Deputy First Minister John Swinney laid out “a different, more progressive path for Scotland” as he presented the Scottish Budget 2023-24.
He promised to strengthen the social contract with the people of Scotland and pledged to do everything possible to shield families from the welfare cuts and austerity policies of the UK Government
Supporting sustainable public services through the cost of living crisis is a priority – including more than £13.7 billion for NHS boards and £2 billion to establish and improve primary healthcare services in communities, as well as £1.7 billion for social care and integration, paving the way for the National Care Service. This record investment goes well beyond any previous commitment to pass on all consequentials to health and social care, and delivers a £1 billion uplift to the health budget.
Having already increased the unique Scottish Child Payment to £25 per week as part of a drive to eradicate child poverty, the Budget invests £428 million to uprate all other devolved benefits in April 2023 by September’s Consumer Price Index inflation level of 10.1%. It commits £20 million to extend the Fuel Insecurity Fund to provide a lifeline for households, including the most vulnerable, against rising energy prices.
Scotland’s transition to net zero is boosted with increased investment to over £366 million in delivering the Heat in Buildings Strategy in 2023-24. This will help tackle fuel poverty as part of a £1.8 billion commitment over this Parliament to improve energy efficiency and decarbonise more than a million Scottish homes by 2030.
The Budget commits £50 million to the Just Transition Fund for the North East and Moray – more than double the 2022-23 allocation – to diversify the regional economy away from carbon-intensive industries and capitalise on the opportunities presented by new, green industries.
Strengthened by the agreement between the Scottish Government and the Scottish Green Party, the 2023-24 Scottish Budget also includes:
- around £1 billion investment in high quality early learning and childcare provision, with a further £22 million invested in holiday food provision and expanding support for school-age childcare
- £50 million for the Whole Family Wellbeing programme for preventative co-ordinated family support and a further £30 million to keep The Promise to care experienced children and young people
- £80 million capital funding to support the expansion of free school meals
- going beyond existing commitments with more than £550 million additional funding to Local Government
- £165 million additional funding for frontline justice services and to continue with transformational reforms
- a £46 million increase in resource funding to universities and colleges to ensure a highly qualified and highly skilled workforce for Scotland
Mr Swinney said: “The Scottish Government, like governments all over the world, is faced with a difficult set of choices. Through this Budget we are facing up to our responsibilities while being honest with the people of Scotland about the challenges which lie ahead.
“To govern is to choose and the Scottish Government has made its choice.
“Within the powers available to us, we will choose a different path. A path which sees the Scottish Government commit substantial resources to protect the most vulnerable people of Scotland from the impact of decisions and policies made by the UK Government. We choose to stand firmly behind the Scottish people, investing in our public services and doing everything possible to ensure that no one is left behind.
“This Budget strengthens the social contract between the Scottish Government and every citizen of Scotland for the wider benefit of society. This social contract means that people in Scotland continue to enjoy many benefits not available throughout the UK – including free prescriptions, free access to higher education and the Scottish Child Payment.
“Because we know this progressive model works, we choose the path where people are asked to pay their fair share, in the knowledge that in so doing they help to create the fairer society in which we all want to live”.
Read the 2023-2024 Scottish Budget here.
Responding to the Scottish Government Budget, STUC General Secretary Roz Foyer said: “It’s clear that Scotland’s trade union movement has made progress in winning demands from the Scottish Government.
####2Raising taxes on those most able to pay, including second homeowners, are key demands in our ‘Fairer Taxes’ report. We hope reform of the Small Business Bonus Scheme will leave it fairer and less of a drain on public resources and the piloting of scrapping peak rail fares is also a step in the right direction.
“However, we needed strides, not steps. We cannot pretend this is the radical, redistributive budget working people in Scotland needed – it isn’t. We can – and will – demand the government to go much further and deliver the substantial reforms needed to our economy including introducing wealth and further property taxes called for in our report.
“The Finance Secretary has more to do and we welcome his constructive engagement with our movement. This budget leaves the door open for public sector workers to negotiate the inflation level pay rises they so desperately need. We intend to use it.”
Responding to the Scottish Budget delivered by the Deputy First Minister, Dr Liz Cameron CBE, Chief Executive, Scottish Chambers of Commerce, said: “Whilst the backdrop for today’s statement was already set by the Chancellor Jeremy Hunt in the Autumn Statement, today’s Scottish Budget will not bring much Christmas cheer.
