The Edinburgh Partnership is conducting a review of how it supports and works with third sector organisations in Edinburgh.
The review into the relationship between the public sector and third sector in Edinburgh seeks to improve funding certainty in future years. This includes how grant funding and commissioning is delivered, how third sector organisations monitor and report on their work, and what in-kind support is provided.
Third sector organisations of all types – voluntary, social enterprises and charities – are being asked to share their views through the City of Edinburgh Council’s Consultation Hub survey or by attending a workshop.
The results will be reported to the Policy and Sustainability Committee in August.
Council Leader and Chair of the Edinburgh Partnership, Jane Meagher, said: “The third sector provides vital support to local communities, with many giving direct support to the most vulnerable in our city.
“We know that they, like the Council, are under significant financial pressure and that there needs to be longer-term change in how they are supported by us and our partners.
“We want to hear about how we can make it simpler, provide more stability, and work better together to help vulnerable people. You can share your views through the council’s consultation hub webpage, or by attending one of the workshops.”
Workshops run from Monday 19 May until Thursday 5 June. Details are available on the Consultation Hub and booking is required.
As part of the city’s commitment to help the sector, the council has dedicated £3.5m this year to help organisations impacted by unexpected loss of grant funding or reduced commissioning.
Poverty Alliance: ‘People in Scotland are demanding better’
The NHS will deliver 100,000 additional GP appointments and Scotland will have a ‘best in UK’ cost-of-living guarantee, including the permanent abolition of peak rail fares, First Minister John Swinney announced as he set out a Programme for Government against a backdrop of global economic challenges.
Speaking one year since he was elected First Minister and one year before the end of this Parliament, Mr Swinney committed to a package of cost-of-living initiatives for households and businesses and a new Six Point Export Plan to unlock target markets.
He set out plans to strengthen the NHS with the delivery of extra GP appointments for key health risks such as high blood pressure, and 150,000 more NHS appointments and procedures, including a 50% increase in surgical procedures such as hip and knee replacements.
Key announcements include:
100,000 enhanced service GP appointments by March 2026 for key risk factors including high blood pressure, high cholesterol, high blood sugar, obesity and smoking as well as more than 150,000 extra appointments and procedures, including surgeries and diagnostic tests, and target cancer pathways to tackle backlogs against the 62-day referral to treatment standard
The cost-of-living guarantee which includes ongoing free prescriptions, eye exams, bus travel for 2.3 million people, free tuition for students and more than £6,000 in early learning and childcare support for each eligible child
ScotRail peak rail fares abolished and the general alcohol ban on ScotRail trains removed and replaced with time and location restrictions
Winter fuel payments for pensioners restored
A new Six Point Export Plan, with a focus on actions to unlock target markets, and showcase Scotland to global buyers
A national regeneration fund that will support at least 26 projects to renew and restore communities, with a focus on delivering more local jobs
More rights and stronger protections for tenants, helping deliver more than 8,000 affordable homes, including for social and mid-market rent, and removing barriers on stalled building sites with the potential to deliver up to 20,000 new homes
The First Minister said: “This Programme for Government is focused on providing the best cost-of-living support across the UK, as well as delivering a renewed and stronger NHS.
“When I became First Minister a year ago, I heard loud and clear people’s concerns about the NHS which is why I am taking serious action to ensure the NHS meets the needs of the public.
“This PfG also shows decisive action to protect Scotland’s economy and maximise our economic potential in the face of global challenges.
“It is being published earlier than usual, in part because it allows a clear year of delivery on the NHS and other public services, but also due to the scale of the looming economic challenge.
“It is a programme for a better Scotland, for a stronger NHS and a more resilient and wealthier Scotland. It is a Programme for Government that gets our nation on track for success.”
POVERTY ALLIANCE: Government programme misses need for fundamental change
Commenting on the Programme for Government, Poverty Alliance chief executive Peter Kelly said: “Many of today’s announcements are welcome, but the package doesn’t go far enough towards creating a just and compassionate Scotland where people have what they need to build a life beyond poverty.
