Investing in vital public services and ending Scotland’s contribution to climate change are at the heart of the Scottish Government’s tax and spending plans for the year ahead, according to the Scottish government – but critics say the budget is another wasted opportunity and will mean yet more cuts to public services.
Yesterday’s budget was completely overshadowed by the shock resignation of Finance Secretary Derek Mackay, who left office just hours before the budget was due to be presented following a newspaper expose.
Public Finance Minister Kate Forbes stepped in to deliver the budget.
Setting out the Scottish Budget 2020-21, Ms Forbes announced a package of funding to accelerate Scotland’s transition to a net-zero economy, including £1.8 billion of investment in low carbon infrastructure which will help reduce emissions.
She also announced a record investment of £15 billion in health and care services and £645 million for the expansion of early learning and childcare.
The Scottish Budget 2020-21 also proposes:
- £117 million investment in mental health for all ages and stages of life
- £180 million to raise attainment in schools
- an above real-terms increase of £37 million to the police budget and an additional £6.5 million to support community justice to reduce re-offending
- £220 million of seed funding for the Scottish National Investment Bank to support its mission to drive the transition to a net-zero economy
- increased investment of £270 million in rail services and an additional £16 million in concessionary travel and bus services, taking total investment in rail and bus services to around £1.55 billion
- increased investment of £5.5 million in active travel
- £20 million for peatland restoration with a commitment to invest more than £250 million over 10 years
- Investment of more than £64 million to support the commitment to plant 12,000 hectares of forestry, with the aim to reach 15,000 hectares by the mid-2020s
- a new £120 million Heat Transition Deal and a total investment of £151 million in energy efficiency
- £40 million for an Agricultural Transformation Programme
- a 3% pay uplift for public sector workers earning up to £80,000
Ms Forbes said: “The global climate emergency is at the centre of our Programme for Government and we have already put in place the most ambitious climate legislation and targets of any country. This Budget will help deliver on that world-leading ambition.
“From increased investment in low carbon transport to funding for peatland restoration and forestry, this Budget sets out our spending plans to help us deliver the transformation we need across society to transition to net-zero.
“We have also put wellbeing firmly at the heart of this Budget to benefit as many people as possible across the country. We will do this through prioritising inclusive economic growth with the creation of high quality jobs, supporting our public services and tackling inequalities head on.
“We estimate that we are investing at least £1.4 billion to support low-income households, mitigating the worst effects of the UK Government’s benefit cuts which are hitting the poorest in society and our Scottish Child Payment will help lift 30,000 children out of poverty when it is fully rolled out in 2022.
“I urge the Parliament to work constructively with us to pass this Budget in the national interest.”
The budget has come in for criticism, however.
STUC General Secretary Grahame Smith said: “This budget is long on promise but falls short on delivery. Positioning the budget as building the well-being economy is to be welcomed but far more was required to make that a reality.
“There is no doubt that the UK Government’s approach to Budget setting has left the Scottish Government in a difficult position. But to tackle the ‘crippling reality of austerity’ requires investment in decent local services. At best the budget provides only half of what local councils say they desperately need.
“We welcome the freezing of the higher rate tax threshold but much more is needed on redistributive taxation if the well-being economy is to be achieved.
“The Scottish government has missed an opportunity to commit to building the homes for social rent desperately needed in Scotland. By the next budget, it will be too late and local authorities and housing associations will have downed tools, without the funding to continue to build more homes for social rent. It is also disappointing that there are minimal new financial commitments in social security.
“On pay we are pleased that the government has listened to unions and extended the 3% pay increase to those earning over £40k per year, however we are a long way short of the much-needed restoration on public service pay to pre-austerity levels.
“While there are some new measures to tackle climate change, the funding levels proposed are still not sufficient to tackle the climate emergency.
“Given the failure over a number of years to create the new green jobs once promised, it is crucial that new funding comes with new jobs and does not simply provide cash handouts to big business and landowners.
“To be worthy of the name of a Green New Deal would require a publicly led and planned approach to decarbonisation involving publicly-owned companies, something this Budget fails to do.”
Jim McCormack, Associate Director of Joseph Rowntree Foundation Scotland, said: “This Budget was an opportunity to show the Scottish Government’s ambition to deliver on tackling poverty, yet today’s statement falls short of the mark.
“It cannot be right that one in four children in Scotland have their lives restricted by poverty. At the start of the decade in which all parties have pledged to solve child poverty, we welcome the financial commitment to introduce the Scottish Child Payment. But we know this won’t be enough to turn the tide: Scotland is not on track to meet the ambitious targets set for 2023-24.
“Scotland’s lower levels of child poverty compared with the rest of the UK are due to lower housing costs. If this advantage is to be maintained then the affordable homes programme needs to be continued beyond 2021. Now is the time to commit to further investment in secure, affordable homes for those facing rising rents and stuck in temporary accommodation.
“In-work poverty is a pressing economic challenge for families. Two-thirds of children in poverty are in families where an adult is working. The new Parental Employment Support Fund is too small to meet the scale of the challenge and only runs for two years. Investment should be increased and extended to benefit more families for longer.”
COSLA said it was disappointed that once again the Scottish Government has presented a Budget for Local Government that looks much better than the reality behind the figures.
Speaking this afternoon following the Scottish Government’s (Thursday) Budget announcement, COSLA’s Resources Spokesperson Councillor Gail Macgregor said: “On the face of it this looks like a good Budget for Local Government with a cash increase of £495million and whilst we acknowledge this money, the reality behind this figure unfortunately is quite different.
“What we are left with when you factor in the Scottish Government commitments of £590million – is a cut to Local Government core budgets of £95 million. This is £95 million in hard cash that will need to be taken out of front line services for communities. We campaigned hard to ensure that this position did not happen – it is disappointing our message has not been listened to.
“When you add in a £117million cut to capital funding (which equates to a 17% cash cut) – a hit to both communities and growing the economy you are left with a crisis for Local Government which is a long way from the picture being painted. This is even worse when seen in the context of an increasing Budget for the Scottish Government.
COSLA President Councillor Alison Evison added: “Local Government’s core budget which provides our essential services has been cut as a result of today’s budget. A cut of a significant proportion is the Budget Reality that our Communities now face – a cut to services, a cut to local jobs, a cut to the work councils do to tackle child poverty and respond to climate change.”
“In addition to the cuts – it is also extremely disappointing that we have seen no money for inflation or any other of the significant pressures we face, such as restoration for cuts to our funding in previous years. COSLA will be raising these issues with the Scottish Government and all parties across the Parliament at the earliest opportunity to ensure this picture is rectified as part of the budget scrutiny process. It is our communities and the priorities of tacking child poverty, wellbeing, climate change and inclusive growth that will suffer.
“Things cannot go on in this manner. I am really concerned that more and more of what Local Government does is directed by the centre. As a result of the Scottish Government commitments that Local Government has to deliver we are no longer able to respond to local priorities.”
The Scottish Government argues that the budget offers a real terms increase for local government, hower. Cabinet Secretary for Local Government Aileen Campbell said: “This budget provides a fair settlement for our partners in local government and supports vital public services across Scotland.
“Taken together with the flexibility to increase council tax, this local government settlement gives councils an increase of revenue spending of up to 4.3% in real terms to deliver local services.
“The settlement will deliver on our joint key commitment to expand the funded hours of early learning and childcare this year, funds a fair pay deal for our teachers, and invests more than £120 million targeted at closing the attainment gap through the Pupil Equity Fund.
“This increased settlement will ensure fair, sustainable funding for local authorities.”
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