“Businesses and households are navigating an extremely challenging period of high energy costs, rising inflation and higher borrowing costs. The specific decision by the Scottish Government to widen the divergence on income tax rates between Scotland and the rest of the UK is exceptionally concerning.
“Many will be left pondering today as to who in the Scottish and UK Governments is standing up for the economy to help businesses survive this crisis and keep people in jobs.”
On taxation:
“The Scottish Government’s move to increase the top and higher rates of income tax will hit taxpayers in Scotland more than other parts of the UK.
“This is a clear disadvantage for Scotland’s businesses and workers and could position Scotland as a less attractive place to live and work. With over 350,000 people alone in the higher rate bracket, questions remain on the impact this will have on talent attraction, retention, consumer confidence and indeed departure of workers to other parts of the UK.
“We urge the Scottish Government to publish its economic modelling of this policy decision, specifically on the proposed impact this could have on future investment decisions by companies.”
On Business Rates:
“As a priority ask from the business community, we welcome the Scottish Government’s decision to freeze the poundage rate and align with the rest of the UK. This will provide relief to ratepayers by reducing the upfront cost burden of non-domestic rates. This was the right decision as is the incentive for businesses to invest in greener plant and machinery which supports net-zero and decarbonisation.
“Looking ahead, businesses need to see widespread reform to the business rates system ensuring it is fit for purpose and aligns with the economic reality that businesses operate in.”
On regulatory legislation:
“The scale of new and incoming regulations are piling additional cost burdens onto firms when they need them least.
“The recent move to delay the short-term lets licensing scheme was welcome and we had hoped for additional signalling from the Deputy First Minister today to delay other burdensome legislation such as the Deposit Return Scheme. This will continue to cause a great deal of frustration for affected sectors and we will therefore continue to represent sector concerns to Scottish Government through the Joint Regulatory Taskforce.”
On Net Zero:
“We welcome the Scottish Government’s intention to accelerate the move to a Net Zero economy. Businesses continue to support this agenda and a clear long-term plan for decarbonisation will support future investment and a just transition.”
Jonathan Carr-West (Chief Executive, Local Government Information Unit Scotland (LGIU) said: “Today’s budget saw Deputy First Minister John Swinney attempting to reach out to local government by promising additional funding and acceding to COSLA’s request to allow councils more freedom over council tax rates.
“Scottish councils will now be poring over the detail to see how much real additional money sits behind the headline of £550 million.
“Moreover, local government in Scotland will still be left wondering how, indeed if, it fits into the Government’s overall vision.
“While Mr Swinney was keen to position his budget in counterpoint to the UK Government, he risks repeating Westminster’s error in protecting the NHS at the expense of local government when we know that the preconditions for good health rely on effective leadership of place and an integration of services that only local democratic institutions can provide.”
The Poverty Alliance says the Scottish Government could do even more to invest in a just and compassionate Scotland:
Tax
Reacting to today’s Scottish Budget announcement, Poverty Alliance Policy and Campaigns Manager Ruth Boyle said: “We welcome the decision to use our tax powers in a progressive way to get more investment for the compassionate Scotland that people want. We hope that this will be the beginning of the Scottish Government’s efforts to use the full range of tax powers at their disposal. In the longer-term, the Scottish Government must reform the basis of our tax system, including implementing the long-awaited reform of council tax, to ensure that our tax system has justice and compassion at its heart.”
Services
“Increased support for the NHS and social care is very much welcomed. However, all of our vital public services are calling out for more investment. This budget raises a number of concerns for the future, and we fear that there will be more cuts to other public services coming down the line. We all rely on these public services, but they are a vital lifeline for people on the lowest incomes.”
Social security
“We are pleased that the Scottish Government have done the right thing and uprated benefits in line with inflation. However, we could go much further. The Finance Secretary stated that a key priority for this budget was tackling child poverty and it is therefore disappointing that the budget failed to uprate the Scottish Child Payment in line with other Scottish benefits. This will mean a real term cut in the value of the payment at a time when families on low incomes need more support to stay afloat. This decision raises particular concern for the poverty of single parents, over 90% of whom are women.”
Transport
“The decision to trial the scrapping of peak rail fares will help people to make ends meet as costs continue to rise. However, evidence shows that people on the lowest incomes are more reliant on buses. There is a need to improve access to affordable transport by extending free bus travel to people on low-income benefits and to those aged under 25.”
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