“More and more people in Scotland believe the system is rigged against them and their families. And they’re right.
“Scrapping peak rail fares for good will help many people on low incomes, but many, many more are still being left with unaffordable buses that don’t meet their needs.
“It’s welcome that this programme turns its back on previous cuts to affordable homes, but we urgently need more investment to create a social housing programme that will bring the scandal of child homelessness to an end.
“Reversing the effect of the unjust two-child limit for households in Scotland is the right thing to do, but there was no sign of a pledge to raise the Scottish Child Payment – never mind raising it to the £40 a week that we know is needed to meet our legal child poverty targets.
“And it was good to hear the First Minister talking about sharing Scotland’s growing wealth more fairly, but the Government simply can’t do that without using its powers over investment and taxation.
“People in Scotland are demanding better, and they want a Scottish Govt that will make the big, fundamental changes that will empower households to build a better life for themselves and a better future for all of us.”
STUC: Scrapping peak fares is a victory for workers in Scotland
Commenting on the scrapping of peak rail fares within the Scottish Government’s Programme for Government, STUC Deputy General Secretary Dave Moxham said:“This is deeply welcome news that, whilst long overdue, shows the strength of campaigners and rail unions in demanding an affordable and accessible rail network that is fit for the future.
“This is a clear victory for workers in Scotland and it’s commendable the Scottish Government has listened to the voices of our movement – and listened to their own evidence – which showed the positive impact of scrapping peak fares.
“Peak fares were, simply put, a tax on workers that hit commuters directly in the pocket. We can now ensure we build an interconnected, cheaper and greener rail networks that puts people before profit and puts peak fares out of commission for good.”
Children First: First Minister missed another chance by not increasing Scottish child payment
Children First statement on Scottish Government Programme for Government
Mary Glasgow, chief executive of Children first, said: “We hoped the First Minister would bring bold, ambitious plans to tackle the crippling levels of child poverty in Scotland. Instead, the Programme for Government, while well-intentioned, lacked real action. The First Minister missed another chance to help families by not increasing the Scottish Child Payment to £40.
“While we recognise the Scottish Government’s commitment to eradicating child poverty, supporting whole families and improving mental health support for young people, we are deeply concerned that it lacks urgency and the necessary financial resources and policy ambition.
“Scotland is facing a childhood emergency. The children and families we support cannot wait another 12 months for yet another fresh approach.
“They need action now.”
ALBA Party: Scotland “won’t accept” the Scottish Government’s decision to omit independence from its Programme for Government, says Ash Regan
For the second year in a row First Minister John Swinney has failed to mention independence in his Programme for Government with the document not setting out any plans to give Scots a choice on their future in the remainder of the current Parliament.
The SNP were re-elected in 2021 promising a referendum would be held during the life of the current Parliament but after the Supreme Court ruled against the Scottish Parliament’s ability to do so the Scottish Government have taken no action to find a path to giving the people of Scotland a choice on their future.
Alba’s Ash Regan wanted to see First Minister John Swinney set out the actions his Government will take to advance the case for Scottish independence in the run up to next year’s Scottish Parliament elections. But she has hit out as the Government has confirmed today that the only action it will take in the next year will be the publication of another independence paper.
The Alba MSP says that the Scottish Government’s plan for how it intends to progress the case for Scottish independence should have featured “front and centre” of John Swinney’s plans and the failure to do so is a “missed opportunity.”
Last year, in his first ever PfG as First Minister, John Swinney did not make reference to independence when he addressed parliament and in his speech today he again failed to reference any actions his Government would take to help deliver independence.
Commenting Alba Party Holyrood leader Ash Regan MSP said: “Last year the word ‘independence’ was not mentioned once in the Programme for Government statement to Parliament. Since then we have witnessed consistent polling showing that at least half the country favour independence.
