Scottish Budget: “Additional spending on public services”

Budget proposes an extra £2 billion spend

Greens secure extra funding for local government 

The Scottish Government’s budget was passed last night with the support of the Scottish Greens. A last minute deal ensured the minority government got their programme through parliament, but the Budget has been criticised by both the Conservatives and Scottish Labour.

The Scottish Greens, who forged a deal with the minority SNP Government just hours before the budget was delivered, hailed their ‘Green Budget Deal’ and said they are ‘proud to lead the change.’  

This includes giving councils up to £282m more to spend on providing local services, meaning that over the last three years Scottish Greens have secured over £500m for local services. But the Greens say they have achieved even more this year, securing radical changes that will provide local government with greater flexibility, certainty and autonomy for the years ahead.

Here’s 7 things they say their Green budget deal will deliver:

1. Up to £282m extra for Councils to spend as they see fit.

Our councils provide for our schools, parks, streets and social care but they have been under increasing financial pressure to reduce frontline services. The Green budget deal has secured up to £282m additional funds and spend to enable councils to continue to deliver these essential services.

1. A replacement to the Council Tax.

Greens have secured a commitment that the Scottish Government will develop legislation to replace the Council Tax with a more progressive local tax following cross-party agreement.  Cross-party talks will start in the first half of 2019 with an intention for draft legislation published before the end of this parliamentary session. There is already cross-party consensus that the council tax is out-of-date and unfair, with the most expensive homes only paying 3 times as much as the least expensive.

1. Powers to introduce a tourist tax, raising vital funds for local services.

Many European cities add a small additional charge to tourists’ accommodation bills to generate extra income to invest in public services, such as bin collection and road maintenance, which come under increasing strain when tourist numbers are high. The Green budget deal has secured a commitment that the Scottish Government will introduce legislation, following public consultation, to allow councils to levy a similar charge on tourists visiting Scotland. Councils will be free to determine whether to introduce the new tax, the rates best suited to their area and how the additional revenue should be spent.

1. Powers for councils to introduce a workplace parking levy, raising public funds and cutting congestion.

The Green budget deal has secured support for legislation to allow councils to place a levy on employers with large number of parking spaces. This could incentivise employers to participate in cycle-to-work schemes and support their employees to choose low-carbon commutes. A workplace parking levy has been successfully introduced by Nottingham City Council, raising around £9m per year that is re-invested in alternative public transport services.

1. Certainty and stability for the public sector with 3-year local government funding deals.

It is vital that local government is able to plan its budget across several years, particularly in areas of growing demand such as social care provision. The Green budget deal has secured a commitment that the Scottish Government will agree to a three-year funding deal with local government from 2020 onwards, ensuring that councils can plan their spending over a longer time period. This will be followed by a rules-based fiscal framework similar to the arrangements in place between the UK and Scotland.

1. A fair pay deal for teachers.

In addition to this funding package, the Green Budget deal includes a commitment from the Scottish Government to pay for a teacher pay settlement through an increase in the general resource grant. Whether or not the latest pay offer is accepted by teachers’ unions, we will respect their decision and continue to stick to the principle that additional costs must come from national resources, not from councils’ resources. This follows strong support by the Scottish Greens for the EIS campaign for a 10% pay rise for teachers.

1. Measures to reduce plastic pollution.

Greens have secured an increased charge on single-use plastic carrier bags which will be rising to 10p at the earliest opportunity. The current 5p charge has been extremely successful in reducing plastic bag use by over 80% and this has potential to reduce plastic pollution further and potentially provide another funding stream for local authorities.

The Greens also secured a commitment to introduce charges on single-use plastic drinks cups with a legislative proposal to be published later this year. Their calculations suggest a 25p levy per cup could raise between £50m to £200m per year.

Everybody’s happy, then? Er, no …

Murdo Fraser of the Scottish Conservatives said: “Derek Mackay has torn up the promises he and Nicola Sturgeon made to voters at the last election on tax. This disgraceful betrayal of Scottish voters shows that this SNP government simply cannot be trusted.

“Thanks to the SNP and #ScotBudget Scots across the country are about to be hit by a triple tax bombshell. They are squandering the union dividend, and it is taxpayers who are having to pay.”

Scottish Labour said that independent experts at the Scottish Parliament Information Centre have confirmed the SNP-Green Budget will mean a £230.7million real terms CUT to council funding.

Labour’s Finance Spokesman James Kelly said: “”Derek Mackay’s budget is not fit for purpose in its current form. It hands a tax cut to high earners while cutting funding for local services and threatening jobs.

“This budget will not be improved by tinkering around the edges. It needs significant change, such as a 50p top rate of tax to ensure top earners pay their fair share to fund our public services. We need to send Derek Mackay back to the drawing board.”

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CBI Scotland Director, Tracy Black, said: “The Budget brings forward a number of measures supported, and long argued for, by the business community.

“On business rates, the scrapping of the proposed out-of-town levy, capping the poundage rate and confirming the switch from RPI to CPI for the duration of this parliament are all welcome and will support businesses to grow the economy.

“If there is an added winter chill in the air, it’s the growing income tax gap between Scotland and the rest of the UK, alongside the emergence of a new ‘tourist tax’.

“At a time when firms are struggling to attract talent and investment, and amid continued Brexit uncertainty, protecting Scotland’s competitiveness has to go hand in hand with productivity enhancing measures to give our economy the boost it needs.”

On the decision to halt progress on the proposed Glasgow Airport rail link, Ms. Black said: “Businesses will be disappointed to see that the long-anticipated rail link to Glasgow Airport appears to have been kicked into the long grass.

“A direct rail link has the potential to widen the already significant economic contribution Glasgow Airport makes to the local area and give a strong first impression of Scotland to overseas visitors and investors.”

There was also a qualified welcome from local government umbrella body COSLA.

COSLA’s Resources Spokesperson Councillor Gail Macgregor said: “I welcome the movement made by the Scottish Government today in recognition of the essential services Local Government delivers.

“This helps councils across the country in making their tough choices.  Councils will continue to work to mitigate the impact on communities.

“COSLA, on a cross party basis, has engaged positively with Scottish Government and all political parties throughout these budget negotiations.

“COSLA ran a pro-active campaign around the meaningful impact our essential services make to communities throughout Scotland. The messages in this campaign were well heard.

“I would also like to put on record my thanks to the Green Party for working with COSLA to get us to this position today. Meaningful progress has been made on a number of fronts including a commitment to secure more sustainable funding for Local Government going forward.”

COSLA President Councillor Alison Evison said: “Whilst challenges still remain, and today’s movement from Scottish Government clearly doesn’t mitigate all of our funding issues, we are now in a better place than we were with the original budget proposal.

“I welcome the commitment today to the introduction of discretionary taxation (Transient Visitor Tax) and the Workplace Parking Levy – it is right that Local Authorities across Scotland should be able to raise revenue locally to address local issues.

“A key part of COSLA’s work is to promote the democratic role and rights of our Councils. Therefore, I appreciate the movement from Scottish Government today, with support from the Greens. The job does not end here: with on-going political leadership and cross-party engagement we must all work together to deal with the challenges ahead on behalf of our communities.”