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Budget (Scotland) (No.4) Bill [Session 5]

Overview

The Budget Bill is the final stage in the annual budget process. The Bill allows the Parliament to set public spending in Scotland for the financial year 2020-21.

The overall figure budgeted for is £43.0 billion. 

This figure includes spending on: 

  • Health and Sport – £15.3 billion 
  • Communities and Local Government – £11.3 billion 
  • Education and Skills – £4.2 billion 
  • Social Security - £3.8 billion 
  • Transport Infrastructure and Connectivity – £3.5 billion 
  • Justice – £2.7 billion 

This is the fourth Budget Bill for Session 5 of the Scottish Parliament.

You can find out more in the Bill as introduced document that explains the Bill.

Why the Bill was created

The Scottish Parliament has a statutory duty to produce a Budget each year. 

Statutory duty is the law that a company, a government organisation, or the members of a particular profession must obey. 

You can find out more in the Bill as introduced document that explains the Bill.

Becomes an Act

Budget (Scotland) (No.3) Bill passed by a vote of 63 for, 55 against and 0 abstentions. The Bill became an Act on 18 March 2020.

Introduced

The Scottish Government sends the Bill and related documents to the Parliament.

Budget (Scotland)(No.4) Bill as introduced

Related information from the Scottish Government on the Bill

Opinions on whether the Parliament has the power to make the law (Statements on Legislative Competence)

Information on the powers the Bill gives the Scottish Government and others (Delegated Powers Memorandum)

Stage 1 - General principles

Committees examine the Bill. Then MSPs vote on whether it should continue to Stage 2.

Committees involved in this Bill

Who examined the Bill

Each Bill is examined by a 'lead committee'. This is the committee that has the subject of the Bill in its remit.

It looks at everything to do with the Bill.

Other committees may look at certain parts of the Bill if it covers subjects they deal with.

What is secondary legislation?

Secondary legislation is sometimes called 'subordinate' or 'delegated' legislation. It can be used to:

  • bring a section or sections of a law that’s already been passed, into force
  • give details of how a law will be applied
  • make changes to the law without a new Act having to be passed

An Act is a Bill that’s been approved by Parliament and given Royal Assent (formally approved).

Delegated Powers and Law Reform committee

This committee looks at the powers of this Bill to allow the Scottish Government or others to create 'secondary legislation' or regulations.

It met to discuss the Bill in public on:

Read the Stage 1 report by the Delegated Powers and Law Reform committee published on 18 February 2020.

Debate on the Bill

A debate for MSPs to discuss what the Bill aims to do and how it'll do it.

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Stage 1 debate on the Bill transcript

Murdo Fraser (Mid Scotland and Fife) (Con)

I am grateful to the finance secretary for giving way. Could she clarify exactly what will happen with concessionary travel for the under-19s? Yesterday, the Green Party was trumpeting the new policy initiative that is to be delivered, but the wording in the finance secretary’s agreement says that the funding will support “preparations” for a new scheme, with the aim, if possible, of delivering it next year. Is that a cast-iron guarantee, as the Greens claim, or is it simply a possibility, as the finance secretary says?

The Deputy Presiding Officer (Christine Grahame)

Because you are sitting down. Thank you very much, Mr Neil.

The Deputy Presiding Officer

I remind members that their speeches should be five minutes. I will allow time for interventions. Mr Neil took two interventions. This is a debate, and taking interventions makes it lively.

16:05  



The Deputy Presiding Officer

No. The member has to wind up.

The Deputy Presiding Officer

Please wind up.

The Deputy Presiding Officer

Yes. I have made sure of that. If you get a five-minute speech and take interventions, you get another minute if it takes that long. Be happy.

The Deputy Presiding Officer

The member is winding up his speech.

Murdo Fraser (Mid Scotland and Fife) (Con)

This has been a lively debate. If the award for the most statesmanlike speech goes to my good friend Bruce Crawford, the award for the most amusing, so far, goes to Alex Neil. Although he was, of course, totally wrong about everything that he said, he entertained us.

In these troubled times, it is good to have in life certainties on which we can rely. In Scotland, we can always rely on the weather in February being miserable, we can be confident that our football team will perform dreadfully against whichever low-ranked opponent it is playing this week, and we can guarantee that, despite all their posturing and bluster, the Scottish Greens will always end up voting for the SNP budget. So it has turned out once again this week, with the Greens lining up with their fellow nationalists.

This year, it looks as though they have sold themselves very cheap. Only a few weeks ago, the Greens were setting out their red lines for the budget. They were demanding that road-building projects be cancelled and that dualling of the A9 and A96 be stopped. They were even calling for a four-day working week to be introduced. None of those things has been delivered, thank goodness.

Instead, what is now being trumpeted by the Greens is the introduction of free bus travel for people aged under 19. Yesterday, press releases from the Green Party and social media comments from Green MSPs claimed their victory in delivering that policy to tackle climate change. However, it is a debacle; when we look at what has actually been agreed, it falls far short of a firm commitment. I will quote directly from the Cabinet Secretary for Finance’s written answer yesterday. It says that there is

“£15 million to support preparations to introduce new concessionary free bus travel for young people aged 18 and under, with the aim if possible to begin in January 2021”.—[Written Answers, 26 February 2020; S5W-27621.]

There will just be “preparations”—there is just a possibility, as the finance secretary confirmed earlier—and there is just £15 million against an annual estimated cost of £80 million. Mr Harvie can now explain how that is a firm commitment.

Murdo Fraser

We are, after that intervention, none the wiser as to whether the policy will be delivered.

It is not just on that policy that the Greens have been sold short. Yesterday, they were claiming that the proposed flyover at the Sheriffhall roundabout should be revisited. It is a vital infrastructure project for connecting Edinburgh to Midlothian and the Borders. However, because the project is being delivered as part of the Edinburgh and south-east Scotland city region deal, a change to the policy would require the agreement of the UK Government and local authority partners: it would be up to them. The finance secretary confirmed that yesterday in a television interview, so the Greens have been sold short again.

I have to congratulate Kate Forbes on what she has achieved so far as finance secretary. She has been in the job for only nine days, but already she has stitched up Patrick Harvie far more successfully than her predecessor achieved in more than three years in the role.

Overall, the budget is a disappointment, but it could have been so much better. It was based on a 3.7 per cent uplift in real terms in the total available resource spending, thanks to the Boris bonus that is due to increased Westminster spending. Against that, as Bruce Crawford reminded us, we have to offset the negative reconciliation of more than £200 million from poorer income tax receipts than were forecast three years ago, and the downward effect of lower income tax forecasts relative to the rest of the UK on the amount of money that is available for the Scottish Government to spend. That all demonstrates, once again, that if we could grow the Scottish economy at even the same rate as the UK average, we would have many hundreds of millions of pounds more to spend on public services, without having to increase taxes any further.

Alex Neil made a speech about the fiscal framework, but he seems to have forgotten that the person who negotiated the fiscal framework was Mr Swinney, on behalf of the Scottish Government. If Mr Neil has a problem with what is in the fiscal framework, he needs to take that up with his colleague on the front bench.