“The failure to put independence front and centre of today’s Programme for Government is a wasted opportunity. The people of Scotland are now ahead of the SNP when it’s comes to independence and that is why we have seen a separation of support for independence and support for the SNP.
“Scots want to see a drive towards governing competently again and focus to be put back onto the people’s agenda of health, the economy, jobs and the protection of women and children.
“The case for independence has never been stronger, it is now vital we see support for Alba Party on the list to ensure the SNP don’t see out another term of Parliament without taking action on independence.”
RCEM: Scotland’s Programme for Government a ‘missed opportunity’ to tackle UEC crisis
After enduring another challenging winter, Scotland’s Programme for Government has failed to deliver a tangible plan to address the emergency care crisis. That’s the response from the Royal College of Emergency Medicine after the First Minister, John Swinney, delivered a speech today (6 May 2025) which laid out his government’s key pledges for the final year of the Scottish Parliament’s current term.
Reducing time patients wait for treatment by delivering more than 150,000 extra appointments and procedures, including surgeries and diagnostic tests.
Ensuring more people can see their GP and get cared for in the community – reducing pressures in hospitals
Ensuring more people can be cared for at home, reducing pressures in hospitals by expanding the number of Hospital at Home beds to at least 2,000 by December 2026.
Mr Swinney’s speech coincided with the release of new data by Public Health Scotland which revealed in March, there was an average of 1,925 people waiting to be discharged from hospital, despite being deemed medically well enough to go home.
That’s the highest number of so called ‘delayed discharges’ for the month of March since guidelines changed in 2016.
This is often caused due to a lack of social care support. Therefore, the system grinds to a halt, with patients stuck in Emergency Departments, often on trolleys in corridors, facing extreme waits because there’s no in-patient beds available.
Today’s figures, which cover March 2025, also show:
120,143 people attended a major Emergency Department in Scotland – a 17.7% increase when compared to February.
One in three patients waited four hours or more in Emergency Departments, one in 9 waited eight hours or more, and one in 23 waited 12 hours or more.
While waits have slightly improved across the board when compared to February, they are significantly higher when compared to March 2018. The numbers waiting four hours or more has increased by 158%, the numbers waiting more than eight hours by 490%, and the numbers waiting more than 12 hours by 803%.
There was a total of 60,129 days spent in hospital by people whose discharge was delayed – a 2.5% increase compared to March 2024 (58,646).
Dr Fiona Hunter, Vice President of RCEM Scotland said, “Today’s Programme for Government is a missed opportunity. It was a moment to resuscitate emergency care but instead, we have been left without a tangible plan.
“You just have to simply look at today’s figures from Public Health Scotland to see the level of pressure our Emergency Departments our under – thousands of people waiting extreme and dangerous long stays, often on trolleys, in corridors, because there are no available beds on wards for them to move to.
“And let’s be clear – these aren’t just numbers, data, statistics. Each is a loved family member – mums, dads, grandparents, sons, daughters.
“While we welcome the government’s commitment to improving access to GPs, this can’t be done in isolation. Equal attention is needed at the ‘back door’ of hospitals – ensuring patients who are well enough to be discharged, can be, with the appropriate social care in place.
“Only then will our patients be able to move as they should throughout the hospital system, rather than experiencing significant delays.
“Our members and their colleagues will be deeply disappointed after enduring another challenging winter. It’s left us asking, when will Emergency Care become a political priority?”
Greens hail peak rail fares U-turn and call for cheaper buses
The Scottish Greens have welcomed the Scottish Government’s decision to finally take forward the Green policy of scrapping peak rail fares for good, and have called for action to make public transport cheaper across the board.
The policy was initially secured by the Scottish Greens through budget negotiations in 2023 before being dropped by the SNP in 2024.
In the 2025 budget the Greens secured a £2 bus fare cap that the Government has committed to rolling out as a regional pilot project by January 2026.
Speaking in the Scottish Government’s Programme for Government 2025-26 debate today at Holyrood, the party’s co-leader, Lorna Slater, said: “I am delighted that the Government has finally committed to the Scottish Green policy of ending peak rail fares for good.
