15% of the Scottish charity sector’s income in 2023, down from around 20% in 2018 and previous years. 

Individual giving from the general public was worth an estimated £1.2bn to Scottish charities in 2023. 

But the value of donations has fallen by 30% in real terms since 2018, while fewer individuals are donating to charity – although many who do donate are giving larger amounts. 

Most income streams from the general public were hit hard by Covid, and while many of these income streams have now bounced back, they have generally not recovered to pre-pandemic levels. 

Data from the Spring 2025 Scottish Third Sector Tracker suggests that a rising number of voluntary organisations saw positive growth in both donations and fundraising income, suggesting some reasons for cautious optimism despite the challenging financial environment. 

The voluntary sector body said the falling value of donations underlines the importance of the Scottish Government’s move towards Fair Funding.  

SCVO head of policy, Kirsten Hogg, said: “Individual giving is an important part of the complex patchwork of funding sources that Scotland’s voluntary organisations rely on, and these findings are really concerning – especially when combined with what we know about cuts in public sector funding and the increasing costs and demands that voluntary organisations are facing. 

“The cost of living crisis has hit individual giving hard, impacting on people’s ability to put their hands in their pockets – including for legacies, donations, fundraising and trading.  Over the same period, we saw a reduction in the number of people volunteering their time, and together these paint a worrying picture about the extent to which people are able to support charities and community groups.  

“While we remain hopeful that we may see a slight upturn in both donations and volunteering numbers, the resource difficulties that voluntary organisations are facing mean that many will continue to encounter challenges on a scale we’ve not seen before. 

“Scotland’s voluntary sector is a fundamental part of Scottish society, and demand for support is rising. Vital support continues to be delivered to every community in Scotland, and we must do everything we can to protect organisations from the pressures they are facing.” 

Claire Stanley, director of policy and communications at the Chartered Institute of Fundraising, said: “Charities across Scotland are working harder than ever to support the communities and individuals who need them.

“SCVO’s research highlights the difficult reality facing the sector right now, and we are hearing from our members that demand for services is increasing yearly – yet they are working with fewer resources while trying to deliver more. 

“And while it is encouraging to see many supporters giving generously, we know the cost-of-living crisis has hit people hard in recent years, and the overall drop in donations presents a significant challenge. That is why fair and reliable funding for charities is so important, to ensure that communities across Scotland can continue to count on the support they need, now and in the future.” 

1001 Critical Days Foundation funding boost for Bump Start programme

STEPPING STONES NORTH EDINBURGH and HOME-START EDINBURGH AWARDED £226,000 TO EXTEND EARLY YEARS SUPPORT SERVICE

The 1001 Critical Days Foundation has awarded its first £1m in grants to charities supporting babies and families across the UK.

Following a rigorous application process, six charities have been awarded a combined total of £1m in multi-year funding to deliver frontline services to families in community-based family hubs or similar settings. Up to 1,800 babies and their families are expected to benefit from this support.

Home-Start Edinburgh and Stepping Stones North Edinburgh have been awarded £226k over three years, and are the only Scottish recipeints of the fund. The funding will support and extend a collaborative support service, Bump Start.

Bump Start provides holistic, relationship-based support from pregnancy throughout early childhood, with the aim of reducing isolation, improving parental confidence, increasing capacity to provide nurturing care, and supporting positive mental health.

Eliza Waye, CEO of Home-Start Edinburgh, said: “We know the time from conception onwards is critical. With this funding, we can extend our partnership to deliver Bump Start with Stepping Stones North Edinburgh and reach even more families.”

The funding is expected to support around 320 babies through the project.

Morag Wilson, CEO of Stepping Stones North Edinburgh, said: “Bump Start has been a vital part of our organisation for over a decade, making a real difference in the lives of babies and their families.

“With support from the 1001 Critical Days Fund and a strengthened partnership with Home-Start Edinburgh, we’re excited to expand our reach and deepen our impact where it’s needed most.”

Founder of the 1001 Critical Days Foundation and Executive Chair of the Trustees, the Rt Hon Dame Andrea Leadsom said: “This is an incredibly proud moment for the 1001 Critical Days Foundation.

“These are our very first grant awards, and each of the six charities chosen has shown outstanding commitment to supporting babies and their families.

“Their applications were impressive, their impact is tangible, and I cannot wait to see the difference they will make in communities across the country. Together, we are determined that every baby should experience the best start in life.”

Speaking at the recent launch of the Foundation, its Patron, Lord David Blunkett, highlighted the integral role played by community-based charities.

Lord Blunkett said: “We’re not talking about professionals coming in and offering support – important as this is. But rather, mobilising the talent and strength of the community, no matter how deprived, to become part of the solution, not the problem.”

The six charities awarded funding represent geographies across the whole of the UK and offer a full spectrum of services to help give every baby the best start in life.

Home-Start Edinburgh will celebrate it’s 40th year as charity next year. It’s needs-based preventative work is delivered by highly skilled volunteers, supporting families with children under five years old.

Stepping Stones North Edinburgh is a voluntary organisation that provides support services to young parent families and pregnant women living in the north Edinburgh area.

The two organisations began partnering on the Bump Start programme in 2024. 

The five other charities that received funding are:

Literacy Volunteers

Nottinghamshire-based Literacy Volunteers delivers early language and literacy programmes in deprived communities, helping babies and young children build confidence, communication skills and a love of books alongside their parents.

They will use the grant funding to expand their “Learning to Love Books” programme in two family hubs based in communities where around 75% of families speak English as an additional language.

The For Baby’s Sake Trust

London-based charity, The For Baby’s Sake Trust, works with families to break the cycle of domestic abuse through long-term therapeutic, trauma-informed support, ensuring babies grow up in safe and nurturing environments.

The Oxford Parent Infant Project (OXPIP)

Based in Oxfordshire, OXPIP offers specialist parent-infant psychotherapy to strengthen the bond between parents and babies, supporting families facing trauma, postnatal depression, or disrupted attachment.

Thrive at Five

Thrive at Five is a national charity working to improve outcomes for children under five, ensuring they have the strong foundations needed for life and learning.

As a place-based charity working with communities facing hardship, Thrive at Five has been working alongside families and partners in Stoke-on Trent for just under five years. They will be using their funding to roll-out a pilot for Video Interaction Guidance with the goal of improving school readiness and long-term outcomes.