A budget for ‘growth and public services’ – or a ‘massive con’?

Introducing his first Draft Budget, Derek Mackay unveiled a programme that will ‘improve public services, maintain and support jobs and ease the financial burden on families’, including:

• An additional £304 million in resource funding for the NHS, £120 million above inflation and a significant step towards the commitment of an extra £500 million above inflation over this Parliament
• £120 million for schools to use at their discretion to close the attainment gap in 2017-18 – £20 million more than previously announced – funded from Scottish Government resources
• Support for jobs by extending the number of business premises that pay no business rates through the Small Business Bonus Scheme to 100,000 and cutting the Business Rate Poundage by 3.7% for all business properties
• Through the proposed local government finance settlement and local taxation over £240 million of additional spending power to support local government services, with all revenues raised locally being spent locally by councils
• protection in real terms for the revenue budget for policing, £60 million of investment the workforce and infrastructure necessary to begin the radical and ambitious expansion in the provision of free early learning and childcare entitlement to 1,140 hours by the end of this Parliament

The Finance Secretary also announced investment in new and existing infrastructure projects, to support sustainable economic growth including:

• completing the Queensferry Crossing
• Over £470 million of direct capital investment to begin delivery of 50,000 affordable homes,
• Over £140 million for Energy Efficiency programmes to help us deliver our climate change targets
• Over £100 million investment in digital and mobile infrastructure, to improve digital connectivity, grow Scotland’s digital economy and increase digital participation, including support for our commitment to deliver 100 per cent broadband access by 2021.

Mr Mackay said: “Today I have published a Budget for growth and public services; for our environment and our communities. It delivers increased investment in education, record investment in the NHS, protects low income households from tax hikes and supports more and better jobs.

“This Budget provides support for the economy, for jobs and for household incomes, through a fair and balanced set of tax and spending proposals.

“Closing the attainment gap, reducing child poverty and ensuring equality of access to higher education, will generate long term benefits for our economy and public finances.

“That is why we are prioritising education and providing the resources to match. From birth and the earliest years, through school and beyond, education is this Government’s number one priority.

“This budget also delivers the Government’s commitment to secure the future of Scotland’s health service. I next year we will invest an additional £300 million in NHS resource budgets – £120 million more than inflation – a massive step toward our promise to Scotland’s health service.

“This budget also provides a strong settlement for local government. The measures I have announced today mean that the total support from the Scottish Government and through local taxation provides an increase in spending power on local government services, not of £59.6 million, but of £240.6 million or 2.3 per cent.

“Local government will receive £120 million from central government to fund our shared ambitions to close the attainment gap.

“In addition we will maintain councils’ share of capital spending with an increase of £150 million compared to 2016-17.

“Councils will keep the full value of the revenue from Council Tax re-banding – every penny raised locally will be spent locally as councils see fit. And local authorities will also be free to increase the Council Tax generally by up to 3% next year, generating – if they so choose – a further £70 million.

“The plans I have set out exercise our new powers responsibly, marking a significant step in the history of the Scottish Parliament. It is a Budget that holds fast to our programme, that delivers on our commitments and protects Scotland’s hard-won social contract.”

The Scottish Conservatives, the main opposition party at Holyrood described the Budget as a ‘shambles’ and a ‘massive con’, pointing out that Scotland will become the highest-taxed part of the UK and that £327 million will be cut from council funding, despite the Finance Minister’s claims he was no longer raiding local authorities to fund an initiative to close Scotland’s attainment gap.

Scottish Conservative shadow finance secretary Murdo Fraser said: “The finance secretary received an extra £140 million from the Treasury compared to the current year, plus an extra £800m for capital spending. He also has huge new powers over tax to deliver real growth in Scotland.

“However, Mr Mackay has chosen to hike taxes on families and businesses, risking a choking of economic recovery. That will only deprive Scottish public services of vital tax revenue.

“In not matching the UK increase in the threshold for the 40 per cent rate of income tax, the finance secretary is making Scotland the most expensive part of the UK in which to live, work and do business.

“The First Minister’s hand-picked chair of her Growth Commission, the SNP’s former economy spokesman Andrew Wilson, gets it when he says that the way to grow tax revenue is to grow the number of high earning tax payers. If the finance secretary won’t listen to us, will he at least listen to the First Minister’s own adviser, and think again on tax?

“When it comes to local government, this budget is quite simply a massive con on the people of Scotland. Nicola Sturgeon stood up in the chamber earlier today and tried to claim the budget would protect local services – but her finance secretary’s proposals show they are actually trying to pull a fast one on Scotland’s local services.

“They’re going to pay for a plan to fix their mess in education – but only by slashing the money they give to councils, the very people who are delivering education on the ground. Local councils face a real terms cut in their grant of more than £300 million. It’s taking away with one hand, in order to give a little back with the other – what a shambles.

“This is a Scottish Government which wants to make Scotland the highest taxed part of the United Kingdom. Scots will pay more, but in return get a shambolic mess on education and the NHS.

“If the SNP persists in taxing Scottish residents more than those from elsewhere in the UK, there is no way we can support this budget.

“Distracted by its plan for a referendum on independence, this SNP government is quite simply failing to deliver.”

Scottish Labour said it’s a budget ‘the Tories would be proud of.’ They said: “The SNP budget revealed a cut of £327 million to local authority budgets – the councils that run our schools, social care and other public services. That’s a real terms cut the year after the SNP slashed these budgets by half-a-billion pounds.

“We won’t vote for a budget that passes on austerity and we won’t stand back while public services are stripped to the bone. Labour will bring forward amendments to the Scottish budget to use the new tax powers of the Scottish Parliament to stop the cuts and invest instead.”

Trade Unions yesterday organised a lobby of the Scottish Parliament to press the case for no cuts to local government funding, but local government umbrella body COSLA is disappointed with the Scottish Government’s proposals.

Commenting on the budget statement, COSLA President Councillor David O’Neill said: “COSLA can never endorse a reduction to the core local government settlement as announced as part of the budget statement today.

“It is our understanding that the Scottish Government had significant additional cash for 2017/18 and therefore this decision will impact on services delivered by local government.

“We fully recognise that the Scottish government has made efforts to improve the settlement through their offer of a wider package including a major change on the council tax proposals. COSLA had lobbied the Scottish Government on their previous proposal and we are pleased that the Scottish Government has acknowledged this.

“Councils will now consider the whole package as part of their budget considerations and COSLA remains committed to working with Scottish Government across the range of common interests including public service reform.”

For more information on the Draft Budget 2017-18 go to www.gov.scot/budget.