Independent survey shows benefits to children and families
The vast majority of parents using Scottish Government-funded Early Learning and Childcare (ELC) are satisfied with its quality, according to new research.
In an independent survey with more than 8,000 respondents, 97% of parents and carers with a three to five-year-old said they had accessed funded ELC places since August 2021 – and of those, 97% were satisfied with the quality of provision.
A total of 88% of those with a three to five-year-old were satisfied that they could use their funded ELC hours in a way that meets their family’s needs.
The main reasons parents and carers said they used ELC were to benefit their child’s development, confidence, independence and learning.
Survey respondents also valued the opportunities that funded ELC gave them to work, look for employment or to undertake education and training. Others reported that it alleviated stress and meant they had more time for themselves and their families.
Across Scotland, all three and four-year-olds and two-year-olds who need it most can access up to 1,140 hours of funded ELC a year. If families paid for the 1,140 hours themselves, it would cost them around £5,000 per eligible child per year.
In 2023-24, the Scottish Government will invest around £1 billion through local government in funding for the 1,140 hours offer.
Children’s Minister Clare Haughey said: “I am really encouraged to see such a high level of satisfaction among parents with the quality of the funded Early Learning and Childcare they have received.
“Scotland is the only part of the UK where all three and four-year-olds and eligible two-year-olds can access up to 1,140 hours of funded ELC a year. As this independent survey demonstrates, funded high-quality ELC brings a range of benefits to families, including helping children’s educational development and supporting parents’ ability to work and find employment.”
COSLA Children and Young People spokesperson Councillor Tony Buchanan said: “I welcome the publication of this report, which provides valuable insights into parents’ use of, and views on, Early Learning and Childcare provision in Scotland.
“The findings clearly show the significant impact that the increased entitlement to 1,140 hours of funded ELC is having, and indicate high levels of satisfaction and positive experiences amongst those parents who responded to the survey, including in relation to flexibility, accessibility, and quality of provision.
“Local Government is committed to continuing to work with our partners to ensure that funded ELC provision works for parents, carers, and children, including considering how remaining challenges might be addressed.”
Budget sets out £4.85 billion investment in Education and Skills
A range of measures to help children, parents and carers with costs around school have been set out in the Scottish Government’s budget. These include expansion of free school meals in primary schools, holiday food provision and investment to ensure the school clothing grant national minimum of £120 for primary pupils and £150 for secondary pupils.
The spending plans for 2023-24 allocates £4.85 billion of funding across the education and skills portfolio, including measures to address the cost of living crisis.
New investment will see free school meals expanded to primary six and seven pupils in receipt of the Scottish Child Payment – the next step in Scottish Government plans to deliver universal free school meals in primary schools.
It also includes £22 million of continued support to provide meals during the school holidays to children who need them most, along with £200 million for the Scottish Attainment Challenge.
In addition, the budget allocates £50 million of funding to continue to support the Whole Family Wellbeing programme of activity, a key pillar of The Promise, to support families to thrive.
Education Secretary Shirley-Anne Somerville said: “I am committed to improving the life chances of all Scotland’s children, young people and learners. The measures set out in these spending plans are driven by our ambition to enable everybody to reach their full potential.
“We know the toll that the cost of living crisis has taken on families and households across Scotland and investment is being made in a range of important measures which will help mitigate the impact of this.
“The expansion of free school meals in primary schools continues, providing a benefit in kind of around £400 per child for families, while the ongoing investment in the school clothing grant and access to digital devices will help those who need it most.
“Our ongoing commitment to free university tuition means that, unlike elsewhere in the UK, Scottish domiciled students do not incur additional debt of up to £27,750, and average student loan debt in Scotland remains the lowest in the UK.
“In Scotland we also have the most teachers-per-pupil, along with the highest per-pupil education spend anywhere in the UK. We will continue to provide local authorities with funding of £145.5 million per year to support the teaching workforce, as part of the overall local government settlement of £13.2 billion.