“Earlier this year, they said they wouldn’t do it. They even voted against Green calls to do it. We’ve finally got there.
“More brave decisions are needed to make all public transport cheaper.
“The Scottish Government agreed to Green proposals for a £2 bus cap, only as a local pilot from January 2026, but people all across Scotland need cheaper buses now.
“Will the First Minister avoid the hesitation he showed over peak rail fares, get on with delivering another great Green idea: capping the price of bus fares in Scotland for good?”
Independent Age: No New Support for Older People in Poverty
Debbie Horne, Scotland Policy and Public Affairs Manager at Independent Agesaid: “Today’s Programme for Government announced no new support for older people in poverty.
“Making sure every pensioner in Scotland receives some winter heating support is very welcome, particularly for older people on lower incomes. However, there is more the Scottish Government should do to reduce the growing number of pensioners in poverty.
“With 156,000 older people across Scotland currently living in poverty – an increase of 30% the last decade – the need for a clear strategy to address this is more urgent that ever. Our polling shows that people of all ages in Scotland agree that a strategy to reduce pensioner poverty should be created – with 9 in 10 supporting the idea. Without one, people facing financial hardship in later life will continue to struggle to maintain even the most basic quality of life.
“Poverty at any age is extremely damaging to both mental and physical wellbeing. Our 2025 Index showed that nearly one in five (19%) older people in Scotland have a household income of under £15,000 a year and almost one in three (29%) older people in Scotland have skipped meals in the last 12 months.
“In a compassionate and wealthy society, this shouldn’t be the case. Both the UK and Scottish Governments need to take action. If the Scottish Government wants to make Scotland the best place to grow old and tackle the injustice of pensioner poverty it is essential they have a plan for doing so.”
Gordon Macdonald MSP has highlighted the record funding going to City of Edinburgh Council after the Scottish Budget was passed at Holyrood this week, providing a £1 billion increase in funding to local authorities.
After the budget received cross-party support – despite Labour and Tory MSPs sitting on their hands – City of Edinburgh Council is set to receive an increase in funding worth £60 million.
This increases funding for local priorities, teachers, and additional support for learning and to tackle the climate emergency. It also facilitates pay increases agreed for teachers, social care workers, refuse collectors and more.
Gordon Macdonald MSP said: “This year’s Scottish Budget provides record funding for Edinburgh Council which will help deliver the services people rely on and ensure our communities get the investment they need.
“After over a decade of austerity and a Labour tax hike which is set to cost councils £100 million, our local authorities have been repeatedly betrayed by Westminster parties.
“Under the SNP, we are not only investing in our local councils, but we are mitigating the impact of Westminster decisions, to the tune of £144 million for the National Insurance hike alone.
“This SNP government is delivering for the city, and I am pleased parliament has backed this budget to ensure that continues.”
Councillor Mandy Watt, Finance and Resources Convener, looks ahead to Council Budget day on Thursday 20 February:
Very soon, councillors will be making tough financial decisions to balance the council’s budget and set the rate at which Council Tax will be charged.
Given the increasing need for investment in infrastructure and services, we’ll have to raise Council Tax, parking charges and other fees to fund the delivery of services we all rely on. We are considering a recommended 8% rise in Council tax.
An 8% increase adds £9.65 per month to a band D property and would provide a total of £26 million across all bands for investment and service priorities.
A huge amount of work has already been done to consider options, with detailed proposals considered yesterday at a Special meeting of the Finance and Resources Committee. This has been informed by a huge consultation exercise with residents, and I want to thank all 3,260 people who took part.
We know from the consultation responses that people are aware of the financial challenges we face following years of underfunding, and many are open to a fair rise to Council Tax after last year’s freeze.Other councils are proposing increases of 10% and above, but we’re trying to keep Edinburgh’s increase lower because that’s what the majority of residents would prefer.
