Orkney Islands Council is to recieve an increase of 10.9% in Scottish Government funding if the 2025/26 Draft Scottish Budget is passed in the Scottish Parliament. This is the largest % increase for any of Scotland’s Local Authorities.
Finance Secretary in the Scottish Government Shona Robison said:
“Local authorities provide some of the most important services to our communities – from schools to social care – which is why we’ve increased their funding by more than £1 billion compared with last year’s Budget.”
“The settlement is the result of meaningful budget engagement with COSLA and Councils. While council tax decisions are a matter for individual local authorities, with record funding of over £15 billion there is no reason for big increases in Council Tax next year.
“This is a Budget that will deliver increased funding for schools, social care and other vital council services. But this funding will only reach communities if the Budget passes, so I am asking Parliament to unite behind it.”
Orkney’s funding will rise from £95.6million in 2024/25 to £106million in 2025/26 an increase of £10.4million.
Orkney Islands Council is currently running a public consultation on changes it proposes to make to the services it provides locally:
COSLA, the organisation which represents all of Scotland’s Local Authorities welcomed the increase in funding for Local Government but reminded that it comes within the continued financial challenge for public services.
COSLA also raised the significant concerns it has over the UK Labour Government’s rise in National Insurance employers contributions.
The Secondary Threshold of National Insurance is currently set at £9,100 a year, and will be reduced to £5,000 a year. The Secondary Threshold of £5,000 a year will be in effect from 6 April 2025 until 5 April 2028. Thereafter the Secondary Threshold will be increased in line with Consumer Prices Index (CPI). The OBR (Office for Budget Responsibility) judged that the increase in costs to businesses would lead to lower wages and profits. Around 250,000 employers will see their Secondary Class 1 NICs liability decrease and around 940,000 will see it increase. Around 820,000 employers will see no change.
Charities are not exempt from the rise in National Insurance. The Third Sector is an important provider of services locally especially in helping elderly and vulnerable islanders.
The voluntary sector is already facing significant challenges including the rise in energy costs. It employs around 133,000 people in Scotland – 5% of Scotland’s workforce. It delivers vital public services – like social care and youth work, as well as a host of essential services that people and communities across Scotland rely on.
SCVO, the organisation representing Scotland’s voluntary sector, estimates that these changes to National Insurance will cost voluntary sector employers in Scotland £75 million per year, plus inflation. These additional costs put the sector’s essential services, jobs, and organisations at risk.
The Scottish SPCA, Scotland’s oldest and largest animal welfare charity, estimates that the sudden cost they will face will be £400,000 per year.
The 2025-26 Local Government Settlement in the Draft Scottish Budget includes a £289 million increase in funding to be used by councils to meet local needs and £120.5 million additional funding for pay deals. The Budget also includes a one-off payment of £40 million to help councils respond to the climate emergency, and additional funding to support free personal care, teacher numbers and island communities.
| 2024-25 | 2025-26 | Increase | Increase | |
| Local Authority | £m | £m | £m | % |
| Aberdeen City | 454.2 | 494.9 | 40.7 | 9.0 |
| Aberdeenshire | 572.9 | 615.3 | 42.5 | 7.4 |
| Angus | 267.1 | 287.8 | 20.7 | 7.8 |
| Argyll & Bute | 242.0 | 259.5 | 17.5 | 7.2 |
| Clackmannanshire | 124.6 | 134.5 | 10.0 | 8.0 |
| Dumfries & Galloway | 370.4 | 397.2 | 26.8 | 7.2 |
| Dundee City | 377.2 | 398.9 | 21.7 | 5.8 |
| East Ayrshire | 303.1 | 322.3 | 19.2 | 6.3 |
| East Dunbartonshire | 252.0 | 274.9 | 22.9 | 9.1 |
| East Lothian | 237.3 | 258.2 | 21.0 | 8.8 |
| East Renfrewshire | 239.7 | 261.4 | 21.7 | 9.0 |
| Edinburgh, City of | 988.6 | 1,059.0 | 70.4 | 7.1 |
| Eilean Siar | 111.4 | 118.0 | 6.6 | 5.9 |
| Falkirk | 366.5 | 381.0 | 14.5 | 3.9 |
| Fife | 862.0 | 927.5 | 65.6 | 7.6 |
| Glasgow City | 1,591.0 | 1,679.1 | 88.1 | 5.5 |
| Highland | 582.1 | 621.0 | 38.8 | 6.7 |
| Inverclyde | 208.6 | 222.5 | 13.9 | 6.7 |
| Midlothian | 218.9 | 238.6 | 19.7 | 9.0 |
| Moray | 214.2 | 229.6 | 15.4 | 7.2 |
| North Ayrshire | 353.1 | 375.3 | 22.2 | 6.3 |
| North Lanarkshire | 813.4 | 869.7 | 56.3 | 6.9 |
| Orkney | 95.6 | 106.0 | 10.4 | 10.9 |
| Perth & Kinross | 337.7 | 364.2 | 26.5 | 7.8 |
| Renfrewshire | 416.5 | 452.2 | 35.8 | 8.6 |
| Scottish Borders | 272.5 | 292.2 | 19.7 | 7.2 |
| Shetland | 111.9 | 118.9 | 7.0 | 6.3 |
| South Ayrshire | 269.7 | 291.5 | 21.8 | 8.1 |
| South Lanarkshire | 742.7 | 805.8 | 63.2 | 8.5 |
| Stirling | 218.8 | 234.4 | 15.6 | 7.1 |
| West Dunbartonshire | 238.6 | 252.8 | 14.3 | 6.0 |
| West Lothian | 424.1 | 459.1 | 34.9 | 8.2 |
| Undistributed | 365.3 | 441.5 | 76.2 | |
| Council Tax | 144.0 | 0.0 | -144.0 | |
| Valuation Committee Top Slice | 0.6 | 0.9 | 0.3 | |
| SSSC Fees | 0.0 | 2.2 | 2.2 | |
| National Dog Database Top Slice | 0.1 | 0.1 | 0.0 | |
| Redress | 0.0 | 9.0 | 9.0 | |
| Climate Intelligence Service Top Slice | 0.9 | 0.9 | 0.0 | |
| Scotland | 13,389.1 | 14,258.1 | 869.0 | 6.5 |
Fiona Grahame
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