Tag: Scottish Budget 2024 – 25

Holyrood approves Scottish Budget

Spending plans for 2024-25 approved

The Scottish Budget has been approved by Parliament, ensuring funding can be targeted towards the missions of supporting public services, growing the economy and tackling poverty.

MSPs have passed the 2024-25 Scottish Budget Bill, with spending commitments including:

  • £13.2 billion for frontline NHS boards, over £1.5 billion for policing and nearly £400 million to support the fire service
  • Over £5 billion to help create jobs, support businesses, aid the transition to net zero and fund public transport to provide viable alternatives to car use
  • £6.3 billion for social security benefits, £200 million to help tackle the poverty-related attainment gap and £1.5 million to cancel school meal debt 
  • Over £14 billion for local authorities – the highest settlement yet delivered for local government

Deputy First Minister and Finance Secretary Shona Robison said: “I am pleased that Parliament has approved our Budget, allowing us to enact our spending plans in the face of a deeply challenging financial situation.

“This is a Budget which stays true to our progressive values: investing in services, growing our economy, protecting vulnerable people and tackling the climate emergency.

“We have taken decisions which prioritise funding in the areas that have the greatest impact on the quality of life for the people of Scotland – despite the challenges caused in large part by the UK Government’s failure to invest in public services and infrastructure.

“Our block grant funding from the UK Government has fallen in real terms since 2022-23. Our capital spending power is due to contract by almost 10 per cent in real terms over five years – that’s around £1.6 billion in total, equivalent to the cost of building a large hospital.

“I have written to the Chancellor urging him to change course, using next week’s Spring Budget to increase funding for public services and infrastructure instead of cutting taxes.”

Scotland’s local government umbrella body Cosla fears the Budget will mean more misery for cash-strapped councils.

Budget (Scotland) (No.3) Bill – stage 3 debate: Deputy First Minister speech

Scottish Budget faces difficult choices in challenging circumstances, says Finance Committee

The Scottish Government’s budget for 2024/25 has been set amidst a context of persistently high inflation, low growth and high interest rates amidst deep cuts to capital funding.

In its budget report published on Wednesday, Holyrood’s Finance and Public Administration Committee looks at the choices the Scottish Government has made, including on taxation.

Finance and Public Administration Committee Convener Kenneth Gibson said: “Significant pressure on Scotland’s public finances have presented difficult tax and spending decisions in the budget. Everybody recognises that.

“The Scottish Government priorities are based on delivering its three ‘missions’ of equality, opportunity and community.  However, there was a great divergence in views from witnesses on what those priorities should be, with the focus understandably in areas where budgets will be reduced rather than increased.

“The committee is unclear how spending has been prioritised towards a fair, green and growing economy.

“Regarding taxation, there is uncertainty about the behavioural impact on taxpayers earning more than £75,000 per year and when there will be a fundamental review of the council tax.

“The Scottish Government needs to deliver long-term financial planning. At present it gives the impression that it’s procrastinating on important decision-making that would help the sustainability of Scotland’s public finances, albeit in the medium and longer-term.

“The Committee is also disappointed at continuing cuts to the capital budget by the UK Government which restricts the Scottish Government’s ability to invest in capital projects, achieving net zero and growing the economy.”

On public service reform Mr Gibson added: “The Scottish Government’s public service reform programme is critical to the sustainability of the Budget and ensuring effective delivery of public services.

“While the government has set out principles and objectives for its reform programme there are few other signs of progress. This is disappointing given the urgent need for reform.

“We need to see the government develop and deliver its reform programme at a quicker pace in the months and years to come.”

The report also says that the Scottish Government must explain why it has delayed:

  • the public sector pay policy 2024-25
  • an updated infrastructure project pipeline and
  • a financial strategy for public service reform.
FINANCE-and-PUBLIC-ADMINISTRATION-CTTEE-REPORTDownload

£144 million will not fully fund a Council Tax freeze, says COSLA

£144 million does not fully fund a council tax freeze, COSLA Resources Spokesperson Councillor Katie Hagmann has explained.

Ms Hagmann said: “Disappointingly the Scottish Budget has not provided our local authorities with a fully funded council tax freeze as expected.

“The Scottish Government has set aside £144m stating this will ‘fully fund’ a council tax freeze – this would only provide the income equivalent to a 5% rise.

https://twitter.com/i/status/1744409879027110392

“However, Local Government’s core revenue budget was cut by £63m from the outset,  essentially leaving just £81m compensation for a council tax freeze. As a result, Local Government is faced with the reality that the funding offered for a council tax freeze only equates to a 2.8% rise.

