by the Deputy First Minister
Budgets are about choices. They are a distillation of what defines a government, a demonstration in pounds and pence of its priorities and its values.
At the heart of this budget is the social contract between the Scottish Government and the people of Scotland. A contract that ensures a progressive mix of universal and targeted entitlements. From free prescriptions to free access to higher education and the Scottish Child Payment.
A social contract where the tax contribution is based on the ability to pay, and strong public services are understood as enabling a strong society and a growing economy. An approach that sets Scotland apart from the rest of the UK – a beacon for progressive policies amid the thickening fog of Westminster austerity.
This is a budget which leaves no stone unturned as we prioritise what really matters. Supporting people through the cost of living crisis, investing in our frontline public services, and tackling the climate emergency head on.
But it does so in a context of a fiscal settlement from the UK Government that undermines the viability of public services across the whole of the UK. Of the funding provided at the Chancellor’s Autumn Statement in November, only £10.8 million was generated for Scotland as a result of the UK Government’s spending decision on Health for the coming financial year, the equivalent of around five hours of capacity for NHS Scotland.
Under his own fiscal rules, the Chancellor had the opportunity to invest £27 billion in core public services and critical national infrastructure. Instead, the UK Government has chosen to double down on its failed policy of austerity, prioritising tax cuts for the wealthy in advance of the coming General Election – putting party interest before the national interest. Our Barnett funding, which is tied to UK Government spending decisions, has fallen by 1.2 per cent in real terms since 2022‑23.
Since 2017‑18 our distinct approach to Income Tax rates and bands as compared with elsewhere in the UK means Scotland will have around £1.5 billion of additional revenue in this Budget. That is why we will continue to push for the devolution of greater tax and borrowing powers to help us better protect the people of Scotland and its public services from the chaos of dysfunctional UK governments. This can only ever be a sticking plaster.
Devolution can serve as a shield that only partially helps to mitigate against Westminster austerity, it is only with independence that Scotland can chart its own course to grow a wellbeing economy to help its people in the way that serves them best.
We have been compelled to take painful and difficult decisions in order to prioritise funding in the areas which have the greatest impact on the quality of life for the people of Scotland. We make no apology for deploying the levers available to us to deliver on our values – protecting people and optimising services.
In setting this budget the Scottish Government has adopted a values‑based approach focused on our three missions.
- Equality – Tackling poverty and protecting people from harm
- Opportunity – Building a fair, sustainable and growing economy
- Community – Delivering efficient and effective public services
We recognise that we cannot address the challenges before us by continuing to deliver public services in traditional ways.
This is a budget that is building on the twin approach of delivering investment and driving the reform of our public services. We are responding to these challenges positively and proactively to deliver an ambitious ten‑year programme of public service reform. This is how we will ensure that our public services remain fiscally sustainable, improve outcomes and support the people and communities who need them most.
As the cost of living crisis and further Westminster austerity continue to impact families across Scotland, the Scottish Government has choices about how to use our devolved tax powers to generate additional funding, whilst building the progressive approach to tax we are proud of.
Combining changes to the tax and social security systems together, 58 per cent of households are better off under the Scottish system than in the rest of the UK, with the majority of these in the bottom half of the income distribution.
The Scottish tax policy decisions taken in this Budget, including both Income Tax policy changes and the freeze in Council Tax, provide a net benefit to around 60 per cent of Scottish households.
This is a Budget which binds the Government and the people of Scotland into a social contract that delivers for our nation and builds on the strong foundations provided by our partnership with the Scottish Green Party and the progressive policy programme set out in the Bute House Agreement.
Through this Budget we will be:
- Giving our NHS the protection of an uplift above real terms in the face of UK Government austerity by investing over half a billion in our frontline boards – taking total investment to £13.2 billion in the year ahead.
- Delivering our national mission to tackle inequality by committing £6.3 billion in social security benefits and payments, just over £1 billion more than in 2023‑24 – enabling disabled people to live full and independent lives, supporting older people to heat their homes in winter, and helping low‑income families with their living costs. This includes increasing the Scottish Child payment in line with inflation to £26.70 a week, giving more support to over 323,000 under 16s who receive it.
- Investing £1.55 billion in policing, increasing the Scottish Police Authority resource budget by 5.6 per cent – providing an additional £75.7 million to support frontline service delivery. We will also support Scottish Fire and Rescue Service (SFRS) deliver with a resource uplift of £13.6 million and increasing capital investment by £10.3 million to £43 million.
- Maintaining our commitment to invest £1 billion over the course of this parliament to tackle the poverty-related attainment gap, with £200 million to be distributed in 2024‑25 – providing vital long‑term targeted investment to improve outcomes for children and young people and help break the cycle of poverty.
- Funding the £12 per hour real Living Wage for adult and children’s social care and early learning and childcare workers in the private, voluntary and independent sectors who deliver funded provision.
- Helping households through the cost of living crisis by making available an additional £144 million of funding to councils who agree to fully fund a council tax freeze in 2024‑25 (equivalent to a five per cent increase). Combined with the other support being provided to local government this will increase their overall funding by six per cent since the last budget.
- Helping more people install clean heating systems and make their home more energy efficient by investing £358 million in the coming year – tackling emissions and supporting the creation of jobs.
- Supporting the green economy and future jobs by investing £66.9 million to kickstart our commitment of up to £500 million to anchor a new offshore wind supply chain in Scotland.
- Ensuring people have access to viable alternatives to car use by spending nearly £2.5 billion on public transport and lifting active travel funding to £220 million in the year ahead.
- Commencing work on dualling the Tomatin to Moy section of the A9 and investing in the next phases of the A9 dualling programme.
We will always be open and honest with the public about the choices that we have made. We have faced calls to replicate Non‑Domestic Rates Retail, Hospitality and Leisure relief available to businesses in England. While we are sympathetic to these calls, replicating this temporary relief would have meant that we could not provide our NHS, schools, or emergency services with the funding that they require. We also could not have continued to ensure that over 95 per cent of non‑domestic properties remain liable for the lowest non‑domestic rate in the UK, or provided a package of relief worth £685 million, including the most generous Small Business Bonus Scheme in the UK, therefore maintaining a competitive non ‑ domestic rates system in Scotland.
In recent times it has been necessary for our public sector to adapt to respond to the Brexit crisis, the conflict in Ukraine, tackling the climate crisis, delivering new powers in Social Security and the ongoing response to the COVID‑19 pandemic. In addition to reforming the way in which public bodies deliver services we will also need to consider our future workforce plans to ensure public services are sustainable in the long term.
We have always said that to truly transform our economy, society, and public services, and to reap the benefits of Scotland’s resources for current and future generations, we need the full powers of independence and to retake our place in the European Union. The UK Autumn Statement is simply the latest example of why Scotland must walk a different path.
Despite these barriers this is a budget which stays true to our progressive values and what it means to call Scotland home – protecting the vulnerable, investing in services, growing our economy, and tackling the climate emergency.
Shona Robison MSP, Deputy First Minister and Cabinet Secretary for Finance
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