Despite all the extra money that is available to the Scottish Government, and the fiscal transfer from the rest of the United Kingdom of £10.7 million, the budget still delivers cuts. There is an extra £95 million in revenue for local government, which is welcome, but there is nothing extra for capital. That means a real terms cut of £117 million in capital for local authorities across Scotland. It will mean that projects that are currently being planned—local roads and infrastructure projects, new school builds and refurbishments, leisure and recreation centre investments—will all have to be rethought because the SNP Government, backed by the Greens, is cutting the budgets of local authorities.

Right across Scotland today, local authorities are having to set budgets and make cuts. As Donald Cameron reminded us, they are having to make cuts in school-crossing patrollers, teacher numbers, classroom assistants, music tuition, the opening hours of libraries and leisure facilities and the opening hours of local recycling centres—from a budget that is supposedly focused on climate change. That is what is being delivered right across Scotland, thanks to the SNP and the Greens working together. At the same time, as Graham Simpson reminded us, many places are facing council tax rises of nearly 5 per cent this year.

In effect, the budgets of local councils across Scotland are being raided to fund the pet project of the SNP and Greens. If we see free bus travel for the under-19s being provided, the buses will be travelling on heavily potholed roads, because the Greens have stolen the money out of local government to fund that scheme.

The Scottish Conservatives engaged constructively on the draft budget; I thank the Cabinet Secretary for Finance for her constructive engagement. However, we cannot support the budget. Despite the extra resources that are available to the Scottish Government, the budget falls short of what Scotland requires. It will deliver more cuts, it does not tackle the drugs crisis, and for all the noise that they are making, the Greens have sold themselves short once again. It is a budget that Parliament should reject.

16:51  



Murdo Fraser

Can the finance secretary confirm that, if the Scottish Government were to match any changes in the UK income tax rates, under the fiscal framework negotiated by Mr Swinney, there would be no additional cost to the Scottish Government?

MSPs agreed that this Bill could continue

Stage 2 - Changes to detail 

MSPs can propose changes to the Bill. The changes are considered and then voted on by the committee.

First meeting on amendments

Documents with the amendments considered at this meeting held on 4 March 2020:

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First meeting on amendments transcript

The Convener (Bruce Crawford)

Good morning and welcome to the sixth meeting in 2020 of the Finance and Constitution Committee. The first item on our agenda is evidence on the Budget (Scotland) (No 4) Bill at stage 2. This is the opportunity for the committee to put questions on the bill and its amendments to the cabinet secretary and her officials before we move to the formal proceedings. We are joined for this item by Kate Forbes, Cabinet Secretary for Finance, and Scottish Government officials Andrew Watson, director of budget and public spending, and Graham Owenson, head of local government finance. I welcome the witnesses to the meeting.

The Cabinet Secretary for Finance (Kate Forbes)

I have some brief comments that will cover both sections of the meeting. Before turning to the stage 2 amendments, I put on record my thanks to the committee for its report on the budget—to which I responded yesterday—and for the constructive and flexible approach that the committee has taken to this year’s budget process. As committee members will be aware, the truncated timetable continues: the principles of the Budget (Scotland) (No 4) Bill were agreed last week, consideration of the Scottish rate resolution will take place in Parliament this afternoon and stage 3 will follow tomorrow.

The amendments have two broad purposes: five amendments give effect to the budget increases that were agreed with the Green Party, which I outlined at stage 1; and 15 amendments update schedule 1 to the bill to reflect the revised ministerial portfolios. As I confirmed to Parliament on 26 February, as a result of the agreement with the Greens, I will be providing an additional £95 million in resource to local government and an additional £60 million for the transport, infrastructure and connectivity portfolio, which consists of £15 million in resources to introduce free bus travel for young people aged 18 years and under—subject to the necessary preparations—and £45 million capital for net zero projects, £15 million of which will be transferred to local government. There is also an additional £13 million of resource and £5 million of capital to the justice portfolio for police services. Overall, those amendments increase the Scottish budget by £173 million, which is £123 million of resource and £50 million of capital. I outlined the source of that funding in my letter to the committee of 28 February. I am happy to take questions on all of that.

The Convener

In your initial budget proposals, you included the sum of £468 million of anticipated Barnett consequentials. On 12 February, you told the committee that those anticipated consequentials had been fully allocated in the budget and that there was no more resource because every penny had been deployed. You then told the committee that, since the budget was published on 6 February,

“It has become clear ... that additional consequentials of up to £43m are due to the Scottish Budget in respect of the Fossil Fuel Levy”

and that

“A revised assessment in respect of wider UK Government consequentials has been made”

as a result. When and how did it become clear that additional consequentials would be due and when did you decide to carry out the revised assessment of the wider United Kingdom Government consequentials?

Kate Forbes

Thank you for the question, convener. As members will be aware, in order to provide certainty to ratepayers and public services, I needed to secure safe passage of the budget, which required me to find agreement with at least one other party in the Parliament. Although the parties were very forthcoming with what they wanted to see, they were slightly more hesitant in saying—with some exceptions—where they wanted that money to come from. Therefore, I had to review the assumptions that underpinned the budget. I set out how the agreement with the Green Party was to be funded in my letter to the committee of 28 February.

In particular, there was some late information that emerged when the UK Government notified English councils about provisional non-domestic rates. That was too late to inform the original budget proposition, but we have since analysed the implications and taken those into account. Specifically on the fossil fuel levy, the Office of Gas and Electricity Markets contacted us on 18 February with new information that has informed our current position.

As members know, the budget has taken place in exceptional circumstances. There has been a higher level of risk in light of the fact that we have baked in anticipated consequentials and are therefore exposed to whether the United Kingdom Government delivers on its manifesto commitment.

Clearly, I needed to revisit the judgments and assumptions so that I could deliver a budget.

The Convener

You used the word “risk”. I am interested in understanding the extent of that risk and how you will deal with a shortfall in funding, if funding does not materialise as anticipated.

Kate Forbes

When it comes to risk, there is always a judgment call to be made. The context is important in that regard. I deemed the risk of not delivering a budget at all and thereby creating huge uncertainty for ratepayers and public services to be higher than the risk of making the judgments that I made about funding sources.

There is always a degree of risk when we make assumptions and rely on forecasts—and, under the fiscal framework, that applies to a larger proportion of our total budget, given the assumptions that are built into the block grant adjustment and forecasts of tax receipts and social security expenditure.

The assumptions that I have made as part of the funding package need to be seen very much in the context of the wider risk that is associated with this particular budget, in light of the fact that we are acting before the UK Government does. As I said, if the UK budget delivers less than we have assumed that it will deliver, we might need to review our position. It is worth bearing in mind that there might be a number of fiscal events this year that have an impact on the Scottish budget.

The assumptions that we have made are prudent and within a level that can be addressed through routine budget management processes. However, I do not want to hide the fact that there is risk, because this year we are more exposed to what the UK Government does or does not do than has been the case in previous years.

