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Natural Disasters

Natural Disasters

Scottish Local Authority Support for Making Good Damage Caused by Certain Natural Disasters (SC10298)

Legal Context

In terms of Section 20 of the Local Government in Scotland Act 2003, Scottish Local Authorities may provide aid to make good damage caused by certain natural disasters.

Objective of the Scheme

The objective of the scheme is to make good the damage caused by earthquakes avalanches, landslides, floods, tornadoes, volcanic eruptions and wild fires of natural origin.

Eligible Costs

The eligible costs shall be those that are independently assessed as being necessary to make good the damage incurred as a direct consequence of the natural disaster. This may include material damage to assets such as buildings, equipment, machinery or stocks and loss of income due to the full or partial suspension of activity not exceeding 6 months from the occurrence of the disaster.

The calculation of the material damage shall be based on the repair cost or the economic value of the asset before the disaster. It shall not exceed the repair cost or the decrease in fair market value caused by the disaster, that is to say the difference between the property’s value immediately before and immediately after the disaster.

Loss of income shall be calculated on the basis of financial data of the affected undertaking (earnings before interest and taxes (EBIT), depreciation and labour costs related only to the establishment affected by the natural disaster) by comparing the financial data for the six months after the occurrence of the disaster with the average of three years chosen among the five years preceding the occurrence of the disaster (by excluding the two years giving the best and the worst financial result) and calculated for the same six months period of the year. The damage shall be calculated at the level of the individual beneficiary.

Aid Limitations

The aid and any other payments received to compensate for the damage (including payments under insurance policies) shall not exceed 100% of the eligible costs.


The estimated budget of the scheme is £2.5m over 5 years.


The scheme will operate from 1st January 2021 to 31st December 2025.

(ML / June 2021)