In today’s budget statement for Scotland, headlines have focused on changes to income tax with those earning over £43,662 paying an extra penny in the pound (taking it to 42p) and the top rate of tax increasing from 46p to 47p.
This budget centres around delivering three key priorities:
- Eradicating child poverty
- Transforming the economy to deliver a just transition to net zero
- Providing sustainable public services
To follow today’s budget, LGIU Scotland will provide further briefings on key programmes and development in the weeks to come.
Highlights for local authorities
- This budget provides over £550 million of additional funding to the Local Government settlement, which goes beyond existing commitments. It also reconfirmed the Scottish Government’s commitment to a new deal for local government, recognising the importance of partnership, collaboration and accountability in delivering high quality person centred services.
- The Scottish Government said it will continue to work closely with COSLA to agree a New Deal for Local Government.
- From 1 April 2023, local authorities will have full discretion over Empty Property Relief for Non Domestic Rates supported by £105 million added to the settlement to support local priorities including the option to develop local relief schemes. The Scottish Government will also seek to empower councils by bringing forward new regulations to tackle non domestic rates avoidance loopholes which reduce public revenues.
- Business rates will be frozen at 2022 levels until April 2024.
- Councils will continue to have the freedom to raise council tax.
The Capital budget for 2023/24 is £5.94 billion. This includes:
- £1.2 billion investment in rail, bus and active travel infrastructure.
- Almost £400 million in the Heat and Buildings strategy and energy innovation.
- Over £835 million investment in the Scottish Government’s economy and public services – prioritising the best value investments being delivered with partners, including enterprise agencies, Scottish National Investment Bank, City Region and Regional Growth Deals programme.
- £746.6 million in Local Government capital investment.
- £752 million in the affordable housing supply programme.
- £566 million additional capital funding to support families and young people through education and skills.
1) eradicating child poverty
- This budget commits to the delivery of the Scottish Child Payment, uprated to £25 per week in November 2022.
- Provides £20 million to extend the Fuel Insecurity Fund into 2023-24.
- Provides £50 million for the whole family wellbeing programme for preventative, holistic, family support and a further £30 million to #KeepThePromise to care experienced children and young people.
- Maintains £200 million annual investment in the Scottish Attainment Challenge to increase the pace of progress on closing the poverty related attainment gap.
2) Transforming the economy to deliver a just transition to net zero
- This budget increases investment to over £366 million in delivering the Heat in Buildings Strategy in 2023-24 which includes the development of low carbon infrastructure projects such as heat networks and measures to tackle fuel poverty.
- This is part of the Scottish Government’s commitment of £1.8 billion over this Parliament to accelerate the deployment of heat and energy efficiency measures as they aim to decarbonise over a million Scottish homes by 2030.
3) providing sustainable public services
- This budget will increase spending on health and social care in Scotland by £1bn.
- Provides £1.7 billion for social care and integration to improve services while paving the way for the introduction of the National Care Service.
- Invests £160 million to address the ongoing public health emergencies and to reduce the avoidable harms associated with drugs and alcohol. This continues the Scottish Government’s commitment to provide £250 million additional funding over the life of this parliament to address the drugs death emergency.
- Provides an additional £100 million to support the delivery of the £10.90 real living wage for adult social care, building on the increase provided in 2022-23.
Jonathan Carr-West, Chief Executive, LGIU Scotland, said:
“Today’s budget saw Deputy First Minister John Swinney attempting to reach out to local government by promising additional funding and acceding to COSLA’s request to allow councils more freedom over council tax rates. Scottish councils will now be poring over the detail to see how much real additional money sits behind the headline of £550 million.
Moreover, local government in Scotland will still be left wondering how, indeed if, it fits into the Government’s overall vision.
While Mr Swinney was keen to position his budget in counterpoint to the UK Government, he risks repeating Westminster’s error in protecting the NHS at the expense of local government when we know that the preconditions for good health rely on effective leadership of place and an integration of services that only local democratic institutions can provide.”
These are just initial reflections from the announcement. Stay tuned as the LGIU will soon provide in-depth analysis and breakdown of all the announcements today. It will be critical to understanding the distribution of how the £550 million to local governments will protect services and deliver the much-needed financial sustainability for Scottish local government.
Members can read this backgrounder briefing for more context on why this budget is being dubbed ‘the most challenging budget since devolution started‘