Finally, it is worth noting that, in light of all that, we have considered and included different sets of assumptions in order to spread the risk. The approach that I have taken draws on a mix of funding sources: underspend, the non-domestic rates pool, the fossil fuel levy and assumptions about the UK budget. That means that, if there is variation in one area, the hope is that the mix of funding sources will mitigate and certainly spread the risk, reducing our exposure.

The Convener

There is significant concern about the coronavirus outbreak and its impact on Scotland. The primary concern is health and the impact on people, of course, but there is also the potential for the virus to have a significant financial impact.

There are reports that the Chancellor of the Exchequer is reassessing his budget in light of the coronavirus outbreak. What discussions have you had with the UK Government on the matter and on potential funding to support the response that the Scottish Government will necessarily have to make? I am thinking, not least, about the health budget, but the issue will affect all parts of life and will no doubt have an impact on the economy.

Kate Forbes

Notwithstanding the obvious, serious human impact, we are very mindful of the need to make appropriate preparations in our budget, including in the context of what the national health service is doing.

I had a call with the Chief Secretary to the Treasury, Stephen Barclay, last week—on Wednesday, if I remember correctly—and I raised the issue with him then. It is important that we are able to share information and have on-going dialogue about funding. It is not yet clear—and Stephen Barclay could not provide me with any clarity on this—how the UK Government will respond to the matter in its budget next week, never mind how it is responding now in terms of potential funding and consequentials.

I have a quadrilateral next week, on Tuesday, when, along with my Welsh and Northern Irish counterparts, I will again speak to the Chief Secretary to the Treasury. The issue is on the agenda, and I will be happy to keep the committee informed about associated funding developments as they evolve.

The Convener

It is important that you let us know as soon as you can about where that might be going, and particularly about the health budget challenges, at least immediately. Any light that you can throw on that after your quadrilateral next week would be very helpful. I know that we are going to discuss health today.

Angela Constance (Almond Valley) (SNP)

Good morning, cabinet secretary. I am aware that, during the stage 1 debate, you spoke about the Cabinet Secretary for Health and Sport having identified £10 million of resources in her portfolio to increase the investment in tackling the harm that is caused by drug misuse. Can you provide more detail on the source of that funding and—this is important—how it will be spent?

Kate Forbes

As Angela Constance said, I announced at stage 1 that the Scottish Government was making available additional funding to help to reduce the harms and deaths that are caused by drug and alcohol misuse. That additional funding is up to £20 million, and that is an increase of £7.3 million from within the health portfolio. Therefore, that is money that Jeane Freeman has identified in her portfolio on top of the initial proposals in the draft budget. Although it is, of course, for Jeane Freeman to talk about health spending, that money will help to deliver the recommendations of the drug deaths task force and provide investment for mental health support. It will also allow wider consideration of additional NHS-funded rehabilitation beds. That means that, for the 2020-21 budget, Scottish Government and NHS funding for reducing the harms from drug and alcohol use will rise to £95 million in total.

Angela Constance

Obviously, tackling inequality in all its forms is an important part of the budget. Can you speak about the overall contribution that your budget will make to supporting low-income households and helping the Parliament to meet its child poverty targets, bearing in mind that, to meet our targets, we have to move beyond mitigation and not just prevent people from going backwards but lift them out of poverty?

Kate Forbes

The coming budget year is critical because, although we have been investing in mitigating the worst impacts of UK Government welfare cuts, the first Scottish child payments will be made next year in order to put money directly into the hands and pockets of eligible children and families. Our spending plans therefore most certainly support low-income households.

Previous estimates have suggested that we expect to spend at least £1.4 billion in total to mitigate the worst effects of cuts and tackle child poverty head on. That includes £21 million for the Scottish child payment. There is also still the £110 million to mitigate UK Government welfare cuts, including almost £60 million to mitigate the bedroom tax, and over £180 million to close the poverty-related attainment gap in schools.

The budget certainly tries to deliver on tackling child poverty head on, which is one of our four key strategic aims.

Angela Constance

The Convention of Scottish Local Authorities and others have argued for increased resources for councils, which has resulted in £95 million going to local government over and above what is in the draft budget. I know that £50 million of that comes from a reprofiling of the non-domestic rates income distribution.

I understand that the calls for that additional resource principally related to the climate emergency and child poverty, and I know that the money is not ring fenced. I support decisions being made locally and local accountability, but do you have any sense of where that additional resource for child poverty will be directed to and whether it will be for mitigating decisions that have been taken elsewhere or for measures to lift children out of poverty? We should bear in mind that we are accountable for our targets and that we need to understand when investment is mitigating to prevent people from going backwards and when it is taking people forward.

10:15  



Kate Forbes

It is important to stress that that £95 million is not ring fenced, so it will be for local authorities to determine how that money is spent.

On the question of COSLA working in partnership with us to deliver common aims, we are both signatories of the national performance network, one of the outcomes or indicators of which is tackling poverty and inequality. My hope, certainly, is that that funding, which is resource funding, will be used to support the families and children who rely on public services the length and breadth of the country. We are stepping up considerably our efforts to tackle poverty, which is why we have the Scottish child payment in place. We have to work closely not only with COSLA but with every public body to do that, because I do not think that any organisation can tackle that in isolation. There needs to be a streamlined, joined-up approach to dealing with poverty.

The Convener

I know that a number of members want to ask about support for under-19s using bus services, so we will deal with all of that in a oner.

Alexander Burnett (Aberdeenshire West) (Con)

I would like to know what climate change assessment was done on the policy. Obviously, giving free travel to people who do not drive might have less of an impact than, for example, maintaining the bus services that are being removed in various areas across Scotland, and particularly in the north-east.

Kate Forbes

I think that the policy change is profoundly valuable not only in terms of meeting our climate change targets but in terms of supporting young people, particularly in rural areas. I started working in a rural area when I was a teenager and spent the first hour’s wage just on getting to my workplace, so I think that the policy will make a huge difference to young people across the country.

It is important to say that we have made the commitment as part of our agreement with the Greens and that we now need to get moving on the preparations and due diligence that are required. Transport Scotland is urgently developing project plans to deliver on the commitment. Three initial workstreams have been identified to explore how best to deliver. It is important that we do that work in partnership with young people in rural and urban areas to ensure that it delivers the improvements that they want to see in public transport.

Alexander Burnett

My point is that, if there are no bus services in rural areas, because they have been cut, it does not matter whether they are free or not.

Kate Forbes

Often, bus services are cut because they are not viable. As someone who represents a rural area, I am aware of the fact that, sometimes, they are not viable because they are not used well enough, and that that is because they are too expensive. My view is that, in the same way as we have seen a take-up in bus service use by over-60s as a result of Government policy, we will see that happen among young people. Where a young person has had to choose to drive—if they have had access to a car—or just to stay at home instead of going to a sports tournament or a youth club or taking an extracurricular activity at school that would require them to stay late, they can now choose to take the bus. The more people who take the bus, the more viable the service and, the more viable the service, the more likely it is that it will be retained.

