Scotland's Economy

Ten things you need to know about the Scottish Budget

Written by News Team

SCOTTISH Finance Secretary Kate Forbes delivered a budget statement yesterday which she said sought to build on the hope provided by the Covid vaccine programme now underway.

With that programme, she said, ‘’there is some light at the end of the tunnel. This budget seeks to build on that hope and seeks to make that light shine that little bit brighter.’’

The statement focuses on three key priorities: creating jobs and supporting a sustainable recovery, responding to the health pandemic and tackling inequalities.

The Scottish Fiscal Commission has warned that the economy will not return to pre-pandemic levels until 2024.

Here are the 10 main points of the budget:

1: Income Tax

Most Scottish tax payers will pay slightly less in income tax this coming year than they did last year. And most will pay less tax than those living in other parts of the UK.

The Scottish tax bands will remain the same, although the rates will increase with inflation. The top tax rate will be frozen at £150,000.

2: Business support

The Strategic Framework Business Fund, which helps businesses cope with coronavirus, will continue to support businesses beyond the end of this financial year … if money from the UK government is forthcoming.

The poundage rate of non-domestic rates is to be cut for the first time in the history of devolution.

Digital connectivity has become “absolutely fundamental” during the Covid pandemic, says the finance secretary. She will allocate almost £100m for improvements to ensure more people have access to 4G and 5G broadband coverage.

More than £230m will be invested to ensure diverse cultural heritage jobs are protected.

Annual investment in infrastructure will be £1.5bn by 2025, supporting 45,00 full-time equivalent jobs across the period.

3: Health and Wellbeing

More than £16billion will be invested in health and sport … an increase of more than £800m to the core budget. The ongoing response to coronavirus has been allocated £869m. Other payments include £145.3m to tackle alcohol and drugs – an increase of more than £50m this year to reduce drug deaths as part of a five-year £150m commitment. More than £1.1 billion more will go to improving mental health services and support. Ms Forbes said: ‘’We know that the pandemic has taken a huge toll on mental health.’’

4: Local authorities

Councils will be given financial incentives to freeze council tax for the year ahead. An extra £90m will be made available to Scotland’s 32 councils if they keep council tax at the present levels.  A £90m scheme to compensate councils for the loss of income has been more than doubled to £200m. That takes the total support for councils’ losses to an additional £249m.

5: The Housing Market

A nil rate of Land and Building Transaction tax levied last year on home purchases up to £250,000 will, as planned, end and will return to £145,000 from April 1.

6: The Environment

An additional £150m will be allocated for woodland and forestry over the next five years to help Scotland achieve its net-zero target on carbon emissions.

The next financial year will see the first phase of a five-year, £100m jobs fund and a commitment to establish a Green Jobs Workforce Academy.

The Infrastucture Investment Plan, published next week, will outline a “pipeline of projects” designed to help Scotland reach net-zero carbon emissions.

7: Public Sector Pay

Scottish public sector workers earning less than £25,000 will receive a three per cent pay rise. Ms Forbes confirmed she will use the real living wage at the increased rate of £9.50 an hour to guarantee the rise.

8: Child Poverty

This will be tackled with a £21m commitment for the introduction of a Scottish child payment and a £3m increase in funding for the Scottish Welfare Fund. It is estimated that almost one in four of Scotland’s children live in poverty.

9: Education

More than £3.1bn will go to  resource and capital investment for education and skills,and £567m to provide 1,140 hours of early learning and childcare.

10: Regeneration

A new 355m programme to support town centres and community-led regeneration projects.

 

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