“Our commitment to closing the poverty related-attainment gap remains paramount and that is why we will invest a further £200 million next year in the Scottish Attainment Challenge – as part of our £1 billion commitment in this Parliament.”
The measures set out in the budget to help reduce the cost of school include:
Providing more than £13 million to uprate the School Clothing Grant in line with inflation.
Investing an additional £16 million resource and £80 million capital to fund the expansion of Free School Meals for all Primary 6 and 7 pupils in receipt of the Scottish Child Payment, as the next step in fulfilling the commitment to universal provision in primary schools
Continuing to invest £22 million to provide meals during school holidays to the children who need them most.
Maintaining subsidy arrangements for the provision of milk and working with partners on a phased approach to the delivery of a universal milk scheme, aligned to the expansion of free school meals.
Investing £20 million towards the commitment to ensure every school-aged child, over the lifetime of the parliament, has access to a digital device to support their learning
Investment of nearly £2 billion towards Scotland’s universities and colleges to support delivery of high-quality education and training. This includes a cash increase of £20 million in the Higher Education resource budget compared to 2022-23, and a cash increase of £33.7 million in the Further Education resource and capital budget.
Fuel Insecurity Fund extended to help fuel poor households
Thousands of vulnerable households will be supported by the continuation of the Scottish Government’s uprated £20 million Fuel Insecurity Fund.
Announced as part of last week’s Scottish Budget 2023-24, the investment will enable third sector partners to continue to provide support to households who are at risk of self-disconnection or self-rationing their energy use.
While the Scottish Government remains committed to engaging with the UK Government to deliver a referendum on Scottish Independence, funding that was originally earmarked for a referendum in 2023 will now be used to help tackle fuel poverty.
Last week’s Scottish Budget included additional steps to address inequality while tackling the climate emergency including increased investment of over £366 million next year to support the delivery of the Heat in Buildings Strategy. It forms part of a package of measures introduced by the Scottish Government to protect the most vulnerable households from the impact of the current cost of living crisis.
The decisions taken through the Emergency Budget Review in November enabled the Scottish Government to provide additional immediate support to people most impacted by the cost of living crisis, specifically rising energy prices, by doubling the Fuel Insecurity Fund to £20 million this year. The Scottish Budget is now protecting that investment into 2023-24.
First Minister Nicola Sturgeon and Minister for Zero Carbon Buildings Patrick Harvie met with people on the frontline of tackling fuel poverty, while visiting the Wise Group in Glasgow, a social enterprise working to lift people out of poverty by providing mentoring support to help with employment and life skills and offering energy advice.
First Minister Nicola Sturgeon said: “People across our country are paying a steep price for the economic mismanagement of the UK Government, with the cost of living forcing many to choose between heating their home or eating – the Fuel Insecurity Fund aims to stop that happening.
“The Scottish Government has, and always will, use its currently limited powers to the maximum extent in order to meet the challenges being faced by the people of Scotland right now. Powers relating to energy markets are reserved to the UK Government, so I am renewing my call for further and more urgent action, to support the most vulnerable households.
“With this intervention – as with many others the Scottish Government has set out – we are having to divert funding into policies that aim to minimise the impact on people as a direct result of UK Government policy.
“The full powers of independence would enable us to make different choices and help people facing the devastating consequences of the cost of living crisis.”
Minister for Zero Carbon Buildings and Tenants’ Rights Patrick Harvie said: “Everyone needs a safe, warm and affordable place to call home and yet despite this we know that many people are struggling under the weight of their energy bills and wider cost of living pressures.
“Last week, the Scottish Budget confirmed £366m for insulating homes and buildings and tackling fuel poverty as part of our £1.8 billion commitment to Heat in Buildings over this Parliament.
“That is essential work to make sure that Scotland has warmer homes which are cheaper to heat for decades ahead. We also need the full range of powers on matters like energy pricing, consumer protection and energy supply to make the biggest possible difference.
“But right now, the Fuel Insecurity Fund is a lifeline to many people struggling most with fuel poverty which is why we have made the commitment for next year.”
