“As a parliament of minorities, we must work across the chamber to find compromise and consensus in order to give support, sustainability and stimulus to our economy and to our public services.” 

These were the words of Derek MacKay, Finance Secretary in the Scottish Government when he presented his updated Draft Budget to the Scottish Parliament on Wednesday 31st January 2018.

The Draft Budget was first put before Scotland’s parliamentarians on the 14th December 2017. The weeks since then has seen intense negotiations being conducted and for us in the Northern Isles that centred particularly around the issue of fair ferry funding for our boats that ply the routes between our islands.

Leader of Orkney Islands Council James Stockan must be given full credit for his hard work and perseverance in pursuing this for Orkney and gaining the support of the SNP and Scottish Green Party. Liam MacArthur and Tavish Scott of the Liberal Democrats also voted for this Budget despite the fact that the other 3 LibDem MSPs voted against it.

James Stockan said:

“A huge effort has gone into this. We wrote individually to every MSP. We followed that up by writing to all the party leaders at Holyrood. I also met face to face with each of the List MSPs for our region.”

Reaction has been swift from Orkney’s political parties.

Steve Sankey

The Scottish Greens who have one councillor in Orkney, Steve Sankey commented:

““Greens are showing what can be achieved when parties are serious about negotiating a good deal for local communities. This fair funding deal is so important to Orkney and will go a long way in protecting jobs and local services.”

Donna Heddle convener of Orkney SNP said:

Donna Heddle

“We are delighted that the SNP Scottish Government has delivered on its pledge for fair ferry funding for Orkney’s internal ferries, as they committed to do in their manifesto. This promise of a more substantial funding package, which Orkney Islands Council has been calling for, is a major boost for Orkney, where sustainable ferry links are so key to the economic and social future of our islands.”

Orkney will receive additional funding of £6.634million with £5.5million of that for ferry fares.

For Shetland the additional funding is £6.270million with £5million of that for ferry fares. 

What else is in the Scottish Budget?

• increases funding for the NHS by £400 million
• invests in the expansion of early learning and childcare
• delivers on commitments to broadband
• supports the building of 50,000 new homes
• backs small businesses and innovation
• funding for frontline police and fire services

On public sector pay – all public sector employees earning up to £36,500 receive a minimum 3% pay increase.  75% of public sector workers, including NHS staff, will benefit from an inflationary pay rise.

Income Tax

The Fact Sheet on the updated Income Tax rates can be viewed and downloaded here 

Compared to rUK  – 55% of tax payers in Scotland will pay less and 45% will pay more.

“Due to the introduction of the Starter Rate and the increase in the Personal Allowance, every Scottish taxpayer earning less than £33,000 in 2018-19 (1.8 million tax payers) will pay less income tax than they did in 2017-18, for a given level of income.”

Income Tax Bands

Derek MacKay said:

Derek MacKay (Photo Scot Gov)

“We are lifting the pay cap with a real terms increase in pay for the majority of public sector workers and we are supporting local services with a real terms increase for day to day spending and for long term investment, with an additional £170 million going into local services, on top of the £10.5 billion already proposed.

“Our changes to tax ensure Scotland has a progressive tax system – with 70% of taxpayers paying less next year than they do currently and 55% paying less than they would across the rest of the UK – while businesses benefit from support for investment.”

John Finnie MSP, Scottish Green Party

Local MSP John Finnie, Scottish Greens said:

“I am delighted that my Green MSP colleagues and I have been able to conclude this deal which will ensure fair ferry funding for the good folk of the northern isles.”

And local MSP Maree Todd, SNP commented:

“I am absolutely delighted that fair ferry funding has been delivered in the Scottish budget. We already delivered reduced ferry fares for the Northern Isles and now we are delivering on fair internal ferry funding too.

“I have been advocating for fair ferry funding for some time – everyone agreed that fair funding was required for internal ferries and recognised that they are lifeline services.

Maree Todd MSP

“I’m pleased that the discussions between both island councils and the Scottish Government have been so fruitful and agreement reached.

And on the other funding announced in the Budget Maree Todd said

“I know from speaking to councillors that they are really happy with the extra money for schools coming from the Pupil Equity fund. This is a Scottish Government fund aimed at boosting the attainment levels of the most deprived pupils and is set to pay out £232,200 to schools in Orkney next year, and £233,880 to schools in Shetland.”

But it is really to the Leader of Orkney Islands Council that we should leave the last word due to his sterling efforts in securing the funding for the ferry fares.

Leader of Orkney Islands Council James Stockan

“This result could not have been achieved without the unstinting and unanimous support of our Elected Members. Our regional transport partnership, HITRANS, and officers of the Council have worked tirelessly over the last four years in building a compelling case for fair funding for our ferry services. This successful outcome also depended on us working closely with our Northern Isles colleagues, Shetland Islands Council, Shetland’s transport partnership, ZETRANS, and in particular Council Leader Cecil Smith.”

Derek MacKay stated that the extra funding for ferry fares in the Northern Isles is part of a longer more complex process looking at our ferries.

James Stockan said:

” We still need to secure recurring support – so that our internal ferry service is fully funded year on year by the Government.

“That would be a first step on the road to for the sort of ferry service we aspire to for Orkney – with new and improved vessels operating a more frequent service to our isles communities, with fares that match those provided elsewhere in Scotland. We have agreement with the Scottish Government to move forward on these aspirations.”

What happens next with the Budget?

The Scottish Budget has passed Stage 1 in the Parliamentary process with votes from the SNP, Scottish Greens and 2 Liberal Democrats. The Conservatives, Labour and 3 Liberal Democrats voted against it. It has to pass stage 2 and 3 which will be reached on 21st February 2018. It can be further amended at stage 2 and will not be finally passed until voted on at Stage 3. This ensures there is proper scrutiny in our legislative process.

Reporter: Fiona Grahame