NHS, the economy and the low paid to benefit, says Scottish Government
COSLA welcomes recognition of local government concerns
Scotland’s NHS, the economy, public sector workers and the low paid will benefit from the Scottish budget, Finance Secretary Derek Mackay said yesterday as he confirmed he had reached an agreement that will see the financial plan passed at all stages by the Scottish Parliament. The
The budget takes steps to mitigate UK Government cuts, increases funding for the NHS by £400 million, invests in the expansion of early learning and childcare, delivers on our commitments to broadband, supports the building of 50,000 new homes, backs small businesses and innovation and provides essential funding for our frontline police and fire services.
The Finance Secretary also confirmed he will extend the Scottish Government’s commitments on public sector pay to ensure all public sector employees earning up to £36,500 receive a minimum 3% pay increase – meaning 75% of public sector workers, including NHS staff, will benefit from an inflationary pay rise.
As part of an agreement with the Scottish Green Party, the budget will now include a real terms increase in revenue investment for local authorities with local services benefitting from an additional £159.5 million of resource funding, and following discussions with Shetland and Orkney Island Councils, funding of £10.5 million will be made available to support inter-island ferry services in 2018-19 – with talks continuing on a long term solution.
Investment in Low Carbon infrastructure – which is already increasing from 21% of planned infrastructure investment in 2017-18 to 29% in 2018-19 – will continue to increase in each year of the parliament, with additional support made available this year for home energy efficiency, the exploration of new local rail services and the delivery of marine protected areas.
In addition, Mr Mackay confirmed that, following publication of the Scottish Government’s tax proposals in December, he would take steps to remove an anomaly that meant some higher rate tax payers saw their bills fall while others on slightly lower incomes saw a rise, due in part to changes in the personal allowance.
As a result, while 70% of taxpayers will continue to pay less next year than they currently do, 55% will pay less than they would elsewhere in the UK. All those earning above the new Higher Rate Threshold of £43,430, a 1% increase on the 2017-18 threshold, will see a modest increase in income tax. This distinct income tax policy will raise around £55 million and support an additional £420 million of investment in the Scottish budget.
Confirming the changes during the Stage 1 of the budget debate, Mr Mackay said: “As a parliament of minorities, we must work across the chamber to find compromise and consensus in order to give support, sustainability and stimulus to our economy and to our public services.
“This budget invests record amounts in our NHS, supports our efforts to improve attainment in our schools, invests in our economy with support for infrastructure, for broadband and for innovation, and supports our ambitions to tackle climate change.
“We are lifting the pay cap with a real terms increase in pay for the majority of public sector workers and we are supporting local services with a real terms increase for day to day spending and for long term investment, with an additional £170 million going into local services, on top of the £10.5 billion already proposed.
“Our changes to tax ensure Scotland has a progressive tax system – with 70% of taxpayers paying less next year than they do currently and 55% paying less than they would across the rest of the UK – while businesses benefit from support for investment.
“The changes I have announced ensure that people in Scotland will benefit from the best deal for taxpayers in the whole of the UK.”
COSLA said that the deal agreed between Derek Mackay and the Scottish Greens puts local government in an improved position over that of the proposed settlement in December. Adding that whilst it still does not remove the real financial challenges that Local Government is facing, the value of the essential services local government provides to our communities is better recognised.
COSLA’s Resources Spokesperson Councillor Gail Macgregor said: “First and foremost I am pleased that both Mr Mackay and the Scottish Green Party have listened to what COSLA has told them and that they have taken our concerns on board.”
“We had two significant issues running side by side. Firstly, the need to maintain essential services for our communities and secondly the ability to make a fair offer to our valued workforce.”
“COSLA, through our Fair Funding for essential services campaign, has been clear that Scottish Local Government should not remain the poor relation of the public sector.”
“The reality of the situation is that the deal agreed today puts local government in a better situation than in December and credit to the Scottish Greens for listening to, and acting upon, the case put forward by COSLA.
“There remain serious financial challenges ahead in several areas, an obvious one being public sector pay.
“COSLA made no secret of the fact that our original allocation from the Scottish Government fell some way short of where local government as a sector ought to be and I am pleased that this has been recognised and acted upon.
“That is why today, I give credit where it is due.”
The updated income tax proposals: Fact Sheet
The Draft Budget proposals have now been updated to reflect a 1% increase in the Higher Rate threshold:
| Budget Bill 2018-19 | ||
| Income Bands | Rate | |
| Starter Rate | £11,850* – £13,850 | 19% |
| Basic Rate | Over £13,851 – £24,000 | 20% |
| Intermediate Rate | Over £24,001 – £43,430 | 21% |
| Higher rate | Over £43,431 – £150,000* | 41% |
| Top Rate | Above £150,000 ** | 46% |
- Assumes individuals receive the standard UK Personal Allowance.
** Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000
ADDITIONAL LOCAL GOVERNMENT FUNDING ALLOCATIONS
| Local Authority | 2018-19 Shares of GAE plus SINA | 2017-18 Additional Funding | 2018-19 Additional Funding | Total General Revenue Grant | Support for Ferries
(Specific Grant) |
Total Additional | ||
| % | £m | £m | £m | £m | ||||
| Aberdeen City | 3.51 | 1.211 | 4.388 | 5.599 | 0.000 | 5.599 | ||
| Aberdeenshire | 4.86 | 1.676 | 6.071 | 7.747 | 0.000 | 7.747 | ||
| Angus | 2.18 | 0.751 | 2.723 | 3.474 | 0.000 | 3.474 | ||
| Argyll & Bute | 1.81 | 0.624 | 2.260 | 2.884 | 0.000 | 2.884 | ||
| Clackmannanshire | 0.94 | 0.325 | 1.177 | 1.502 | 0.000 | 1.502 | ||
| Dumfries & Galloway | 2.99 | 1.031 | 3.736 | 4.767 | 0.000 | 4.767 | ||
| Dundee City | 2.78 | 0.961 | 3.481 | 4.442 | 0.000 | 4.442 | ||
| East Ayrshire | 2.26 | 0.780 | 2.825 | 3.605 | 0.000 | 3.605 | ||
| East Dunbartonshire | 2.07 | 0.715 | 2.591 | 3.306 | 0.000 | 3.306 | ||
| East Lothian | 1.90 | 0.654 | 2.369 | 3.023 | 0.000 | 3.023 | ||
| East Renfrewshire | 1.97 | 0.681 | 2.468 | 3.149 | 0.000 | 3.149 | ||
| Edinburgh, City of | 7.77 | 2.682 | 9.717 | 12.399 | 0.000 | 12.399 | ||
| Eilean Siar | 0.76 | 0.262 | 0.948 | 1.210 | 0.000 | 1.210 | ||
| Falkirk | 2.91 | 1.004 | 3.637 | 4.641 | 0.000 | 4.641 | ||
| Fife | 6.83 | 2.357 | 8.540 | 10.897 | 0.000 | 10.897 | ||
| Glasgow City | 11.07 | 3.818 | 13.833 | 17.651 | 0.000 | 17.651 | ||
| Highland | 4.71 | 1.626 | 5.890 | 7.516 | 0.000 | 7.516 | ||
| Inverclyde | 1.52 | 0.523 | 1.897 | 2.420 | 0.000 | 2.420 | ||
| Midlothian | 1.65 | 0.569 | 2.061 | 2.630 | 0.000 | 2.630 | ||
| Moray | 1.73 | 0.595 | 2.157 | 2.752 | 0.000 | 2.752 | ||
| North Ayrshire | 2.68 | 0.925 | 3.353 | 4.278 | 0.000 | 4.278 | ||
| North Lanarkshire | 6.38 | 2.202 | 7.978 | 10.180 | 0.000 | 10.180 | ||
| Orkney | 0.71 | 0.245 | 0.889 | 1.134 | 5.500 | 6.634 | ||
| Perth & Kinross | 2.73 | 0.942 | 3.412 | 4.354 | 0.000 | 4.354 | ||
| Renfrewshire | 3.28 | 1.132 | 4.101 | 5.233 | 0.000 | 5.233 | ||
| Scottish Borders | 2.22 | 0.767 | 2.780 | 3.547 | 0.000 | 3.547 | ||
| Shetland | 0.80 | 0.275 | 0.995 | 1.270 | 5.000 | 6.270 | ||
| South Ayrshire | 2.11 | 0.728 | 2.638 | 3.366 | 0.000 | 3.366 | ||
| South Lanarkshire | 5.95 | 2.053 | 7.440 | 9.493 | 0.000 | 9.493 | ||
| Stirling | 1.77 | 0.609 | 2.208 | 2.817 | 0.000 | 2.817 | ||
| West Dunbartonshire | 1.77 | 0.610 | 2.208 | 2.818 | 0.000 | 2.818 | ||
| West Lothian | 3.38 | 1.167 | 4.229 | 5.396 | 0.000 | 5.396 | ||
| Scotland | 100.00 | 34.500 | 125.000 | 159.500 | 10.500 | 170.000 |
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