Alexander Burnett

You mentioned the work that needs to be done in preparation for the introduction of the policy. What consultation has been done with the bus companies before the announcement not only with regard to the overall free travel policy but with regard to the £15 million for preparatory work?

Kate Forbes

The costings were arrived at in consultation with Transport Scotland and the work is to allow us to understand the implications in advance of any announcement. You should bear in mind that the policy has come out of budget negotiations and a budget deal. As every party appreciates, those conversations are private and confidential. Obviously, we need to identify as much of the detail of the issue as possible, but I was clear in my letter that there is still some work to be done around making the appropriate preparations and conducting due diligence to ensure that what we do in this space works.

John Mason (Glasgow Shettleston) (SNP)

I am very grateful for my card, which gives me, as an over-60, many opportunities to travel on the bus. Will the arrangement be the same for young people, or are you suggesting that they might get something different? I get free bus travel and pay a reduced fare on the trains in Strathclyde, and I get to go on the subway for less.

Kate Forbes

At the moment, the Young Scot card-based, non-statutory young people’s bus discount scheme is in place. I can go into detail of the three workstreams that we are proposing in order to ensure that preparations are done. There is some flexibility in how the scheme is rolled out but, ultimately, we want to ensure that it is easy and straightforward for a young person to get on and use the bus. The scheme may involve building on the discount schemes that are already in place, so that we are not starting completely from scratch.

John Mason

I will talk about the £15 million that has been mentioned. I accept that, inevitably, there is a bit of uncertainty about the timing of the introduction of the scheme, because it depends on when you complete all the work. If the scheme gets going next January, such that it will run for three months of the coming financial year, will that cost be included along with the cost of setting up the scheme?

Kate Forbes

If, as we hope, the scheme were to start in January 2021, the funding that we have put aside in the budget this year would cover the preparation work and also the commencement of the scheme during the next financial year.

John Mason

So it would be a bit more than a full year.

Kate Forbes

Yes.

John Mason

Thank you.

Alex Rowley (Mid Scotland and Fife) (Lab)

Who knows what the cost will be, so where did the figure of £15 million come from? Will you publish more information on the workstreams and how the scheme will be taken forward? There are a lot of legitimate questions—my colleague mentioned that someone can have a free bus pass, but it might be the case that no buses come to their area. As you know, that is a serious problem in rural Scotland. As their budgets have been cut, councils have been less able to subsidise bus routes, and bus companies have been pulling more and more bus services, particularly in rural areas. Local authorities have the power to set up public bus companies, but they do not have the resources to do so. Therefore, is there a need to take a more holistic look at bus travel and public transport in general?

A number of councillors have contacted me—I do not know whether they have contacted you—to ask whether there will be changes, because bus travel to and from schools is a big cost for councils and the education sector. Just down the road from me, there are a number of schools and the service buses run right past their doors. What are the implications in terms of the amount of money that it costs local authorities to provide transport for under-18s to get to and from school?

Will you publish information and ensure that local authorities and all the other key stakeholders are involved as the proposal is developed?

Kate Forbes

The short answer is yes. It is worth bearing in mind the comment that was made by Alex Rowley’s colleague in the chamber last week during the stage 1 debate, which showed that Labour assumed that rolling out free bus travel to all under-25s would cost about £26 million. We must make sure that we take people with us and that we consult appropriately. I do not think that we would want to do that in isolation of all the other factors that Alex Rowley has rightly identified.

The first of the three initial workstreams, which will look at policy and legislation, will have to include consultation and engagement with stakeholders; the second will be about carrying out research, gathering evidence and reviewing the options that are currently available around travel concessions and how we extend them; and the third will be around operational implementation, which will include consideration of whether we could potentially adapt the existing Young Scot card-based, non-statutory young people’s bus discount scheme.

None of those three streams can be done in isolation from local authorities and the bus companies. There will be extensive consultation and engagement. Ultimately, most of us want to get to the same end point, which is to make it as easy and straightforward as possible for young people to use the bus.

Alex Rowley

What about school transport?

Kate Forbes

What is the question there? Are you asking whether the measure covers school transport?

Alex Rowley

Local authorities have been asking—councillors in Fife raised the question with me again at the weekend—whether, once it becomes free for under-19s to use buses, that will include school transport or whether the local authorities will continue to be expected to pay for school transport separately.

Kate Forbes

We have to explore that with local authorities. The scheme will make a big difference in cases where young people are unable to get school bus transport. The most obvious case, which parents have raised with me over the past week, is when a child does extracurricular activities after school and so cannot get the school bus home. At present, it costs £2 or £3 for them to get the bus, which mounts up.

All those questions will have to be explored with COSLA, and we intend to do so. Certainly, the commitment should be in addition to what is already provided. It is important that we have answers to the questions, which is why we have given ourselves a significant lead-in time before the introduction of the scheme next January.

The Convener

I guess that Patrick Harvie will want to ask some questions on that issue as well.

Patrick Harvie (Glasgow) (Green)

I have just one or two. Obviously, there are questions that will be for transport ministers to answer some way down the line, particularly in relation to the argument for a more holistic approach that Alex Rowley rightly set out. The other day, I was getting off a bus when the driver called me back and said, “When are you going to take us over? We all want to work for the corporation again.” There is a lot of appetite for public bus companies, and that case will continue to be made.

George Adam (Paisley) (SNP)

Was the driver a 90-year-old? [Laughter.]

Patrick Harvie

I did not ask—I am far too polite.

There are two questions that I would like to explore with the cabinet secretary. The first of those questions, which is on measuring the impact, relates to one of Alexander Burnett’s questions. Obviously, one area in which the measure can achieve a social and environmental impact is the reduction in the costs of family travel and not just the costs of young people travelling on their own. For example, young people will be able to take the bus rather than their parents giving them a lift, and the scheme will reduce the financial cost of families travelling together. Will there be an attempt to measure the social justice impact as well as the environmental one as the scheme starts to be implemented?

My second question is on how the scheme will work. You mentioned that the Young Scot card is one of the options. Do you agree that it would make sense to develop and implement the system in a way that would be scalable if a future Scottish Government decided to expand the age range or the modes of public transport that were covered? I presume that we would want a scheme that is flexible enough to do that rather than having to design a completely new replacement system if such changes were approved later.

Kate Forbes

The short answer to the second question is yes. As I mentioned, in light of the fact that we have a scheme in place for over-60s, it makes sense not to reinvent the wheel and to look at what works already and whether we can roll it out for the under-19s. We definitely want a scheme that we can work with, particularly in terms of future direction. That is not me giving an indication of what the future direction is, but it makes sense to build a scheme that gets it right the first time so that we do not have to reinvent the wheel every time that we make a policy change in the area.