Minister welcomes figures showing more students are finding work
Higher Education and Further Education Minister Jamie Hepburn has welcomed figures showing the proportion of college leavers going on to positive destinations is at a record high.
Figures from the Scottish Funding Council show that 91% of those completing college courses and leaving the college sector in 2020-2021 were in positive destinations, including further study, training, or employment, within three to six months.
That is an increase of 6.6 percentage points on the previous year.
Of those leaving the college sector, almost half (49.3%) gained employment within three to six months, with over two-fifths (41.7%) going on to further study at university.
The proportion who were unemployed or unavailable to work fell to a record low of 9%, down from 15.6% in 2019-2020.
Higher Education and Further Education Minister Jamie Hepburn said: “It is fantastic that nine out of 10 full-time college leavers are going on to positive destinations.
“These figures clearly show the crucial contribution that Scotland’s colleges make to equipping their students with the skills and training they need to take their next steps.
“The growth in the proportion of college-leavers securing employment, as the job market continues to recover following the pandemic, is an important sign of progress in strengthening Scotland’s economic prosperity.
SNP MSP Gordon Macdonald has welcomed the announcement of a new Winter Heating Payment from the Scottish Government.
Around 27,500 households across the city are set to receive the new payment which replaces the old Cold Weather Payment from the UK government which relied on the temperature dropping to a certain level before payments were triggered.
The Scottish Government’s Winter Heating Payment will pay a flat-rate of £50 in February, no matter the temperature, to people on low-incomes who qualify.
Commenting, Gordon said: “The Winter Heating Payment will be the 13th social security benefit set up by the Scottish Government and demonstrates what we can do with limited powers to build a fairer, more equal Scotland.
“It is a welcome step that the new payment will move away from the UK government’s system of issuing support when the temperature drops to a certain level. This will provide a reliable payment for households every winter.
“The new payment is another social security payment that is unique to Scotland and builds on support already available through game-changing benefits such as the Scottish Child Payment – the only payment of its kind in Britain.
“However, the Scottish Government continues to act with one hand tied behind its back. Only with the full powers of independence can we truly provide a system that works for the people of Scotland, not against them.”
COSLA: COUNCIL SERVICES AT SEVERE RISK AS SCOTTISH GOVERNMENT FAILS TO RESPOND TO SOS CALL
The Scottish Government has failed to respond in its Budget in any meaningful way to COSLA’s SOS calls. This means that Councils are left at real financial risk for the coming year, and it will be the people of Scotland and our communities who suffer as a result.
Following a full meeting of Council Leaders yesterday (Friday 16th December) COSLA said it was extremely disappointed that once again Local Government and the essential services it delivers have not been prioritised by the Scottish Government in Thursday’s budget announcement.
Council Leaders also expressed their extreme disappointment with the settlement for Local Government and with its presentation which lacks consistency with a partnership approach.
As part of offering up a solution, Leaders called on the Scottish Government to pause the current plans for structural change required to set up the National Care Service and redirect the funding allocated within the Scottish Budget into social care and preventative services through Local Government.
Speaking yesterday COSLA’s Resources Spokesperson Councillor Katie Hagmann said: “Council Services will now be at absolute breaking point and some may have to stop altogether.
“This is a result of cuts to our Councils’ core budgets and direction on spend towards other Scottish Government priorities over the last few years. Yesterday’s budget announcement compounds this and there is a real risk that many of our essential services will not only be cut but may have to stop altogether.
“Council Leaders were unanimous today that we need to work together, with one Local Government voice, to raise our concerns at the highest level.
“The Fraser of Allander Institute has already commented on the settlement stating that although Scottish Government has presented a cash increase for Local Government, Councils will see a “real-terms decrease relative to a GDP deflator of 4.9%.”
COSLA President Councillor Shona Morrison added: “The reality of the situation is that yet again, the essential services Councils deliver have not been prioritised by the Scottish Government.
