back to Toolkit Contents page
Reading a council budget
Guidance on how to access and make sense of a local authority
Every year councils must publish audited accounts to allow the
public to examine how they both raise and spend their money. The
annual accounts are usually published alongside the annual report.
These documents can be obtained either direct from each council
or from their websites. If you are looking online for the annual
accounts, try checking any section on council finance if it is
not immediately obvious where the accounts are published.
There are two key elements within the annual accounts:- the capital
and revenue budgets. In general, the capital budget deals with
finances for the construction of new assets (such as new buildings
etc) while the revenue budget is mainly for day to day costs of
providing services (eg staff wages etc).
As well as publishing the annual accounts of previous years,
councils often publish budgets for future years, providing information
on council spending priorities for the year(s) ahead. Branches
can find future planned totals for all councils until 2011 on
the government website http://www.scotland.gov.uk/Topics/Statistics/18209/200811Settlement.
This is another useful source of information relating to how
much of their income councils intend to spend and whether or not
their reserves remain intact. The Accounts Commission advises
councils that they should hold 2% of reserves although there is
no specific accounting rule that this should be the case.
However, while most of a council’s budget is committed
to providing existing services, examining the accounts and budgets
may highlight potential sources of funding which could be used
to address cuts in other areas, or any short term, one-off spending
such as funding equal pay.
Of immediate value in a cuts campaign is the paper on the budget
that goes to the council budget setting meeting. This should of
course have been the subject of prior consultation with the trade
unions, but practice varies between councils. That paper should
identify not only the Scottish Government financial allocation
but also any anticipated fall in income (charges, land sales etc.)
It should also identify unavoidable commitments (exceptional
cost increases, employer pension contributions, new statutory
requirements, equal pay etc.) that in effect raise the base line
budget before other priorities are considered.
In some councils that paper may only cover the high level figures
(broad departmental allocations) and branches may need to ask
for more detail on how each department plans to make cuts. That
is where the detailed impact on members is likely to be found.
Each council presents its accounts in a different way. While
some may have the levels of reserves indicated in a review of
their finance at the beginning of their accounts, you may need
to examine the whole document to find the level of reserves held.
The main sections to check for this information are the Consolidated
Revenue Account and the Statement of Movement in Reserves.
Even if there is a significant level of reserves, it is not simply
an indication that a council has extra spending power available.
Often such reserves are held back for a specific or earmarked
issue and thus could not be easily realised for any other item.
Councils could also use some capital receipts as a one off source
of revenue to fund additional spending, so it is worth checking
the capital budget for any potential under-spends.
Branches should therefore look carefully at the last published
accounts and the draft budgets for the coming year – in
particular the balances and how they are allocated, income levels,
under-spends and the expenditure options being considered by the
Page updated: 5 February 2010
| Press Releases | Scotland