Residents also told us they’d like to see Councillors focus on several key priorities when setting this year’s budget. These include spending on education, investing in local facilities and upgrading our roads and pavements. We’ll use the money from an increase in Council Tax to protect and improve these services.
Investment proposals include continuing the extra £12.5 million for roads and pavements that was added last year, with a further £5 million for road safety, especially around schools. There will be five new schools and five extensions of existing schools and £26 million for special needs infrastructure. Fox Covert Joint Campus will be replaced and there’s £15 million for permanently replacing Blackhall Library.
The decision to recommend an 8% Council Tax increase was not taken lightly. Over the last decade cuts in core grant funding of over £400 million have been mitigated by council staff continually delivering more with less resources.
This year’s financial challenges are the UK Government’s increase in national insurance, costing the council £9 million and the Scottish Government changing the stability funding floor, taking away £6.3 million. Fortunately, the UK Government passed on £18million of pEPR (‘producer pays’) funding, which filled those gaps.
While we can expect a slightly better government grant this year following yesterday’s Scottish Parliament budget, the consequences of last year’s cuts to affordable housing remain clear to see.
Huge pressures on health and social care remain unaddressed by national governments. Yet again, Edinburgh is expected to be the lowest funded local authority in Scotland per head of population and we’ll still need to find best value efficiency savings to deal with service pressures of £40million and keep the books balanced this year.
LAST WEEK the Scottish government confirmed that plans for a National Care Service (NCS) in Scotland have been scrapped in favour of an advisory board and smaller, more targeted reforms (write FRASER of ALLANDER INSTITUTE’s MAIRI SPOWAGE and EMMA CONGREVE).
The decision came after months of declining support from key organizations and stakeholders including COSLA, key trade unions and representative bodies for social care providers in Scotland.
Beyond the wavering support for the NCS plans, there is clear support for social care reform, particularly in enhancing access to and the quality of services.
Our interest in the National Care Service, and wider social care reform stems back to 2022, in which we conducted analysis of the NCS bill published in June of that year. Following this work, published in August 2022, we engaged with a number of stakeholders across the private, public and third sector.
Among concerns around governance and funding of the NCS, one of the key concerns from stakeholders we engaged with was the lack of good quality and timely data that is crucial to ensuring that any reforms to social care are well informed. In particular, the need to better understand what future levels of social care demand might be, the workforce requirements to accommodate this, and the associated expenditure on social care.
Our concerns about the lack of investment in social care research were highlighted in our response to the Wave 2 consultation. The Scottish Government has not commissioned any work in this area, and we have not been able to find independent funders willing to fund work of this nature in Scotland.
It is our view that projections of demand and cost of the current service, and any future reforms, is urgently required.
New labour market data published
The latest data on the labour market in the UK was published last week. There are many documented issues with the data at the moment due to the challenges faced by the Labour Force Survey, which means the headline figure are no longer considered accredited Official Statistics.
If you can set that aside for a moment, the headline results show on the surface a strong Labour market in Scotland, with high employment (74.1%) and low unemployment (3.8%). Inactivity rates remain slightly higher than the UK at 22.9%.
There are a number of other data sources published alongside the LFS data which is used to supplement our understanding of what is going on in the Scottish economy. One of these is the payrolled employment data, known as the PAYE Real-Term Information, which is published every month by the ONS. This draws on administrative records, and so is likely to be more reliable in terms of employment (although, of course, tells us nothing about unemployment or inactivity).
This data shows that payrolled employment is almost 3% higher in Scotland than pre-pandemic levels. However, we had a look at replicating the sectoral breakdowns in this interesting piece by think.ing, which looks at government-dominated sectors vs the rest.
Chart:Payrolled employment in all sectors, government dominated sectors (public administration, health and education, and total excluding government, Scotland, January 2020=100
Source: ONS
This shows that once the government dominated sectors are excluded, payroll employment has been falling since March 2024, and is now almost back at the levels seen in January 2020. In contrast, government dominated sectors are 8% about pre-COVID levels.