The first question, which was absolutely brilliant, was about how we measure the policy impact of the changes on more than one portfolio area. We have discussed in the past how we measure the impact of a policy that delivers benefits in multiple areas. I have previously used the example of emissions reductions in travel zones, which impact on health as well as transport. With free bus travel, there are social justice impacts, health impacts—in terms of prevention—and a transport impact. At the moment, we capture that through the national performance framework, outcome by outcome, and we measure the impact of our policies against those outcomes. The policy can deliver multiple outcomes, not just a single outcome.

10:30  



Neil Bibby (West Scotland) (Lab)

This week, the Sunday Mail reported that Scottish Enterprise staff have been emailed by Steve Dunlop, the chief executive, ordering them to freeze all future support grants and to slash internal budgets. Were you aware that Scottish Enterprise was running out of money when the Scottish Government decided to cut its budget for next year by 9 per cent? Has the Scottish Government considered the economic impact of a reduction in Scottish Enterprise’s budget?

Kate Forbes

It is important to say that the comment about Scottish Enterprise running out of money is not accurate.

I have said in the past that we want to ensure that the investment that goes through our enterprise agencies goes into the economy. It is perfectly acceptable for organisations to look at being as efficient as possible to maximise the resources that are ultimately invested in the economy. That is what matters.

In the budget this year, which of course is one of the first years in which we are funding south of Scotland enterprise—with overall investment in the next financial year of around £28 million—it is important to look at the investments that we are making in the economy in the round, through not only Scottish Enterprise but the other investment vehicles.

Neil Bibby

If businesses are not getting the support that they need, it does not appear that the transition to south of Scotland enterprise and the Scottish national investment bank is working. Is it acceptable and prudent for Scotland’s leading enterprise agency to freeze its support of businesses in Scotland right now?

Kate Forbes

I am not aware of any freeze in direct support for businesses. Every organisation needs to look at the way in which it operates—I expect every organisation to do that—to ensure that it delivers value for money for the taxpayer and our public services. Whether it is through Scottish Enterprise, Highlands and Islands Enterprise, south of Scotland enterprise or the Scottish national investment bank, the priority is to ensure that the money that we invest goes to businesses, organisations or, in some cases, community groups, as they are the most important factor. We must support the enterprise agencies to do that as well as possible.

Members cannot look at this year’s budget in terms of the investment through the Scottish national investment bank or the enterprise agencies and come to any other conclusion than that we are investing in the economy.

Murdo Fraser (Mid Scotland and Fife) (Con)

When you came to this committee three weeks ago to talk about the budget, you assured us that every penny had been accounted for, yet you have now found an extra £173 million. I am glad that you located the missing sofa and that that cash has materialised.

I note that, of the £173 million, £50 million comes on the basis of a reprofiling of non-domestic rates distribution over the next three years. Is it fair to characterise that as you essentially borrowing this year against future income in the years to come?

Kate Forbes

The only issue that I take with that sentence is the word “borrowing”. As Murdo Fraser knows, because I included the relevant table in the letter that I sent to the committee, the non-domestic rates pool does not impact ratepayers or local government funding—that is absolutely clear. It brings forward forecast growth to invest, but that does not in any way disrupt our plans to bring the non-domestic rates pool into balance. That is shown in the table that I provided.

Murdo Fraser

Thank you for providing that helpful clarity.

You will have seen that, in the committee’s budget report, we highlighted income tax reconciliations, which will be £204 million for the 2020-21 budget. The projected sum for the following year is £550 million, which is a much larger sum. How prudent is it to start spending future years’ income in the coming budget when we know that we will potentially have a much bigger issue to address in a year’s time?

Kate Forbes

As I said earlier to the convener, it is a judgment call. In this year’s budget, I have not touched the reserve, which remains the same, and I have left £93 million of resource borrowing headroom, as originally planned. That is because we are aware of the volatility and the uncertainties that are coming down the line, which are part of a much bigger question to do with the fiscal framework.

In my initial conversation with the Chief Secretary to the Treasury last week, he raised the point that we needed to discuss and ensure that the fiscal framework is working for both Governments. The current level of volatility in income tax receipts is concerning. Next year, our borrowing powers will not cover the £550 million or so for reconciliation. The UK Government is able to borrow for figures like that and to cover and smooth over them, but we do not have that capacity. Although I am making prudent decisions now to ensure that we have as much headroom as possible next year, it will still not be sufficient headroom, through the levers that we have, to deal with that level of reconciliation.

Murdo Fraser

Thank you. I would just observe that, although there is limited capacity to borrow, that borrowed money has to be repaid at some point and you are therefore simply storing up additional issues for future years.

I want to return to the non-domestic rates income instruments, which I note for the coming year are £2.749 billion, rising to £3.423 billion in the year 2023-24. That means that, over the next three years, you are expecting non-domestic rates income to increase by £674 million. According to my calculation, that is a 25 per cent increase in non-domestic rates income over the next three years. That seems an astonishing uplift—it is well above the rate of inflation—in business taxation over a three-year period. How do you arrive at those figures?

Kate Forbes

Those figures are based on the most accurate forecasts that we have, led by the evidence. However, Graham Owenson might have more to add to that.

Graham Owenson (Scottish Government)

Those are Scottish Fiscal Commission estimates, which are based on consumer prices index inflation. We also need to take into account where we are in the appeals cycle when appeals have been settled. In the earlier years, when we get a lot of appeals, income will be low; in the later years, when appeals have been settled, the income will be higher. It is to do with where we are in the appeals cycle.

Murdo Fraser

I think that I understand that as a technical response. However, given that the Scottish economy is not projected to grow particularly quickly over the next three years, it seems to me that you are expecting to take from Scottish business a 25 per cent increase in taxation, which is bound to have an impact on the competitiveness of Scottish business.

Graham Owenson

The rates that individual businesses will pay will be no higher than the CPI inflation increase each year.

Murdo Fraser

Where does the nearly £700 million growth come from?

Graham Owenson

It involves a range of technical factors, but the main one is where we are in the appeals cycle. In the earlier and middle years, when we are settling appeals, income will be lower; income will be higher in later years, once those appeals have been settled.

Murdo Fraser

Yes, but overall there will be an additional tax burden on Scottish business of nearly £700 million over the next three years.

Kate Forbes

Those were technical answers as to how we arrive at the forecast. Quite separately, in terms of what business will see, next year Scottish business properties will pay a lower headline poundage than those in the rest of the UK and 95 per cent of properties will pay less than they would elsewhere in the UK. We continue to have the most generous rates relief anywhere in the UK. Businesses will therefore see the positive impact of the recent Non-domestic Rates (Scotland) Bill in terms of the changes that have been made to the appeals system; they will also pay a lower headline poundage than anywhere else in the UK. Therefore, I think that we can continue to say that Scotland provides business with the most competitive rates regime of anywhere in the UK.

Murdo Fraser

I have just one more question, convener. There has been some suggestion in the media that the chancellor will announce next week as part of the budget a fundamental review of non-domestic rates for England and Wales. Would the Scottish Government consider doing that?

