Implementation of the Scotland Act 2016: third report

We produce this statutory report annually to inform Parliament of the implementation work we have done on fiscal powers in the Scotland Acts 2012 and 2016.

Foreword by the Cabinet Secretary for Finance, Economy and Fair Work

Derek Mackay MSP

This report demonstrates the continuing progress made over the past year in operationalising the Fiscal Framework and implementing the wide range of powers devolved under the Scotland Acts 2012 and 2016. Once all Scotland Act 2016 tax powers are implemented, it is expected that around half of the Scottish Government's budget will come from devolved or assigned revenues.

We have used these powers to make significant changes, particularly with regard to Scottish income tax with the introduction of two new bands and a change to some rates. I have committed to maintaining the new structure of income tax for the remainder of the Parliament. As such, the 2019-20 Scottish Budget made no changes to rates, and did not introduce or remove any bands. This ensures that 55% of Scottish taxpayers continue to pay less than they would if they lived elsewhere in the UK, and Scotland continues to be the fairest taxed part of the UK.

Preparations continue to ensure the smooth transition of social security and employability powers. The Scottish Government is committed to using these powers to create a Scottish social security system based on dignity, fairness and respect which will help to support those who need it, when they need it. Our top priority is to ensure the safe and secure transition of the 11 social security payments for the 1.4 million people who rely on them.

The Social Security (Scotland) Act 2018 received Royal Assent on 1 June 2018 and Social Security Scotland was established in September 2018 as an Executive Agency of the Scottish Government. The Agency's first payments of Carer's Allowance Supplement were made in September 2018 and the Best Start Pregnancy and Baby Payment was launched on 10 December.

I welcome the Scottish Parliament's continuing scrutiny of and interest in the range of work to implement these powers.

Derek Mackay MSP



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