As a Council, we are legally required to set a balanced budget each year. That means the money we receive from the Scottish Government, Council Tax and other sources must meet the cost of delivering services and ongoing investment to protect and improve communities.

Although we continue to face acute financial pressure, the Council agreed a budget for 2023/24 on Wednesday, 1 March. The budget will not only meet a substantial funding gap of £29m during the next financial year but also see us spend £428m to provide services to communities and invest £36m in capital projects.

Service	2022/23 Budget £'000	2023/24 Budget £'000
Children's Services	240,935	249,989
Social Work Adult Services	3,733	4,022
Place Services	35,892	36,718
Transformation, Communities & Corporate Services	46,391	40,696
Trading Accounts	(511)	-
Sub-Total	326,440	331,425
Integration Joint Board	89,112	89,948
Joint Valuation Board	1,458	1,494
Capital Charges	5,917	4,836
Total Net Expenditure	422,927	427,703
Aggregate External Finance	339,124	330,522
General Fund Reserves Applied	5,000	-
COVID Reserves	5,300	3,400
Trust Reserves	600	-
Service Concessions	-	15,290
Council Tax (see below)	72,903	78,491
Total Income	422,927	427,703

Council Tax	2022/23	2023/24
Estimated yield of £1 Council Tax	£57,197	£57,552
Council Tax (Band D)	£1,274.60	£1,363.82
Product	£72,903,000	£78,491,000

How will the budget be split

Service	£'000s
Childrens Services	249,989
Place Services	36,718
Social Work Adult Services	4,022
Transformation, Communities & Corporate Services	40,696
Integration Joint Board	89,948
Joint Valuation Board	1,494
Capital Charges	4,836

Education: £668.25

Adult Social Care (including the HSCP): £299.64

Children's Social Work: £103.68

Corporate Services: £103.51

Other Services & Costs: £63.46

Waste and Street Cleaning: £48.85

Sports, Culture & Leisure: £30.98

Roads & Grounds: £22.77

Libraries: £9.55

Supporting Businesses: £8.37

Joint Valuation Board: £4.76

Fees and charges

Some of our fees and charges will be increasing this year. Wherever possible we have aimed to keep these in line with inflation but some charges are higher because where possible we aim to cover the full cost of providing a service. Some new charges will be introduced.

To give a better idea of where our funding comes from and how we spend it, we've used information from the 2022/23 budget so you can see the cost and spend over a full year.

Revenue budget

Most of the Council's revenue budget comes from the Scottish Government as part of the Local Government Finance Settlement, with around 14% of funding in 2022/23 raised from Council Tax.

For a number of years, the funding received from the Scottish Government has not increased in line with inflation and savings have had to be found to help balance the budget. The Council's total revenue funding for 2022/23 was £518m, with the main funding streams summarised below.

Revenue Grant

This funding is received from the Scottish Government to support the cost of services provided by the Council. The funding includes a share of non-domestic rate income and makes up the most significant part of the Council's income.

Council Tax Income

Council Tax is a tax set by the Council to help fund services. The money raised through Council Tax contributed around 14% to the Council's revenue budget for 2022/23.

Specific Government Grants

These are grants received from the Scottish Government for specific purposes including early years provision, pupil equity funding for schools and criminal justice. This funding cannot be used to fund any other services.

Other Income

Other income includes a number of grant funding streams to help deliver services such as social care and those that help local people find a job or training opportunity to progress their careers. It also includes fees and charges for a number of areas, such as school meals, crematorium, parking and sport and fitness.

Reserves

The Council has a cash reserve to deal with unexpected events and circumstances. As part of the 2022/23 budget the Council decided to use £11m of these reserves to help prevent further reductions to service provision. However, over the long term, it is not sustainable to use cash reserves to meet everyday spending commitments because the cash will simply run out.

Source	£'m
Revenue Grant	308
Council Tax	73
Specific Grants	25
Other Income	101
Reserves	11

The Council groups the services it provides under four main areas.

Children's Services spends £258m on primary, secondary and special schools, early learning childcare, children's social care services and sports facilities.

The Falkirk Health and Social Care Partnership spends £127m on social care services, including home care and residential care. The Partnership has its own board, the Integration Joint Board, which decides how it should spend its funding.

Place Service spends £69m on a wide range of frontline services, including roads, waste management, planning and building standards, economic development, environmental health, parks and museums.

Transformation, Communities and Corporate Services spends £54m on central support services, including, accountancy, audit, legal, information, communications, technology, human resources and procurement. In addition to these support services, there are also teams delivering welfare benefits and debt advice, some housing related spend and the provision of libraries.

In terms of the Council’s overall expenditure, over 50% is spent on employee costs and 30% is paid to external providers, largely care provision for both adults and children.

Source	£'m
Children's Services	258
Falkirk Health and Social Care Partnership	127
Place Services	69
Transformation, Communities & Corporate Services	54
Borrowing Costs	10

Capital Budget

The capital budget covers the investment in the Council's assets, such as premises, vehicles and roads. The Council sets two capital budgets. One for housing and the other for the rest of Council Services (often called the General Fund).

Capital investment must be accounted for separately to the revenue budget (the day-to-day spend of the Council) and there are strict rules around this. Capital expenditure is funded by capital grants, receipts from asset sales and borrowing. The cost of borrowing has to be paid from our revenue expenditure, and this is expected to cost the revenue budget £10m for the current financial year.

The Council cannot use capital grants, receipts from assets sales or borrowing for day-to-day spend on revenue services. The Council cannot for example borrow money to help run schools or leisure facilities. Similarly, the Council cannot sell assets or use capital grants to pay for revenue costs.

The Council sometimes receives specific funding, for example Levelling Up Funding which is used for capital investment. This funding will usually be for specific projects and cannot be transferred to cover revenue costs or other capital investment.

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Housing

Falkirk Council has around 16,660 council houses that it rents out.

The Council has a separate housing account (this is often called the Housing Revenue Account or HRA). The Council receives income from housing rents that can only be spent on services for Council tenants. Legally the Council has to account for this money separately.

There is a separate capital budget for housing known as the Housing Investment Programme. Housing rents can be used to repay borrowing that is used to pay for large housing improvement projects. Housing services consult with their tenants separately on both the revenue and capital budgets.