“COSLA asked for £1bn but from our initial assessment of the Budget, we believe that Local Government will see an uplift of only £71m once policy commitments are taken into account. Whilst the decision to allow councils the freedom to set their own council tax rates is welcomed, scope will be extremely limited this year, as councils seek to protect the most vulnerable in our communities, recognising the cost-of-living crisis.
COSLA Vice President Councillor Steven Heddle said: “Yes, money is tight, but Scottish Government has made political choices. Cuts to our core budget hit the most vulnerable in our communities the hardest and are damaging to our workforce – Scottish Government needs to consider this seriously.
“That is why Council Leaders were unanimous today that we must fight for a fairer settlement.”
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”.
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.”
Finalised Action Plan ‘sets out net zero opportunities’
A pathway to help make Scotland a world leader in hydrogen production has been published, but campaigners are questioning the suitability of hydrogen for most sectors.
The Hydrogen Action Plan sets out steps to help the emerging hydrogen sector in Scotland achieve an ambition of 5 Gigawatts (GW) of renewable and low-carbon hydrogen – equivalent to a sixth of Scotland’s energy needs – by 2030.
It also reaffirms an ambition to produce 25 GW by 2045, with a hydrogen economy potentially supporting more than 300,000 jobs.
Capitalising on the potential for Scotland to become a leading exporter of hydrogen is estimated to contribute between £5 billion and £25 billion a year by 2045 depending on the scale of production and the extent of exports.
The Scottish Government is making available £100 million to support the Action Plan, including a £90 million Green Hydrogen Fund, which will open early next year.
Net Zero & Energy Secretary Michael Matheson said: “Hydrogen could present Scotland’s greatest industrial opportunity since oil and gas was discovered in the North Sea.
“The technology has tremendous potential to help deliver a just transition for our energy sector, realising huge economic benefits while supporting our net zero transformation.
“Scotland has vast natural resources with which we can become world leaders in renewable hydrogen production and export, while others are looking beyond their borders to nations that can produce and provide that hydrogen at scale.
“Our Hydrogen Action Plan reaffirms the Scottish Government’s clear commitment to helping our hydrogen sector grow and prosper. We are open to the world and actively collaborating with international partners in order to realise the benefits of hydrogen.”
Climate campaigners have responded to the Scottish Government’s new ‘Hydrogen Action Plan’ by questioning the suitability of hydrogen for most sectors and highlighting the cost and inefficiency of the technology.
Friends of the Earth Scotland’s Climate Campaigner Alex Lee said: “Hydrogen is inefficient, faces costly technical barriers and is unnecessary or unsuitable in most sectors. Evidence shows that blue hydrogen made with fossil gas, which Ministers want to label as low-carbon, doesn’t deliver meaningful cuts to climate emissions.
“It is welcome that the Scottish Government has heeded the overwhelming scientific consensus on the inefficiency and high cost of using hydrogen to heat our homes. It looks like that this will not be a priority in Scotland but the Plan still suggests that the Scottish Government may attempt to blend hydrogen into the gas grid and potentially invest in ‘hydrogen ready’ boilers in new build homes.
“The Plan also backs hydrogen buses and cars despite the fact electric vehicles are streets ahead in terms of efficiency and public awareness.”
“The Government still seems to be falling for industry spin that dodgy technologies like Carbon Capture and Storage and Direct Air Capture will cut climate pollution. For decades carbon capture has failed to work at the scale promised and the few plants that have been built have been plagued by technical problems and closures.
“It’s time the Scottish Government accepted that carbon capture is not the magical solution it hopes and focused its energies on measures to cut emissions in the here and now.
“The forthcoming Energy Strategy is a chance for the Scottish Government to invest in solutions we know actually work like heat pumps and insulating homes that can help people in Scotland with their bills and unlike dodgy hydrogen help us tackle climate change.”
Spending plan ‘will protect families and public services’
The 2023-24 Scottish Budget will take a distinctive approach to creating a fairer, more equal Scotland, Deputy First Minister John Swinney said.
