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The Scottish Budget

Deputy First Minister, John Swinney, has presented the Scottish Parliament with Scotland’s Budget for the winter ahead of us. As can be expected reaction to the budget is determined by whichever political party or ideology a politician adheres to.

Let’s take a look.

First off – the Scottish Parliament is a devolved one – which means it has to work within limitations laid down by the UK Parliament. It cannot just magic up money but has to work within the boundaries placed upon it, but it does have some leeway when it comes to limited tax raising powers.

Money raised in Scotland is paid into the UK Treasury and then a portion of that is given back to Scotland via the ‘Barnet formula’, in addition to that, Scotland can now change (within limits) rates of Income Tax paid in Scotland. Local Councils in Scotland can also raise taxes – and many, like Orkney, did so this year with Council Tax. Local Councils can also implement tourist levies and when it is eventually introduced there are additional powers locally with Short Term Lets.

What is in the Scottish Budget?

  • Over £13.7 billion to our NHS boards across Scotland
  • £2 billion to establish and improve primary healthcare services locally
  • £1.7 billion for social care and integration for establishing a National Care Service
  • £428 million to uprate devolved benefits in April 2023 by September’s Consumer Price Index inflation level of 10.1%. (The Scottish Child Payment has already been increased to £25 per week)
  •  £20 million to extend the Fuel Insecurity Fund
  • Over £366 million to be invested in delivering the Heat in Buildings Strategy in 2023-24. 
  • £1 billion investment in high quality early learning and childcare provision
  • £22 million invested in holiday food provision and expanding support for school-age childcare
  • £50 million for the Whole Family Wellbeing programme for preventative co-ordinated family support
  • £30 million to keep The Promise to care experienced children and young people
  • £80 million capital funding to support the expansion of free school meals
  • Over £550 million additional funding to Local Government
  • £165 million additional funding for frontline justice services and to continue with transformational reforms
  • £46 million increase in resource funding to universities and colleges

Click on this link to find out more: Scottish Budget: 2023-24

Political Reaction

Orkney Constituency MSP, Liam McArthur, LibDem, has focussed on funding to support the islands ferries which are run by Orkney Islands Council via Orkney Ferries.

Liam McArthur said:

“In the face of soaring inflation, fuel, and maintenance costs, John Swinney is proposing a real terms cut to support for Orkney’s internal ferry services. This can only result in the delivery of these lifeline services becoming even more difficult and precarious.

“SNP Ministers previously accepted the principle of fair funding for Orkney and Shetland’s internal ferry services, but that promise now appears to have been chucked overboard.

“Meanwhile, Mr Swinney is promising more talks with OIC over the replacement of the ageing ferry fleet. That’s all very well, but we’ve been hearing that from Ministers for years. With public safety now flagged as a risk, island communities in Orkney desperately need and deserve to see ferries procured, built and put into service. Mr Swinney and his colleagues cannot keep kicking the can down the road.”

Leader of Orkney Islands Council James Stockan, independent, has described John Swinney’s response to the OIC’s plea for more funding for replacement ferries as ‘extremely promising’. James Stockan said:

“The letter from John Swinney, coming so soon after the budget statement, gives me confidence that our messaging on this is getting through to them and that they have a good grasp now on the challenges we are facing and the role that the Scottish Government could, and should, play in meeting those challenges.

“2023 will bring a great deal of work for the Scottish Government and our officials as we plot a course forward – and I look forward to keeping our isles communities, for whom these lifeline services are so vital, updated on progress.”

John Swinney has committed to setting up a joint taskforce with the council to look at options for ferry renewals.

2021-22 Budget
2022-23 Budget
2023-24 Budget
Scottish Budget 2023-24

Around 1,150 households in Orkney are set to receive the new Scottish Government Winter Heating Payment.

It replaces the old Cold Weather Payment from the UK government which relied on the temperature dropping to a certain level before payments were triggered.

The Scottish Government’s Winter Heating Payment will pay a flat-rate of £50 in February, no matter the temperature, to people on low-incomes who qualify.

Commenting Highlands and Islands MSP, Emma Roddick, SNP, said:

“As many are all too aware, my region experiences some of the highest levels of fuel poverty in the country. Folk in the Highlands and Islands are being hit the hardest by the rising cost of energy and other goods and services.

“The Winter Heating Payment will be the 13th social security benefit set up by the Scottish Government and demonstrates what we can do with limited powers to build a fairer, more equal Scotland.

“It is a welcome step that the new payment will move away from the UK government’s system of issuing support when the temperature drops to a certain level. This will provide a reliable payment for households every winter.

“The new payment is another social security payment that is unique to Scotland and builds on support already available through game-changing benefits such as the Scottish Child Payment – the only payment of its kind in Britain.

“Although I’m disappointed a referendum on Scottish independence will not go ahead next year, I am glad to see the Scottish Government prioritising our most vulnerable and alleviating some of the pressures facing so many in my region thanks to the UK Government.

“The damage that is being done to households across the Highlands and Islands and the rest of Scotland by unfair UK energy policy is just another case of how this union is failing Scotland.

“Whilst this extra funding will no doubt mitigate some of the devastating impacts of Tory welfare decisions, Scotland needs the full powers of independence to be able to build a fair system that delivers for those who need it most.”

All this needs to be paid for and John Swinney announced in his Budget new rates for Income Tax in Scotland which will see higher earners paying more.

  • 39% of Scottish adults (1.8 million individuals) are not affected by the 2023-24 policy changes as their income is below the UK-wide Personal Allowance.
  • The policy changes also have no effect on the lowest earning 9% of taxpayers (or 5% of adults) who earn less than £14,732 (and pay the 19p Starter Rate).
  • Those earning less than £27,850 – which is 52% of Scottish taxpayers (1.47 million people) – will continue to pay slightly less Income Tax in 2023-24 than if they lived elsewhere in the UK.

Click on this link for more information on Tax Rates:

What happens next?

These are proposals so this Budget now goes before MSPs in the Scottish Parliament for scrutiny where amendments can be suggested.

You can watch the Ministerial Statement from John Swinney on the proposed Scottish Budget here:

Fiona Grahame

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