Kate Forbes

Again, such questions are challenging because they are all what-ifs and we have to pin down our budget now. We are going early with our budget in order to give certainty to ratepayers. We have to think very carefully about making changes, and we do not intend to make such changes to rates and taxation in year. It is important to make that point.

We need to do what is right for businesses in Scotland. Our reliefs scheme, which is the most generous in the UK, our decision to make headline poundage slightly lower than it is in the rest of the UK, and our unique reliefs, such as the business growth accelerator, all show that we adapt our policies to the Scottish business environment. We should not necessarily replicate what is happening south of the border, because, if we did that, we would have to get rid of a lot of our very generous reliefs.

The Convener

A couple of members want to ask supplementaries on reconciliation and reserves and on business rates. Murdo Fraser asked about reconciliation and reserves. Am I correct in saying that John Mason is interested in that area?

John Mason

I do not have a question on non-domestic rates.

The Convener

The issue of reconciliation has been raised, too.

John Mason

I am interested in reserves generally.

The Convener

You can raise that matter now. It all relates to Murdo Fraser’s questions.

John Mason

My questions follow on from the convener’s excellent speech last week—I do not know who wrote it, but it was very good—about taking a longer-term view on the Scottish budget, whether we should set aside reserves and the tension associated with that. In the cabinet secretary’s reply, which we received yesterday, she said that it is a matter of judgment and about finding the balance. I totally agree with that.

I met people from Glasgow City Council on Saturday. I think that councils have a 2 per cent target for reserves. What are your thoughts on that? It is sensible and wise to put money into reserves, but it means that less money is available to spend today. How do we get the balance?

Kate Forbes

I think that we have the right balance in the budget. It is a very important judgment call to make. On one hand, we have to make prudent decisions in order to deal with future volatility, but, on the other hand, any money that is in the reserve is not being invested in our public services at a time when every party in the Parliament is calling for greater investment in different budget lines. This year, we have taken the right decision by leaving £100 million in the reserve. I consciously decided to do that, as part of reaching agreement with another party. Subject to what the UK Government does on its budget day, my view is that we should add to the reserve in order to increase the Government’s ability to manage the inherent volatility under the fiscal framework.

John Mason

Have you any thoughts on a figure? Ideally, would you like a target of 2 per cent, which is what councils have?

Kate Forbes

It is very difficult to give a percentage rate, because a lot of things change annually. We will give greater thought to Parliament’s comments about what should be held in the reserve as part of the medium-term financial strategy, which will be published later this year. That will provide the longer-term strategic view on how we should manage volatility and reserves.

The Convener

I say to John Mason that I like my compliments without barbs, so he should watch what he is doing when he asks questions in future. [Laughter.]

Donald Cameron (Highlands and Islands) (Con)

Am I right in thinking that the Government considered non-domestic rates income as an option in last year’s budget and that it described its decision as exceptional at that stage? Can we deduce from the fact that the Government is now taking the step for the second year in a row that it is no longer exceptional?

Kate Forbes

This is very much an exceptional budget in exceptional circumstances, and exceptional decisions have to be taken in order to manage not only the volatility of the fiscal framework but the uncertainty that is inherent in going ahead with our budget before the UK Government’s budget. That is why we say that we are baking in anticipated consequentials in the budget bill.

What is most important in that regard is our commitment to bring back the non-domestic rates pool; we will be doing that and meeting our target in the coming years, as I identified in my letter to the committee. Graham Owenson might have something to add on the technical questions.

10:45  



Parliament would have cause to ask more questions if it meant that the non-domestic rates pool was out of balance for longer. However, our decisions are prudent and we will still see non-domestic rates brought back into balance in the same timescale. It basically spreads the income over several years, rather than just the year in which it was taken. Incidentally, we did not go into negative territory on the non-domestic rates pool last year—we did not have to use that facility last year.

Graham Owenson

That was the clarification that I was going to add. We forecast that the pool would be in deficit of minus £100 million in 2019-20. However, the latest forecast is that it will actually show a small surplus, so we did not use that facility.

Donald Cameron

The first point that I was making is that you specifically described reprofiling as exceptional last year. I am not talking about the budget in general, but the policy of reprofiling, which was described as an exceptional decision.

The second point is that you were plainly aware that it was a source of funds, not only because you mentioned it last year, but because you made provision for £100 million-worth in the draft budget. Is that a fair comment?

Kate Forbes

Parliament has to determine whether it would rather that I used the non-domestic rates pool or made £50 million-worth of cuts to another portfolio line. I do not think that there is an appetite for cuts. As far as Parliament and I am aware, the non-domestic rates pool exists. Our commitment is to ensure that it is in balance by 2022. That remains our position.

The Convener

That was a supplementary question, Donald, so I will come back to you to ask your other questions.

Alexander Burnett

I alert members to my entry in the register of interests, and state that I pay business rates.

Could one of you explain a bit more about the cycle? You have said that there is a rise of £700 million in 2023-24, because of the timing of the cycle. My understanding is that businesses have to pay their rates every year, regardless of whether they appeal. Is that £700 million the difference between successful and rejected appeals or is it something else?

Kate Forbes

I do not mean to be patronising, but it might be helpful if I gave the member a technical explanation of how the pool works. I will clarify the point again: our decisions around the non-domestic rates pool do not have an impact on non-domestic rates payers and they do not have an impact on local government funding. The issue is how the non-domestic rates system works and how we smooth the access of local authorities to the funding.

As you can imagine, the big challenge—this came to light when we were having our discussions on whether to devolve non-domestic rates to local authorities—is whether we should devolve the associated risks. At the moment, the central Scottish Government takes the risk of non-domestic rates. Local authorities have a forecast of non-domestic rates to determine what they can spend next year. If that forecast was not the same as the amount that the local authorities take in—it often is not—the risk would lie with local authorities. We do not take that approach; we use the pooling system to ensure that local authorities have guaranteed funding from year to year. That means that in some years, a surplus will build up and in other years the audited returns are less than the forecast, so it will go into negative balance. Our commitment is to try to smooth the income over a particular period of time. Last year, for example, a surplus built up, so we did not go into negative balance. This year, in order to ensure that we have funding to deliver on our negotiations, we have made the decision to reprofile the non-domestic rates pool.

Alexander Burnett

In the answer that Graham Owenson gave, he talked about the appeals cycle and the difference in appeals. That is what I do not quite understand.

Graham Owenson

When appeals are settled, successful appeals will be backdated to the start of the revaluation cycle. However, they may be settled two, three or even four years down the line. In that case, the four years of successful appeals income will be lost in one year.

Alexander Burnett

My original question was whether that £700 million, less CPI inflation for rates, is actually the quantum of successful appeals.

Graham Owenson

Appeals are a significant factor. Another significant reason for the spike in apparent income is that empty property relief will be devolved to local government from 2022-23.

The Convener

We will move on to another area. I call George Adam.

George Adam

The Scottish Police Authority’s budget will increase by £60 million this year. We all know that the Scottish Government is committed to protecting the police budget in real terms. Does that funding exceed its commitment, and, if it does, by how much?