He stressed the three Budget priorities of eradicating child poverty, strengthening public services and moving towards a net zero economy were strongly linked and would give more people the opportunity to flourish.
Ahead of delivering the Budget to Parliament today, Mr Swinney visited a scheme in Wester Hailes, delivered by City of Edinburgh Council and part-funded by the Scottish Government, installing insulation for households at risk of fuel poverty.
He said: “I was encouraged to see the vital work being carried out to improve energy efficiency and make homes warmer for families facing significantly higher bills this winter. This scheme highlights how tackling the increased cost of living can assist our drive towards net zero, and is an example of the importance of effective public services.
“Our Budget goals are mutually beneficial and represent a distinctive approach to the economic challenges we face. The Scottish Budget will take further steps to address inequality and eradicate child poverty. It will encourage a just transition to net zero, creating wealth and opportunity across the country. And it will be the catalyst for reforms necessary to ensure our first-class public services remain sustainable in the face of the challenges to come.
“I would like to go even further but the cost of living crisis has also laid bare the fiscal constraints of devolution, as we cannot borrow to support day to day expenditure when times are hard to assist us through these difficult days. It is clear that businesses and households are paying a steep price for the economic mismanagement of the UK Government.
“The cost of living crisis requires decisive action. In setting this Budget, the Scottish Government will use its limited powers to the maximum extent that is responsible, to meet the challenges faced by the people of Scotland.”
The Scottish Budget 2023-24 will be presented to the Scottish Parliament TODAY (Thursday 15 December).
The outlook for Scotland’s budget in 2023-24 has undoubtedly been made more challenging due to factors wholly outwith the control of the Scottish Government, but there are decisions that Deputy First Minister John Swinney can make to ease the path ahead for Scotland, according to a report published yesterday by the Fraser of Allander Institute.
In its-pre Budget report, the University of Strathclyde-based Institute says that in the face of high inflation, the UK Government’s Autumn Statement provided some comfort with additional transfers that will more or less offset the impacts of inflation over the next two years.
The Scottish Government now needs to set out how it will use its significant devolved tax powers and whether to use them to generate more revenue for public services, including public sector workers.
The Resource Spending Review, published in May this year, provided a blueprint for spend over this parliament, but we have already seen deviations from planned spend in this financial year, and changing priorities may see further revisions when the draft Budget is set out on the 15 December.
The Fraser of Allander Institute’s annual pre-budget report, published today (12 December) examines the context to the budget and the key decisions facing the Scottish government in 2023-24.
Its findings include:
the economic situation has deteriorated markedly since the 2022-23 budget was presented, with high inflation set to eat away at living standards over the next two years.
the high inflation environment eroded the value of the Scottish Government’s budget in 2022-23 meaning that the present financial year’s budget is worth about £1bn less in real terms
Despite fears of cuts to the near-term budget, the announcements made by the UK Chancellor more or less offset the impacts of inflation on the Scottish budget in 2023-24 and 2024-25
the Scottish Government has significant devolved tax powers and therefore has decisions to make on Thursday about whether or not to use them to generate more revenue for public services.
Professor Mairi Spowage, Director of the Institute, said: “John Swinney is getting set to present his first budget in seven years, in what he has acknowledged is an unprecedentedly tricky time for the Scottish public finances.
“The challenges he has been dealing with for 2022-23 ease a bit for 2023-24: there was some additional money announced at the Autumn Statement which generated around a £1bn of consequentials, offsetting the inflationary pressures on the budget.
“But there are also flexibilities that the Deputy First Minister has for the next financial year that were not available to him for this year – the Scottish Government does have tax powers that could be used, if he wishes, to raise more revenue.”
Emma Congreve, Deputy Director, said: “In amongst all the headline-grabbing decisions, it will be important to take a step back to see how this Budget helps Scotland achieve its long term ambitions.
“We are expecting that the government will set out, clearly and transparently, the choices it has made and what the impact, both good and bad, will be for policy outcomes and the impacts on different groups.”
