Funding announced to help tackle the cost of living crisis.
The 2022-2023 Scottish Budget Bill has been backed by MSPs.
During the Stage 3 debate in the Scottish Parliament, Finance Secretary Kate Forbes announced a further £290 million in financial support to help address the rising cost of living.
Ms Forbes said that while the Scottish Government is awaiting final confirmation from the Treasury on funding allocations, the £290 million for Scotland announced by the Chancellor of the Exchequer last week is not likely to mean net additional funding. This is due to an expected reduction of a similar amount in other consequential funding previously anticipated through the forthcoming UK Government Supplementary Estimates.
Despite these budget pressures and existing support in place to help people, Scottish Ministers have honoured the commitment to allocate £290 million to help tackle the cost of living crisis and are going further to ensure those hardest hit have support. New measures announced include:
- £280 million to provide £150 to every household in receipt of Council Tax Reduction in any Band and to provide £150 to all other occupied households in Bands A to D. This means 1.85 million households, or 73% of all households, will receive financial support through their council tax bill or a direct payment
- £10 million in 2022-23 to continue the Fuel Insecurity Fund to help households from rationing their energy use
This is in addition to the £120 million previously announced for local government in 2022-23.
A further £39.5 million has also been allocated to businesses from the £375 million of Omicron business support funding for the current financial year. Following consultation with businesses, who asked for financial support to now focus on economic recovery, this funding will help support local economies and cities continue their economic recovery and help build a more resilient economy. Funding allocated includes:
- £16 million for culture and major events
- £7.5 million to support inbound tour operators
- £6.5 million to support the childcare sector
- £3.5 million for outbound travel agents
- £3 million for city centre recovery
- £3 million to help digitalise SMEs to increase competitiveness, productivity and drive growth
Ms Forbes said:
“Large rises in energy bills, increased costs on every day essentials, rising interest rates and the UK Government’s new National Insurance hike are causing huge concern and worry, and people are struggling. These additional costs will hit the most vulnerable in our society, the hardest.
“That is why we will honour our commitment, whatever other Budget challenges we face, to pass on the full £290 million to help families now. I am therefore today announcing that there will be three elements to the package of support today.
“Firstly, we will provide £150 to every household in receipt of Council Tax Reduction in all Council Tax bands. The Council Tax Reduction Scheme already identifies households in greatest need and will allow us to target this intervention.
“Secondly, I will provide local authorities with funding to pass on £150 to other occupied household in Bands A to D in Scotland. In total, combining these elements, 1.85 million, or 73% of all households, will receive £150 of support. I know that the cost of living crisis is affecting households who are not in receipt of benefits, who are not claiming a Council Tax Reduction. And they are facing hardship too. We must seek to do what we can to prevent those households and families on the edge of the poverty line, from falling over it.
“Thirdly I am also announcing £10 million in 2022-23 to continue our Fuel Insecurity Fund to help households at risk of self-disconnection, or self-rationing their energy use, due to unaffordable fuel costs.
“Households across Scotland, across the UK, are struggling with the wide range of rising costs and many of the macro levers, for example, around energy regulation reside with the UK Government. That is why I will be writing to the Chief Secretary to the Treasury, again highlighting that we must work together urgently so we can use our joint powers to do more to tackle the cost of living.”
The additional £290 million package announced today for 2022-23 will be given effect via in-year budget revisions.
Households will receive a singular payment - households receiving Council Tax Reduction will receive payment irrelevant of their Band and for those who pay regular Council Tax, eligible households in Bands A to D will receive payment.
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