Kate Forbes

George Adam is right to say that the Scottish Government committed to protecting the SPA revenue budget in real terms over the lifetime of the Parliament.

We estimated that that would result in a £100 million boost to the SPA’s revenue budget over that timeframe. Following next year’s budget, we have exceeded our £100 million commitment. In addition to our real-terms protection in 2020-21, we are providing a further £25 million in revenue funding to maintain officer numbers. The total policing budget will increase by £60.2 million in 2020-21; that is a 5.1 per cent increase on the 2019-20 budget position.

Alex Rowley

Is there enough money in the Scottish Fire and Rescue Service budget to meet the pay offer that is on the table for fire service personnel?

Kate Forbes

We have ensured that we will protect the SFRS’s budget next year, and that sufficient funding will go to front-line staff.

If the member is referring to the on-going campaign and how far that funding will go to meet the pay offer, I will ask my colleague Ash Denham to write to him with the specific details.

Alex Rowley

The point is that the pay offer—as you know, there is a much wider offer on the table—was rejected by staff. However, the chief fire officer suggested that there is now a danger that there is not enough money in the budget to cover the pay offer.

Kate Forbes

It is worth mentioning that the Scottish Government is not a party in the negotiations concerning firefighter pay; that is a matter for the SFRS as the employer. However, we have committed funding, and we continue our commitment to support the modernisation of the SFRS. There is a further uplift of £6.1 million on top of the increased spending power of £5.5 million in 2019-20, and £15.5 million in 2018-19. In total, we have provided £63 million of additional spending capacity for service transformation over the past three years, so that the SFRS can do more to keep our communities safe. However, I stress that the Scottish Government is not a party in the negotiations about firefighter pay.

Alex Rowley

Moving on, I will speak about a point that Patrick Harvie made, which you welcomed, on the policy impact of budgets. Last year, one of the headline budget announcements was the one-off, one-year £50 million capital spend for town centres. It was a significant investment that was widely welcomed. As the finance secretary, how can you ensure that the money was actually used? As we move on to the next budget and the next, how can the impact of that investment be measured?

Kate Forbes

The simple answer is that, although we provided that capital funding specifically for the regeneration of town centres, because that had been highlighted as an area that needed investment, we committed to giving the money to COSLA—to local authorities, which were enabled and empowered to spend it as they saw fit.

This is part of the big debate about ring fencing. We have significantly reduced ring fencing so that local authorities have autonomy over 91 per cent of their budgets and how they spend them. It is important to allow local authorities to determine how the money is spent. They will be able to make judgment calls in that regard and they are, of course, accountable to their local electorate for how the money is spent.

Although we are keen to ensure that our money is used well and invested wisely, the money is given to COSLA, and it is for local authorities to determine how they spend it.

Alex Rowley

We are talking about a big announcement last year about tackling town centres in Scotland. Fifty million pounds is a lot of money, and I would expect the Government at least to be confident that something has happened as a result. Was the money spent on a one-off? Did it go into street furniture? Did it make a difference to our economy? Where is the policy behind the approach?

Angela Constance talked about tackling poverty and inequality. Fife Council has a £10 million overspend on children and families and a £10 million overspend on health and social care, so the additional £6 million that will come in as a result of the budget deal with the Greens will be used to offset those overspends. Last Thursday, Audit Scotland published “The 2018/19 audit of Fife Integration Joint Board: Report on significant findings”, in which it said that the Fife IJB’s financial future is so unstable that something will have to give.

Where is the overall policy direction of the budget when it comes to health and social care and children and families? It is fine to keep putting money into new areas, but areas into which you have put money previously are overspending and cannot cope. It seems that, each year, there is a budget of initiatives with no strategic overview of where in our country we are trying to make changes.

Kate Forbes

I have two answers to that. First, local authorities are ultimately accountable to their local electorate for how they spend their money, and local councillors need to answer—just as members of the Scottish Parliament who have been elected to serve constituencies or regions must—for how they use the resources with which they have been entrusted. You ask about the Government determining whether local authorities have spent the £50 million on the right kind of regeneration, but that is ultimately a question for local authorities, which are accountable for it.

Secondly, on the direction of travel, as part of the budget process we meet COSLA regularly and COSLA identifies areas of pressure, which are the areas in which we try to support COSLA through increased investment. That is why an additional £100 million is going from the NHS—from the health portfolio—into social care, as you mentioned, to support local authorities and IJBs that are dealing with the pressures of meeting the needs that come with changing demographics and an ageing population.

COSLA also identified inflationary pressures on teachers’ pay, which is why we invested in teachers’ pay. We meet COSLA regularly as part of the budget process. COSLA identifies the pressures and we try to respond through the budget deal.

Alex Rowley

When John Swinney was the finance secretary, he set up the Christie commission on the future delivery of public services. At the time, the whole approach to the budget was going to be policy driven and we were going to look much more at preventative spend, to drive change. Has that approach been ditched?

Kate Forbes

Absolutely not. It is still very much—

Alex Rowley

So where is the joined-up thinking?

Kate Forbes

Preventative spend is absolutely core to our decisions on the budget, and I think that you can see that throughout this year’s budget. We were very clear about our four strategic aims in this year’s budget. On tackling poverty, tackling the climate emergency and investing in the economy, we have core aims, which we are backing up with investment.

The other way of looking at the issue is to consider outcomes. At the end of the day, COSLA, local authorities and the Scottish Government are co-signatories to the national performance framework, which contains a clear set of outcomes on which we want to deliver. The real test of our spending commitments will be how they deliver on those outcomes, which we share with local authorities.

I do not think that we are doing any of this work in isolation. We must look at the ways in which investing in one portfolio area is delivering results and benefit in another portfolio area.

11:00  



Alex Rowley

With the greatest respect, finance secretary, how are those objectives going? How are they being met? You seem to be just passing the buck to local authorities and saying that councillors should be accountable.

Kate Forbes

You asked me whether I feel that the regeneration fund of £50 million has been spent wisely. That is totally at odds with what Labour regularly criticises me on, which is ring fencing and disempowering local authorities in how they spend.

My point is that we invest in those funding pots but it is for local authorities to determine how that money is spent. You would probably be the first to criticise me if I was too rigid in saying how local authorities should spend it. Ultimately, we are accountable to the electorate for the spending decisions that we make. Local authorities are accountable, as am I, and as is each of us. The national performance framework, which all of us are signed up to, is the way that we measure progress against outcomes, and our strategic aims in the budget determine what we prioritise in this year’s spending.

Tom Arthur (Renfrewshire South) (SNP)

As a consequence of the deal that was negotiated ahead of the budget, East Renfrewshire Council will receive an additional £1.8 million and Renfrewshire Council an additional £3.1 million. Both of those areas lie within my constituency. That money is part of an overall uplift of £95 million. Will you share with the committee what the total allocation to local government now is, contextualise that within the overall Scottish budget and compare it with local government spending in England?

