While media political attention focused on Westminster for the latest installment of the Brexit Show and Mrs May’s no-confidence vote, the Scottish Government’s budget was debated at Holyrood on Wednesday.
The Scottish Government says a significant cash injection to health and care services and funding to help prepare Scotland’s economy for Brexit are at the heart of spending plans for the year ahead.
The 2019/20 Scottish Budget proposes an increase of almost £730 million in health and care services. This includes additional revenues generated by tax decisions that mitigate the shortfall in NHS funding promised by the UK Government.
Unveiling the spending plans in Parliament, Finance Secretary Derek Mackay also announced more than £180 million to raise attainment in schools.
The budget includes more than £5 billion of capital investment to grow and modernise infrastructure – including a new £50 million Town Centre Fund to support the future of our high streets.
Real terms increases in funding for local government, education, health and the police will support the transformation of our public services to meet new challenges, while investment in skills, social security and training will help ensure we deliver opportunity for all.
The Scottish Government says it will continue to deliver on its commitments to end homelessness and tackle child poverty, while investment in culture is also protected.
Mr Mackay also confirmed that the Scottish Government’s tax policy will ensure 55% of income taxpayers in Scotland will pay less than people earning the same income in the rest of the UK, while continuing to raise revenue to support investment in the economy and public services.
Mr Mackay said: “This is a budget of stimulus and stability. It delivers for today and invests in tomorrow and does so with fairness, equality and inclusiveness at its heart.
“It provides an increase of almost £730 million for our health and care services, invests more than £180 million to raise attainment in our schools and gives a vital boost to our economy through a £5 billion infrastructure programme.
“As a result of these decisions, we have been able to invest in essential public services, particularly the NHS, while ensuring 55% of income taxpayers in Scotland pay less tax than those earning the same income in the rest of the UK. Taken together with the personal allowance, 99% of taxpayers will pay less income tax next year on the same income.
“This budget delivers the public services, social contract and economic investment people expect while mitigating, where we can, the impacts of the UK Government’s policies of austerity and Brexit that are causing so much harm.”
Assessing the impact of ongoing uncertainty around the UK’s exit from the EU on this year’s budget, Mr Mackay added: “Our spending plans for 2019-20 include a commitment to mitigate the risks of Brexit as best we can, to enable our economy to thrive in any circumstances, now and in the future.
“It is disappointing that we are facing the prospect of having to revisit these plans in the event of a chaotic no-deal outcome. If leaving the EU can be avoided, those resources currently being directed towards essential preparations can be reinvested into our public services and economy.”
The 2019/20 Scottish Budget includes:
- More than £180 million in raising attainment in schools, including £120 million for head teachers to spend on closing the attainment gap
- Continuing to deliver a progressive income tax system
- A public sector pay deal that continues the journey of restoring pay levels and provides an above inflation pay uplift of 3% for those earning up to £36,500
- Providing the most generous package of business rates reliefs in the UK, and ensure more than 90 per cent of properties in Scotland will be charged a lower tax rate than other parts of the UK
- More than £600 million in colleges and maintain investment at more than £1 billion in universities
- Increasing direct investment in mental health by £27 million, taking overall funding to £1.1 billion, including improving mental health services for young people, and providing support in schools, colleges and universities
- Increasing investment in Health and Social Care Partnerships to more than £9 billion for delivery of primary and community health services
- Delivering new and improved social security benefits based on dignity and respect
- Providing local government with a real terms increase in both revenue and capital funding, and a real terms increase in total overall support, through a £11.1 billion settlement
- Almost £500 million to expand funded early learning and childcare, supporting the recruitment and training of staff and investment in building, refurbishment and extension of around 750 nurseries and family centres
- Initial funding of £130 million towards the establishment of a Scottish National Investment Bank
- Protect the police resource budget in real terms
- More than £20 million for zero waste, supporting the transition towards a more resource-efficient, circular economy, including design and implementation of a deposit return scheme
- £80 million for Active Travel to help build an Active Nation
- More than £825 million, as part of our total investment in excess of £3 billion to deliver 50,000 affordable homes over the course of the Parliament
- Continuing to invest in the £50 million Ending Homelessness Together fund
- More than £70 million in 2019/20 to drive forward sustainable and inclusive growth in the rural economy
Read full details of the Scottish Budget 2019/20.
Local government and trade unions have expressed both disappointment and frustration.
COSLA said it was disappointed that the value of the essential services provided by Scottish Local Government has not been recognised by the Scottish Government in Wednesday’s budget announcement.
COSLA went on to describe the proposed budget as a cash cut to Local Government’s core budget and said that as a priority would use the next few weeks to engage in meaningful dialogue with both Scottish Government and the wider Scottish Parliament.
Speaking this afternoon COSLA’s Resources Spokesperson Councillor Gail Macgregor said: “First and foremost my feeling is one of disappointment. Disappointment for councils, disappointment for communities and disappointment that Local Government’s role as a deliverer of vital services, an employer and a procurer has not been recognised.
“There is always smoke and mirrors around how those at the centre present their budget. The one message that the Scottish people need to take from today’s budget is that the Local Government’s core budget which provides our essential services has taken a hit.
“We have engaged positively with Scottish Government throughout these budget negotiations and we have run a positive campaign around the meaningful impact that our essential services make to communities throughout Scotland.
“The essential services that Local Government deliver are the foundations on which Scotland is built – today’s announcement means that these foundations are under severe pressure.”
COSLA President Councillor Alison Evison said: “Whichever way you want to dress it up, the reality of the situation is that yet again the totality of the essential services Councils deliver has been neglected by the Scottish Government.
“There is no scope for Local Government to mitigate the impact of these cuts as there has been no movement yet on local taxation – the 3% Council Tax Cap remains and there is no indication about discretionary taxation, including Tourist Tax.
“It is extremely frustrating that, having worked well on a range of issues with the Government this year, our contribution to meeting key outcomes across Scotland has not yet been acknowledged.
“What we have today is a bad deal for communities and for jobs. Given these proposals today, serious financial challenges lie ahead for councils.”
UNISON is the public services trade union and the largest trade union in Scotland. Mike Kirby, UNISON Scottish secretary said: “Today’s Scottish government budget fails to make the investment in public services that our country needs.
“The Scottish government should have taken advantage of their tax powers to maintain essential public services. Instead they have further cut business tax and maintained the failed small business bonus scheme. The rise in local government funding is less than both CoSLA and Audit Scotland say is necessary to maintain vital public services.
“Public sector pay rose by just 4.4% between 2010 and 2016 while the cost of living rose by 22%. So today’s public sector pay increase of 3% may monitor inflation but fails to restore massive cuts in earnings since 2010. Equally the government could have used procurement guidelines to address low pay and the living wage in the voluntary sector.
The announcement in early years appears to recycle previous announcements and it is questionable whether this is enough to meet Scottish government’s aspirations for early years education. There was much welcome in the welfare package however they missed the opportunity to use their powers to lift thousands of children out of poverty.”
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