“This significantly adds to the pressures faced by councils – a recent LGIU survey found that 83% of Scottish councils were looking at a minimum increase of 5%.”

COSLA’s Budget Reality document:

Budget-Reality-24-25-updated-21.12.23Download

COSLA: ‘Poverty gap in Scotland will continue to grow’

‘A BUDGET OF MISSED OPPORTUNITIES ON TACKLING POVERTY AND LITTLE FOCUS ON PREVENTION’

COSLA has described the Scottish Government’s Draft Budget as a missed opportunity for the communities of Scotland in relation to tackling poverty.

COSLA also added that Scotland’s Council Leaders, Councillors, the Local Government Workforce and communities should be treated with the respect they deserve demonstrated through investment, not cuts.

COSLA said:  “At a special meeting just before Christmas, there was dismay and frustration from Scotland’s Council Leaders about the way Local Government and the communities we represent had been treated in the Scottish Government’s Draft Budget.  As the Budget currently stands, communities will see and feel a range of negative impacts.

“COSLA’s ‘Councils are Key’ budget lobbying campaign set out the case for fair funding that would allow Local Government to deliver for the people of Scotland, particularly around tackling poverty, one of the three shared priorities laid out in the Verity House Agreement.

“The response from the Scottish Government to our Budget ask is disappointing and will mean that the potential that councils have to prevent problems occurring will be limited severely.

“Specifically on poverty, the Budget should have had a focus on tackling the root causes of poverty, particularly its impacts on children. This would have needed a greater prioritisation of the work councils do in prevention and early support.

“The essential social supports councils provide in homes, schools, hubs and communities that aim to support and empower people will be further eroded – this has been the case for a number of years now, due to poor Local Government settlements that cut core funding.

“Services that support Local Government to Keep the Promise made to Scotland’s care experienced children and young people like family support and youth work, are under threat as a result of the proposed Scottish budget. 

“Tackling poverty in Scotland will continue to be a significant challenge when councils do not have the resources they need to support communities.

“This year’s Budget presented the opportunity prioritise prevention and tackle inequity, to invest in communities and realise our ambitions to end poverty in Scotland.

“It did not deliver. Without a fair settlement for Councils, the poverty gap in Scotland will continue to grow. Investing in Local Government is key to a fairer Scotland.”

“The proposed Council Tax Freeze means that money which could have been invested in tackling poverty upstream – in families, communities and schools – is lost, missing a real opportunity to unlock Councils’ potential.

“COSLA’s President, Vice President and political Group Leaders from all parties have written to the Deputy First Minister and are seeking an urgent meeting.  

“Council Leaders will not let this lie, they simply cannot afford to because it will have such a detrimental impact on the communities they represent.”

STUC Women’s Committee calls for tax raising measures to protect public services

  • Investment in public services benefit women
  • While all households benefit from public services – some benefit more than others

Research from 2007-08 found that the average cash benefit to households from public services was more than £21,400 per year – but that those on low and modest incomes gain especially.

Spending on public services is particularly valuable for families with children.

We know that women use and depend upon public services more than men. This is because women are more likely to be on low wages, more likely to experience poverty, more likely to have unpaid caring responsibilities for children, elderly, and disabled people, and far more likely to experience domestic abuse and gender-based violence. Services that support families on low incomes including free school meals and childcare are vital to women in Scotland.

In contrast, men disproportionately benefit from tax cuts, such as cuts to national insurance, as they earn more. Across the UK, 26% of men are classed as high earners, but only 18% of women.iii

As well as being more likely to benefit from receiving public services, women are also more likely to work in public services. In Scotland, 40 per cent of female employees are public sector workers compared to only 23 per cent of male employees.

Research from last year found that a 12% increase in public sector pay would reduce Scotland’s earnings gap between men and women by about 2 percentage points.iv

The STUC Women’s Committee is calling for tax raising measures to be put in place to protect our public services. This includes increases in income taxes for high earners, as well as wealth and property taxes.

Lorna Glen, Chair of the STUC Women’s Committee said: “If the Scottish Government are serious about tackling gender inequality, then they need to invest in our public services.

“STUC’s tax report shows that is within the powers of our parliament – through income and property taxes – to raise £1.1 billion from April next year. Coupled with longer-term wealth, property and aviation taxes, the Scottish Government could raise a further £2.6 billion.

“Rather than threatening cuts to public services, these are the measures that we need to see if we are to reduce gender inequality.

“It is women who both power our public services and depend on them.”

The Scottish Budget will be announced tomorrow.