Given some of the challenges facing the private sector in the first half of 2025, including large increases in employer National insurance contributions which will come in in April, the trend in private sector employment is concerning, and points to a weakness masked if we just look at employment in total.
However, it is worth emphasising again that this is just payrolled employment, and does not cover self-employment.
Scottish Liberal Democrat communities spokesperson Willie Rennie has criticised cuts to local authority funding which have seen the number of public toilets fall by 25% since the SNP came to power and four local authorities no longer having any public toilet facilities.
Analysis of data uncovered through a Scottish Liberal Democrat freedom of information request reveals that:
Across the 18 councils which provided data for both 2007 and 2024, there has been a 25% decrease in the number of public toilets during this period.
Across the 31 councils which provided data for both 2018 and 2024, there has been an 8% decrease in the number of public toilets during this period.
Clackmannanshire, East Dunbartonshire, Falkirk and South Lanarkshire now have zero public toilets.
Highland Council has closed the largest number of toilets, with 37 having closed since the SNP came to power. Edinburgh has closed more than half of its public toilets.
Commenting on the figures, Mr Rennie said:“Since the SNP came to power public toilets have been shut down left, right and centre.
“This is not just about public convenience. For some older or disabled Scots, a lack of accessible bathrooms can prevent them enjoying public spaces or getting out and about in their communities.
“That’s a depressing state of affairs for our country to be in but it the inevitable consequence of the decisions that successive SNP First Ministers have taken over the past 17 years.
“Scottish Liberal Democrats want to see local authorities handed real financial firepower to rebuild battered local services like public toilets and other essential amenities like electric charging points and waste disposal points.
“Looking ahead there also needs to be a commitment from the next Scottish Government not to treat local authorities as second-class services.”
THINK TANK AND FORMER COUNCIL CHIEF EXECUTIVES JOIN FORCES
Reform Scotland and the Mercat Group collaborate on ideas for local decentralisation
Former local authority chiefs ask: “Has Holyrood become Scotland’s biggest Council?”
Reform Scotland, the non-partisan think tank, and The Mercat Group, an informal network of former chief executives of Scottish local authorities with over 220 years of public service between them, including 70 years as chief executives, are today announcing a collaboration.
Jointly, Reform Scotland and The Mercat Group will advocate for decentralisation of power from the Scottish Parliament to local authorities, along the lines originally envisaged by the architects of the devolution project.
The collaboration begins today with an article – Parliament or Council?: 25 years of evidence– written on behalf of the Mercat Group by Bill Howat, former Chief Executive of Comhairle Nan Eilean Siar, in which he states that “any reasonable, rational review of that evidence could only conclude that it has not been a success in terms of devolving power beyond Edinburgh”.
Bill Howat, former Chief Executive of Comhairle Nan Eilean Siar said:“Any reasonable, rational review of that evidence could only conclude that it has not been a success in terms of devolving power beyond Edinburgh. In fact, all the evidence points to growing centralisation of power in Holyrood. That is not good for local democracy, nor does it seem like good governance.
“There is now a need to revisit and reset the way all public services in Scotland are organised, delivered and financed. We should create a Scottish Civic Convention to take forward the public conversation necessary to conduct such a review.
“There may be other options but the central aim should be to develop a transition plan to ensure decisions on the delivery of all public services are taken at the lowest local level consistent with democratic and financial accountability.
“Scottish local government is in danger of becoming the delivery arm of the Scottish Government; indeed some would argue we have already reached that position. We might fairly ask: has Holyrood become Scotland’s biggest council?”
Chris Deerin, Director of Reform Scotland, said:“At a quarter-century old, now is the time to re-examine those areas of devolution which have not delivered as we all hoped they would. Local government is one of these.
“Other countries enjoy the benefits of properly empowered local government, fulfilling most of the day-to-day operational roles upon which people depend, with central government adopting a more strategic outlook.
