Scotland’s councils face ongoing financial, workforce, and demand pressures that have become embedded in the system and are approaching the limits of what they can achieve with current resources, according to the latest Local Government Benchmarking Framework Report.
The 14th annual National Benchmarking Overview Report looks at data from 2024/25. It finds that funding levels for councils have not kept pace with growing demand, inflation and expanding national commitments. Scottish Government funding for local government increased by 1.1% in real terms in 2024/25, and by 0.2% since 2013/14. In addition, almost a quarter of funding provided in 2024/25 was ringfenced or provided with the expectation that it would be spent on specific services. This, together with a growing set of statutory duties and new national policy commitments, is leaving councils with less freedom to respond to local needs.
Workforce challenges
Workforce pressures remain one of the biggest risks to service continuity. Staffing levels are below those of 20 years ago, while costs now represent nearly 70% of council spending. LGBF data shows that in 2024/25, staff absence levels reached the highest level recorded.
Recruitment and retention challenges are acute in social care, social work, planning and environmental health. An ageing workforce (over half of council employees are aged 45–64) presents succession risks.
More positively, national and local workforce planning is strengthening, with improved data use and modernised employment practices.
Health and social care
Demand for adult social care has continued to grow sharply. Since 2010/11, the over-65 population has grown by over 29%, which means more people in communities with increasingly complex needs.
Although expenditure has risen by 31% since 2010/11, most additional funding is absorbed by inflation and pay rather than expanded capacity. Capacity in the system remains constrained by workforce shortages, instability of care providers, and competing statutory demands that restrict councils’ ability to sustain or expand provision despite rising need.
Education
Education services show signs of recovery but continue to face growing complexity and workforce pressures. Although real terms spending has risen by 19.8% since 2010/11, additional support needs (ASN) have grown substantially, now affecting over 40% of pupils.
Primary attainment has surpassed pre-pandemic levels and poverty-related gaps continue to narrow. However, attendance remains below historic norms and a small but growing cohort of pupils experience entrenched non-attendance linked to anxiety and complex ASN.
Council performance
The sustained financial, demand and workforce pressures on councils threatens to reverse improvements in council performances in previous years. Whilst long-term gains are evident across many areas, including educational attainment, positive destinations, older people supported at home, recycling and carbon emissions, several areas that previously showed improvement are now stagnating or declining. These areas include planning performance and road condition.
More positively, innovation in the sector remains strong, with councils modernising services through digital tools, data-driven models, community hubs and cross-sector partnership working. Good practice continues to emerge through peer collaborative improvement and LGBF Practice Sharing events, helping councils to learn from each other and scale effective approaches.