FINANCE Secretary John Swinney has announced a review of the funding formula for local authorities which could give Edinburgh a major cash boost.
His announcement came as figures revealed the Capital is set to become the council with the least funding per head of population within the next three years.
The city loses out under the current formula for sharing out funding between councils bec
ause the calculations give particular weight to poverty and deprivation, which benefits Glasgow.
Mr Swinney said the review was to ensure the formula was "fair and robust".
Figures released in a written parliamentary answer, detailing projected grants for local authorities, show that by 2010, the Capital will be receiving £1935 per head – a massive £815 less for every person than top-of-the-table Glasgow and taking Edinburgh below Aberdeen, currently the council receiving least.
But the figures do not take into account the new Capital City Supplement, which Mr Swinney has promised to introduce next year in recognition of the special pressures on Edinburgh's coffers.
He told the Convention of Scottish Local Authorities conference in St Andrews yesterday that co-operation between the Government and councils was working well.
And he said: "We have also agreed jointly to review the distribution methodology for the local government funding settlement."
City finance convener Gordon Mackenzie welcomed the announcement. He said: "We will be in there arguing the case for Edinburgh. If we are about to come bottom of the heap, the only way is up."
He said the figures on funding per head highlighted the need for Edinburgh to retain more of the income it generated.
"There is the Capital City Supplement which the Government is going to bring in next year which will help to address the distinct differences between Edinburgh and elsewhere," he added.
"But there does need to be a look at the funding formula. Edinburgh needs additional investment to cope with the additional pressures success brings."
No figure has yet been attached to the Capital City Supplement, which was conceded by the SNP after pressure from Independent Lothians MSP Margo MacDonald during the Scottish Government's budget process.
But discussions have started between council and government officials on the details of the supplement.
And Cllr Mackenzie said he hoped the talks would reach a conclusion in the summer ahead of planning for the following year's budget.
A Scottish Government spokesman said Edinburgh City Council's increase in core revenue funding for next year was the fourth highest in Scotland – 7.8 per cent, compared to the Scottish average of 4.6 per cent.
He added: "We understand extra demands are placed on the capital city and we believe it is time for a Capital City Supplement. We will make provision for that in the 2009-2010 budget.
"Local government funding takes account of a range of factors and we have agreed with Cosla to review the way we calculate and distribute local government funding."
The full article contains 499 words and appears in Edinburgh Evening News newspaper.