“In Scotland, we are failing to realise the potential of local freedom and diversity. Decentralisation is long overdue, and we are delighted to be teaming up with the Mercat Group to generate the ideas needed to make it happen.”
Bill Howat’s blog – Parliament or Council?: 25 years of evidence – can be read here
Public services will come under further threat if the Scottish Government does not set out and deliver a clear and costed vision for public service reform, says Scotland’s spendingwatchdog Audit Scotland.
Spending pressures have become more acute in recent years and are forecast to grow. But ministers have continued to rely on short-term decisions to balance the books, rather than making fundamental changes to how services are delivered.
Public service reform is a key component of the Scottish Government’s approach to fiscal sustainability. But there is no evidence of large-scale change on the ground, while the Scottish Government:
has not yet fully established effective governance arrangements for a reform programme
does not know what additional funding is required to support reform
and has not provided enough leadership to help public sector bodies deliver change.
The Scottish Government has not been transparent enough with the Scottish Parliament or the public about the medium-term risks it is facing.
The medium-term financial strategy and financial plans for the NHS and infrastructure investment have all been delayed. The absence of these documents makes scrutiny of the current uncertain financial situation more difficult.
Stephen Boyle, Auditor General for Scotland, said: ““People do not fully understand the medium-term risks public services are facing because of a lack of transparency from the Scottish Government.
“The reality is that we need a fundamental change to how public money is spent to ensure services can meet demand and remain affordable beyond the short-term.
“To turn that into action on the ground, the Scottish Government must set out a clearer vision of what its plans for reform will achieve, including delivery milestones and the likely impact of reform on services and people.”
Budget speculation, the economy returns to growth, the impact of cuts, and the disability employment gap
Three weeks still to go, and speculation about what will be in the Budget on 30th October continues (writes Fraser of Allander Institute’s MAIRI SPOWAGE, SANJAM SURI and EMMA CONGREVE).
Will the Chancellor change her fiscal rules? It looks likely that there will be some movement on this, whether in the definition of debt or something more fundamental, however much that could undermine their commitments in the manifesto.
Will there be increases in Capital Gains Tax? The speculation on this has reached fever pitch, with some stories suggested rates from 33% to 39% are being considered. (Interestingly, when we look at the ready reckoners from the HMRC, changes of this magnitude in some forms of CGT actually may result in less revenue when behavioural effects are taken into account). There certainly seems to be expectations out there in the economy that the rate may change, with lots of signs that disposals have increased hugely in anticipation.
Will there be increases to employer national insurance contributions? There has been much discussion about this, given the commitment of the UK Government not to “raise taxes on working people”, and due to the fact that the PM would not rule this out this week. A 1 percentage point rise in employers NICS would raise almost £9bn according to the ready reckoner (although we think that doesn’t include the additional costs to departments).
We’ll be going into the detail of some of these issues in the run up to the Budget, so there will be plenty for you all to chew over as we wait… and wait… for the Budget.
UK Economy Returns to growth in August
Data released this morning showed that the UK economy posted its first monthly GDP increase since May 2024. ONS reported this morning that monthly real GDP grew 0.2% in August 2024. There were no revisions made to the “no growth” months of June and July. While monthly numbers were in line with consensus forecasts, they show an economy that has slowed down from the beginning of 2024.
The good news is that growth in August came from all key sectors- with services rising by 0.1%, and production and construction rising by 0.5% and 0.4% respectively. Crucially- August was also the first time all three sectors positively contributed to growth since March 2024.
A more granular breakdown of service sector growth indicates that the biggest positive contribution came from the professional, scientific, and technical activities subsector- where monthly change in output was +1.6% from the previous month. Despite overall growth in services sector- seven subsectors saw decline in economic activity- with arts, entertainment, and recreation falling 2.5% over July 2024.
