Financial terms explained

Aggregate External Finance (AEF)

This is allocated to each local authority by the Scottish Government to help finance the cost of services. AEF comprises Revenue Support Grant, Business Rate Income and Ring Fenced Grants.

Area committees

These are local groups which meet on a regular basis, bringing together council officers and local councillors to deal with planning applications and other local issues.

Audit improvement

This refers to the established system of reviewing council activities and identifying areas for improvement.

Base budget

The cost of existing policies/services before any changes are made to reduce or increase the level of service.


This sets out the cost of providing the council’s services based on its political priorities and enables financial control to be exercised during the course of the financial year.

Budget briefing papers
Reports provided to councillors and community councils giving an update on developments related to financial matters.

Budget surplus

The monies left over at the end of the financial year.

Business rate income

Money received from businesses through taxation.


This covers spending on fixed assets such as new schools, council buildings and vehicles. This does not take into account daily running costs, such as electricity and staffing, but would cover essential repairs that might increase the market value of the asset or lengthen its useful life.

Capital budget

The total cost of spending on fixed assets which the council proposes to undertake in a specified financial year. Capital projects are normally financed from the sale of existing assets, by borrowing over a number of years or from capital grants.

Capital Financed from Current Revenue (CFCR)

In some cases the buying of fixed assets will be funded by the revenue budget, which normally covers non-tangible expenses such as staff and daily running costs.

Capital Plan

This is a rolling programme reflecting council policy, area needs and capital funding available to spend on fixed assets. It is approved by the council’s Business Services Committee, a group of councillors involved in financial decision making.

Capital receipts

Income from the sale of fixed assets or funding granted for specific capital projects.


Concordat initiatives
An agreement by local authorities to deliver political priorities of the Scottish Government, such as the freezing of council tax.

Corporate Services

This is one of the five services of the council which includes those overarching functions supporting all other services. Finance, information communications technology, legal and governance, procurement, internal audit and customer services all come under this.


Convention of Scottish Local Authorities (COSLA)
COSLA is the representative voice of Scottish local government and also acts as the employers’ association on behalf of all Scottish councils.

Cost pressures

Where spend is in excess of current budget, these cost pressures put strain on the council’s budget.


The shortfall of income compared with monies spent.

Financing costs

The cost of financing assets, including loan repayments, interest charges, leasing charges and debt management expenses.

General Fund

The account into which the majority of the council’s income is received (including Revenue Support Grant, Business Rates and Council Tax) and out of which comes the majority of the council’s running costs. Housing expenditure and house rents are excluded.

Grant Aided Expenditure (GAE)

This is a figure that is calculated by the Scottish Government for each council. It assesses the council’s ‘need to spend’ in comparison to other councils.

Gross expenditure

The total cost of providing services before deducting income such as ring fenced grants, rents, fees and charges.

Housing Revenue Account (HRA)

An entirely self-financing account, being met by rents from council house tenants. It shows the expenditure and income associated with providing, managing and maintaining the authority’s stock of public housing.

Manifesto commitments

The various priorities of political parties to meet the goals they set prior to elections.


Senior officers
Those members of council staff involved in supporting councillors by providing service-specific information and expertise.

Revenue budget
The proposed total spend on daily running costs, such as electricity and staffing. It is agreed by councillors in February each year.

Revenue expenditure

The daily running costs of services, such as electricity and staffing.

Revenue Support Grant (RSG)

The main funding received from the government to help pay for council services. The level of grant received is notified from the government on an annual basis.

Ring- fenced grants

Grants from the Scottish Government which must be spent on the provision of a particular service or project.

Strategic management team
A group of the most senior officers who may be responsible for directing one of the council’s five services.

Geographical areas agreed nationally which councillors are elected to represent.

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