The Scottish budget and the spending plans for the Highlands
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Deputy First Minister and finance secretary Shona Robison has delivered the Scottish Budget promising to reaffirm “Scotland’s social contract” amid the usual conflicting views between parties and accusation of missed opportunities.
An analysis by the Fraser of Allander Institute ahead of the budget said Ms Robison had a £1.5 billion financial black hole to plug and given the Scottish Government’s inability to borrow she is legally bound to deliver a balanced budget.
The highly controversial headline move was to create an "advanced" level of 45 per cent income tax band will be introduced for those earning between £75,000 and £125,140.
The top rate of tax, paid by those with earnings of £125,000, will rise from 47 per cent to 48 per cent.
Her decisions left the Scottish Conservative shadow secretary for finance Liz Smith unhappy as: “This budget was as dismal and damaging for Scottish taxpayers and businesses as we had feared.”
Scottish Labour’s shadow for finance, Michael Marra said: “This is a chaotic budget from an incompetent government that will leave ordinary Scots paying much more and getting much less in return.”
While Liberal Democrat leader Alex Cole Hamilton said: “The SNP has spent years ignoring expert warnings about the lack of a long-term economic strategy and the impact of its failure to grow the economy.”
Ms Robison said: “At its heart is our social contract with the people of Scotland, where those with the broadest shoulders are asked to contribute a little more.
“Where everyone can have access to universal services and entitlements, and those in need of an extra helping hand will receive targeted additional support.”
She added: “We choose investment in our people and public services. This is a Budget that reflects our shared values as a nation and speaks to the kind of Scotland that we want to be.”
So what is the outlook for the Highlands? Here are some key numbers:
The A9 is set to receive funding for work to commence on the Tomatin-Moy section of the dualling programme.
Ms Robison, who is also the deputy first minister, revealed that the Highland economy “needs” the A9 so the Scottish Government so the next phase of the A9 will start work in 2024-25.
Funding will be provided not just for the construction of Tomatin-Moy but also for “land acquisition for further sections,” in a move welcomed by two Highland MSPs as positive news.
Ms Robison said: “Recognising the needs of the Highland economy we will progress the next phase of the A9 dualling programme in 2024-25, including commencing construction on the Tomatin to Moy section and advancing procurement and land acquisition for further sections.”
NHS Highland will get almost £39 million more in 2024-25 than in the current year, the equivalent of a five per cent increase in its funding. In 2021-22 the health board got £725.6, last year it received £768.2 while this year it is set to get £807.1.
But will that be enough to stem the tide of waiting and services under pressure like never before? That remains to be seen but a health board the size of NHS Highland could easily swallow the £39 million it has been allocated.
NHS Highland’s initial financial plan identified a budget gap of £98 million combined with a Cost Improvement Programme of £29.5 million proposed, leaving a residual gap of £68.7 million
In November the board presented a paper that found the budget gap – having worked with the board and nationally to reduce costs and received extra government cash to close this gap it is now looking at a shortfall of no more than £55.8 million.
Depending on where you stand the move First Minister Humza Yousaf announced to freeze Council Tax at the SNP conference will be seen as either welcome or another blow to local authorities.
However, Ms Robison has tabled enough cash to cancel out the equivalent of a five per cent hike – £144 million to “enable local authorities to freeze Council Tax rates at their current levels.”
Council Tax remains under control of local authorities and we should know in the coming months if Cosla or individual councils will accept that or whether they want to raise charges on taxpayers higher.
The budget stated: “The Scottish Government has committed to working in partnership with Local Government to deliver a national freeze on Council Tax in 2024-25.
“We have engaged closely with COSLA to discuss the parameters and principles for identifying funding to support this commitment and will continue discussions during the coming months to reach agreement.”
The finance secretary stated that local government would get a “record” £14 billion settlement but if this is enough to avoid swinging cuts to public services remains to be seen.
Highland Council leader Raymond Bremner said it would take time to evaluate exactly what the settlement means in terms of its estimated budget gap of around £62 million in 2024-25 – more than £100 million over the next three years.
He said: “Our officials will need to work their way through the detail of the Scottish Government’s settlement figures when we receive this in a few days to better understand exactly what this means for the Highland Council.
“We will issue a revised budget projection for 2024/25, and implications for council tax, when we are in a position to do so.
“We look forward to seeing the detail on proposals for investment in affordable housing as this is a very important issue for communities in Highland. We also look forward to hearing the detail of the next stages of A9 dualling programme to be announced tomorrow.”
HIAL
Highlands and Islands Airports Ltd (Hial) – which is entirely owned by the Scottish Government – will see a slight rise in their funding as it rises from £69 million to £71.2 million.
Inverness airport recently received a number of significant blows with the loss of several routes including Loganair deciding to cut two routes one from Inverness to Dublin and another to Birmingham.
Highlands and Islands Enterprise
Highlands and Islands Enterprise will see the continuation of significant cuts for the third year in a row as it goes from funding of £68.7 million in 2021-22 to £62.8 million last year to £54.8 million for the coming financial year.
Farmers and crofters
There was positive news for farmers and crofters in that the Scottish GOvernment had pledged to “provide the same level of support through direct payments to farmers and crofters that was available pre‑Brexit.”
Not only that but “additional funding to support farmers, crofters and land managers to transition to a new future support framework, the most generous package of support in the UK.”
The budget stated that is in part to recognise “the vital role agriculture plays in the rural economy, while also creating the opportunity to become more productive and sustainable.”
Scottish Government highlights
In its official release, the Scottish Government highlighted the following figures from its 2024-25 Scottish Budget:
- £6.3 billion for social security benefits, which will all be increased in line with inflation.
- £13.2 billion for frontline NHS boards, with additional investment of more than half a billion – an uplift of over 5 per cent
- record funding of more than £14 billion for local government, including £144 million to facilitate a Council Tax freeze
- more than £1.5 billion for policing to support frontline services and key priorities such as body-worn cameras
- almost £400 million to support the fire service
- £200 million to help tackle the poverty-related attainment gap, almost £390 million to protect teacher numbers and fund the teacher pay deal, and up to £1.5 million to cancel school meal debt
- almost £2.5 billion for public transport to provide viable alternatives to car use, and increased investment of £220 million in active travel to promote walking, wheeling and cycling
