Our challenges
East Lothian Council is facing significant challenges due to rising demand, cost pressures, and wider economic issues. As one of Scotland’s fastest-growing council areas, the council is required by central government to identify sites for new housing development and set targets for the number of houses to be built over a given period. According to National Records of Scotland 2018 projections, the population of East Lothian is expected to increase by 15% to 121,743 by 2043. By 2040, there will be an estimated 68% increase in the number of people with dementia compared to 2022. The P1 to S6 school roll is projected to rise by 13.1% from 15,092 in 2022 to 17,067 in 2032.
Analysis from the Scottish Parliament Information Centre (SPICe) of the provisional 2025-26 local government finance settlement shows that East Lothian receives the third-lowest funding settlement in Scotland per head of population, at 81.4% of the Scottish average. Although the county’s government funding for 2025/26 has increased by around 5%, much of this is allocated to meet national policy commitments and will not cover ongoing cost pressures, including the rise in employer national contributions, which are not fully funded. Changing demographics, growing demand for statutory services, and increasing national policy expectations mean that the gap between available funding and expenditure requirements continues to grow, alongside other pressures facing the entire public sector.
Despite these significant challenges, the budget for 2025/26 enables the council to continue investing in priority areas such as adult social care, children’s services, and education. While the 2025/26 proposals will allow the council to deliver a balanced budget, a five-year funding gap of £79.718 million remains for the authority and Integration Joint Board to 2029/30. Considering planned savings and council tax increases, this gap reduces to £45.911 million during the same period. Officers will continue to develop a range of options to meet the future funding gap, incorporating effective and meaningful engagement with the public and other key stakeholders.