Scotland Finance

Scottish Budget: our reaction


Photo Credit: Scottish Parliament via Compfight cc

Yesterday the Scottish Government published its draft budget, the first in which new tax raising powers will be accommodated and the first since Brexit.

Local government funding has been one of the big talking points leading up to this budget with rumours of deep cuts to local authority budgets and the ‘redistribution’ of locally collected education funding.

The headlines for Scottish local government are:

It’s hard to find out exactly what the financial implication for local authorities might be. Derek MacKay has stated that there will be an extra £240m for councils, consisting of the uplift in rates for Council Tax bands E-H and a 3% increase allowed by government, plus other initiatives. The Scottish Conservatives argue that the reality is a cut of £130m.

There will be £60m more money for early learning and childcare.

There will be £47m to local authorities to mitigate the impact of the ‘bedroom tax’.

There will be £357m transferred from NHS Boards to Integration Authorities.

It’s a mixed story on education. While the government have backtracked on their plan to take £100m from increased council tax, a new £120m fund will go from Scottish Government straight to head teachers bypassing local authorities. There will be a ring fenced £88m to maintain pupil:teacher ratios.

There is £470m for housing, which looks like the Scottish part of the national infrastructure fund announced in Westminster.

There is little detail yet for local authorities. Dundee City Council will receive money for the Dundee Central Waterfront Growth Accelerator.

There will be £140m for energy efficiency and £100m for digital and mobile infrastructure.

The government will continue to push for Councils to spend 1% of their budget on ‘Community Choices’.

Andy Johnston, Director of LGIU Scotland said:

“If there are cuts, it doesn’t look as if they’re as bad as expected and, as ministers are keen to point out, not on the scale seen down south.

It may seem odd to focus on what didn’t happen when commenting on this budget, but the principle of ‘no taxation without representation’ has been upheld. Taking locally collected taxes and spending them on education outside of that locality, without the permission of those taxpayers, would have violated that principle. The Scottish Government have listened to representations from local authorities.

As ever, the devil is in the detail and as the government has no majority that detail will be negotiated in the next few weeks. LGiU Scotland will continue to blog as supporting documents are released and we’ll produce a full briefing once government and parliament have clarified the data. In the new year we will brief on the funding settlement for local authorities.”