Budget Bill 2017-2018: Stage 3 debate introduction

Cabinet Secretary for Finance and the Constitution Derek Mackay MSP introduces the Budget Bill 2017 to 2018 for the third stage of debate.

Presiding Officer, I am delighted to lead this debate on the Budget Bill for 2017 to 2018.

Firstly, I'd like to confirm that I responded formally to the Finance Committee report on the budget on Tuesday. I would like to commend the Finance Committee and all the Subject Committees for their constructive approach.

Our process in future will continue to adapt to our new powers, and I look forward to seeing the output of the Budget Review Group and to working together with all members of Parliament to ensure our future processes are fit for our new powers and responsibilities.

Presiding Officer, this is a Bill of huge importance to Scotland. The decisions we make today underpin the work of our public services, our commitment to sustainable economic growth and the support we provide to communities and individuals across the country.

The Bill before us today seeks Parliament's approval for an additional £900 million of expenditure focussed on the positive vision for Scotland established in our Programme for Government.

That vision is focussed on:

  • stabilising and growing our economy;
  • empowering our communities;
  • protecting our environment;
  • promoting equality; and
  • improving our public services.

The budget we are voting on today includes areas of compromise where, as a minority government, we have worked hard to secure support for the Bill in order to deliver on our commitments and protect Scotland's hard-won social contract. I once again thank those who engaged constructively in those discussions.

As a result I believe this Bill offers a balanced approach that is right for our economy, for jobs and our public services, as well as providing stability and continuity for the public and taxpayers at a time of economic uncertainty.

As we debated on Tuesday, the Scotland Act powers mean there is a much more direct link between Scotland's economic performance and the revenues available to fund our public spending.

The decisions we make must have economic growth at their heart. In the Draft Budget I confirmed our £500 million Scottish Growth Scheme, funding for City Deals and interventions such as funding for the new Innovation and Investment Hubs in Dublin, London, Brussels and Berlin.

Our support is also confirmed for the Aberdeen, Glasgow and Highland deals; they will total over £760 million in the years to come and we are continuing discussions on Lothian, Tay Cities as well as the Ayrshire growth deal.

We are using all the economic levers at our disposal and I am pleased to confirm further progress today. I have this week confirmed the Scottish Government's formal approval of Fife Council's tax incremental financing (TIF) scheme, which will enhance the Fife Energy Park and is projected to unlock more than £11 million for the Scottish economy and create more than 220 jobs.

As well as taking forward the Fife scheme, I look forward to receiving applications next week for the two fresh TIF opportunities announced in the Budget.

Overall, in 2017 and 2018 we will see investment of around £4 billion in key infrastructure projects up and down the country.

Projects across our roads and transport programmes, such as:

  • the M8/M73/M74 improvements,
  • the Queensferry Crossing, which will complete this year,
  • the A9,
  • the Aberdeen Western Peripheral Route (AWPR), and
  • the Edinburgh to Glasgow Rail Improvements Programme.

We will invest to deliver ambitious targets on affordable housing and invest also in the key area of digital infrastructure, including our commitment to reach 100% broadband coverage.

There are actions to address climate change and improve energy efficiency – reducing bills, creating jobs and reducing emissions.

In addition, to assist the work of our Enterprise Agencies, our Draft Budget provided an increase in resources for Highlands and Islands Enterprise (HIE) and, at Stage 1 of the Budget, I confirmed an additional £35 million for Scottish Enterprise, to support loans and equity investments.

A fair and competitive business rates regime is crucial to our economy.

The Draft Budget took a range of early measures ahead of the revaluation, including cutting the tax rate and extending the Small Business Bonus to deliver our commitment to ensure that more than 100,000 businesses pay no rates at all.

The additional measures I have taken, warmly welcomed by the business community, will help a further 9,500 business premises and, as a result of our £660 million of investment in rates relief, ensure seven out of ten premises in Scotland will pay either the same, less or no rates from 1 April.

The Tories and Labour, having failed to support any local rates reliefs so far, should deliver on their rhetoric and back the Government schemes tonight, that have provided relief across the country.

Investment now in infrastructure and support for business needs to be complemented with investment in our people, in our services and in our communities.

Education is this Government's number one priority and this Budget backs that up with a comprehensive package of investment.

The Bill delivers over £1.6 billion of investment in higher and further education, ensuring that access for eligible students is free and maintaining at least 116,000 college places.

It maintains the £50 million Attainment Scotland Fund, to provide targeted support.

It provides £120 million directly to our schools to address attainment, particularly in our most disadvantaged areas, welcomed by schools across the land.

And we embark on expanding childcare. £60 million of investment in the first phase of work to expand the provision of early learning and childcare to 1,140 hours by the end of this Parliament.

This package of measures places equality of opportunity right at the heart of this Government's approach to Scotland's economy.

I proposed a strong settlement for local government in the draft budget. It included the additional £120 million for educational attainment, £107 million additional investment in health and social care, increased capital resources, access to City Deals and increased revenues from council tax changes approved by this Parliament.

By working constructively with the Green Party, I added to that proposal at Stage 1 with a further investment of £160 million to be spent at the discretion of individual authorities.

The council tax freeze provided much-needed relief for household budgets through difficult times. Council tax is on average is still lower in Scotland than south of the border.

While local authorities are able to generate extra revenues through increasing the council tax, some clearly consider that they have sufficient funding to deliver their services.

These are matters for individual local authorities but, I say again, support for local services has increased thanks to this Government.

Using existing resources wisely, a further public service reform is also necessary.

As just one example, recognising the role that councils play in the delivery of housing and social care, I am directing additional funding over the next two years to Scotland Excel, to develop with Scotland's care providers and Registered Social Landlords, enhanced procurement capability that will support plans in these vital areas.

We are backing our police and fire services, investing in reform with an additional £25 million for Police Scotland to support their future plans.

To ensure that our NHS is fit for the future, this Government is committed to the twin approach of investment and reform. The Health and Social Care Delivery Plan, published shortly after the Draft Budget, highlights a range of steps to reform and further improve our health services.

Balancing that action with investment will see NHS revenue spending increase to £12.7 billion in 2017 and 2018 – an increase of £120 million above inflation and the first step towards delivering on our commitment to increase the NHS revenue budget by almost £2 billion by the end of this Parliament.

Within that, we will for the first time in 2017 and 2018 see investment in mental health exceed £1 billion and additional investment of £72 million in primary care and GP services, as we increase the budgeted spend on primary care by £500 million by the end of the Parliament.

And we have today confirmed investment of £7.5 million to support the development of GP clusters, which will help GP practices to collaborate on quality improvement, share resources and develop community health services that are more tailored to their local population.

Presiding Officer, I opened today by highlighting that voting for this Budget will deliver over £900 million of additional investment in our public services, our people and our communities.

While this Budget delivers on this Administration's Programme for Government it also responded to requests from across this chamber.

  • Support for businesses and our economy;
  • increasing frontline health and police budgets;
  • expanding expenditure on local authority services;
  • delivering a living wage;
  • investing in a new social security system;
  • ensuring no one should pay the bedroom tax;
  • free tuition;
  • expanding early years provision and tackling of the attainment gap;
  • improved energy efficiency;
  • increased house building;
  • and it supports public services that are free at the point of use – including prescriptions, eye tests and personal care.

Presiding Officer, this budget delivers the best deal for tax payers and public services in the whole of the UK.

A fairer country, a stronger country and a budget that delivers for our people.

I commend it to Parliament.


Email: ceu@gov.scot

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