The production sector grew by 0.5% in August after hefty decline of 0.7% in July. Despite a rebound in August, the production output is essentially flat since the end of May 2024. The biggest contributor to production sector came from 1.1% rise in manufacturing activity- driven by transport equipment manufacturing However, mining and quarrying output declined 4.0% over July 2024- continuing their downward trend since end of December 2023.
What is the impact of cuts in spending?
When the Scottish Government presented their Fiscal Statement to parliament in early September, the Cabinet Secretary for Finance said that impact assessments had been done to understand the impact that the announced cuts could have on different groups.
These assessments were not published at the time, but finally were published last week. We welcome the publication of these, and although there are lots of criticisms that could be made of the assessments, it is good to see this transparency. One area of weakness is assuming that if funding was maintained at previous levels, there will be minimal impact, which assumes that previous levels was the correct level… so why was the budget being increased in the first place?
One of the main things to note though is the lack of analysis of cumulative impact on groups. A number of “minimal impacts” could still add up to something significant if they are affecting the same group.
Final report of the parliamentary Inquiry into the disability employment gap published
In 2016, the Scottish Government published A Fairer Scotland for Disabled People, which outlined how the government intended to shape policy – especially labour market policy – for disabled people living in Scotland.
One of the key goals this report outlined was reducing the gap in the employment rate between disabled and non-disabled adults. In 2016, 80.4% of non-disabled working aged adults were employed in Scotland, compared to 42.8% of disabled working aged adults, making for an employment gap of 37.5 percentage points. The government’s goal was to cut this gap in half by 2038.
In 2023, the Economy and Fair Work Committee in Scottish Parliament launched an inquiry into how this policy goal was going. In fact, in 2023, it seemed like it was going quite well.
The gap was down to 30.3 percentage points, which was actually ahead of schedule: if progress were linear, the disability employment gap would drop by about 0.85 percentage points each year, meaning that it would be 31.5 percentage points in 2023.
Two of our economists at the FAI, Allison Catalano and Christy McFadyen, contributed to this inquiry through a fellowship with the Scottish Parliament Information Centre (SPICe). Their work, which we published back in January, found that the majority of the change in disability employment is due to a rise in disability prevalence, rather than any specific policy.
Their report also highlighted some significant data issues: people with different types of disability have vastly different capacities for employment, vastly different support needs within employment, and vastly different rates of employment. Yet, in Scottish data and policymaking, disabled people are often treated as a singular entity, meaning that it is not possible to understand where policy interventions might be most effective.
The final inquiry publication highlights our work and a variety of other issues which will need to be addressed in order to improve work access for disabled people, all of which can be found here. They have produced 44 recommendations to improve employment prospects for disabled people.
Industrial action looming across Scotland paused as members vote
GMB Scotland today suspended looming industrial action in Scotland’s local authorities after receiving a revised pay offer.
The union, one of the biggest in Scotland’s local authorities, paused eight days of strikes in waste and cleansing, due to start on Wednesday, to allow members to vote on the new terms.
GMB Scotland’s local government committee met this morning to discuss the offer from Cosla, representing Scots councils, involving a 3.6% increase for all grades with a rise of £1,292 for the lowest paid, equivalent to 5.6%.
Keir Greenaway, GMB Scotland senior organiser in public services, said: “This offer is a significant improvement on what came before but our members will decide if it is acceptable.
“It is better than that offered to council staff in England and Wales, would mean every worker receives a rise higher than the Retail Price Index and, importantly, is weighted to ensure frontline workers gain most.
“As a gesture of goodwill, we will suspend action until our members can vote on the offer.
“It should never have got to this stage, however, and Scotland’s council leaders have again shown an absolute lack of urgency or sense of realism.
“For months, we have been forced to waste time discussing a series of low-ball offers when it was already clear the Scottish Government needed to be at the table.
“The obvious reluctance of some council leaders to approach ministers has only caused needless uncertainty and threatened disruption.
“That is no way to run a railroad or conduct serious pay negotiations.”
UNITE has also called off imminent strike action and UNISON are expected to announce their position later this afternoon.