Kate Forbes

The total increase in resource funding for local government is £589.4 million, which is a real-terms increase of 3.9 per cent. That means that next year’s budget delivers the highest annual resource budget increase—in terms of budget to budget, at £509.4 million—for local government since this Administration came into power, in 2007. If capital funding is included, the overall funding increase is £238.3 million, which is a real-terms increase of 0.7 per cent.

I often think that the comparison is best captured by what the finance spokesperson for COSLA said, which is that, compared with England and Wales, where local authorities are “collapsing”, in Scotland we are doing things quite differently.

Tom Arthur

I appreciate that you are new to your role, cabinet secretary, but I am interested in your reflections on the budget process. We face significant strategic challenges in the coming decade, particularly with respect to demographics and increased health spending. What are your reflections so far on the parliamentary process and the way that we, collectively as a Parliament, go about the budget-setting process?

Kate Forbes

We need to be realistic about where the challenges are. I do not want to keep going back to the fiscal framework, but the review of it needs to be brought forward. Not having done that review means that we are unable to deal with volatility as well as we could.

That might sound technical and boring—like something that is of interest only to the finance committee and me—but it is about what money and funding we have to invest in our public services, and that is of interest to everybody in the country. The fiscal framework needs to be looked at to ensure that it is not hamstringing our ability to respond to the challenges that we face.

On the budget process, the budget delivers record investment in our health service, raising it to £15 billion. We are committed to passing on all the consequentials that come to us for health to the health service, in order to protect it.

Quite rightly, questions are often raised about how we ensure that we are taking a preventative approach. An obvious example is the way in which, this year, funding from the health service has moved into social care. Ensuring that we provide adequate social care might reduce cost pressures in areas of the health service.

The Convener

There are two other areas that people want to ask questions on. Donald Cameron has a question on consequentials.

Donald Cameron

During the stage 1 debate, last week, you repeatedly said that there was a lack of clarity around consequentials. Do you accept that, despite those statements and that professed uncertainty, your draft budget used consequentials that were, as the convener mentioned earlier, £468 million more than the Treasury’s forecast of more than £1.1 billion, as per the spending round last September?

Kate Forbes

We accept that £1.1 billion of additional resource budget was allocated at the UK spending round, to which we have added £142 million of anticipated additional consequentials from the forthcoming UK budget. That is part of the overall £468 million, because the remainder is capital.

I have repeatedly made the point that, in seeking guarantees about that funding, officials in the Treasury have consistently referred to the Conservative Party manifesto from December. Therefore, we have based our decisions on the best available evidence. To have waited until that funding was guaranteed, after our budget was complete, would have introduced even greater challenges to the process. The question, really, will be whether the UK Government delivers on the commitments that it made at the election in December.

Donald Cameron

Your funding for the majority of last week’s agreement comes from consequentials. I have come to that conclusion by subtracting £25 million underspend and £50 million of reprofiling from a total of £173 million, which comes to £98 million. Is it correct to say that that money comes from consequentials?

Kate Forbes

It is not quite correct, because of the fossil fuel levy. It might be worth having a technical answer on that. I would not characterise the fossil fuel levy money as part of the consequentials, because it should come to us anyway.

Donald Cameron

It is my understanding that the fossil fuel levy money is, in fact, a type of consequential.

Andrew Watson (Scottish Government)

It is slightly different from the annual consequentials that we receive as a result of UK fiscal events. The money is a surplus that directly accrues to the Scottish Government and the Scottish block rather than being a consequence of movement in UK spending that generates Barnett consequentials in comparable programmes.

Donald Cameron

I do not want to split hairs; it is just that, in the answer that you gave to a question from Murdo Fraser last week, the money was described as additional consequentials.

Do you agree that it is hypocritical to complain about uncertainty around consequentials, as you did last week, while, at the same time, using close to £100 million of additional consequentials to reach an agreement?

Kate Forbes

The point about whether the fossil fuel levy represents a consequential is quite important, because it is confirmed in a different way. As I understand it, your point is that it is hypocritical to use consequentials in advance of knowing what our guaranteed funding is. That is the irony of this entire process. We are going ahead of the UK Government because we are trying to provide certainty to ratepayers and the public services. If we had waited until after the UK Government’s budget, in order to get guaranteed certainty, the implications for taxpayers do not bear thinking about.

I accept that there is increased uncertainty around our decision to come forward. However, the UK Government was perfectly able to guarantee our funding, if it had wanted to, in the past few weeks. All that it has done is refer us to the Conservative Party manifesto; therefore, we have based our budget on the best available evidence. Is it as watertight as confirmation of block grant adjustments after the UK Government’s budget? No, but there are all sorts of uncertainties that are part of our annual budget process. For example, with regard to last year’s budget, only a matter of weeks ago, the UK Government clawed back capital consequentials late in the year because there had been an underspend associated with policy decisions south of the border. There will always be uncertainty.

Donald Cameron

My point is that it is hypocritical to complain about uncertainty around consequentials after you have used £100 million of additional consequentials to reach a deal.

Kate Forbes

My question to Donald Cameron is this: if the Conservatives fail to deliver on the promises that they made to the electorate in the December election and we therefore see a cut from the UK Government, whose fault is that?

Donald Cameron

I am not here to give evidence, cabinet secretary—you are.

On the specific consequentials that you referred to, I think that you said that some of the money came from local government funding in England. Is that right?

Kate Forbes

It came from policy changes to do with non-domestic rates. In advance of the UK budget, no UK Government minister is giving us any information on what the UK Government intends to do with its budget, despite our repeatedly asking. The UK Government indicated to local government that it is going to make some changes around non-domestic rates, which is where we got our information from.

Donald Cameron

So it is not about additional funding from the UK Government going to local authorities in England.

Kate Forbes

No, it is about changes that the UK Government is making to non-domestic rates, which it had to indicate to local authorities in England and Wales. It is worth bearing in mind that those local authorities are facing the same levels of uncertainty as we face.

Donald Cameron

In my final question, I want to try to analyse the issue of the fossil fuel levy. I am advised that there was no mention of that in the draft budget. Can you be a bit more specific about the role of Ofgem in the matter?

Kate Forbes

Ofgem contacted us on 18 February with new information, which has informed our current position. The issue with the fossil fuel levy is largely to do with how to apportion the surplus in the fossil fuel account. That money has always been there—it is our money—and Ofgem contacted us about how to apportion the surplus.

John Mason

I realise that European Union funding is not part of our budget, but the committee referred to it in a fair amount of detail in our report, and you responded to that report. Have you had an indication from the UK Government as to whether—and, if so, how and when—it will replace EU funding such as structural funds and common agricultural policy funding?

Kate Forbes

We share the committee’s concerns regarding the uncertainty that is associated with that EU funding and the serious consequences that there will be from its loss. The Conservative Party committed to replacing certain funding streams as part of its election manifesto, but, on that issue as on everything else, we await further detail on the exact amounts, how those funds will operate and when they will be provided. We will continue to push for clarity to ensure that there is no cliff edge from December 2020 onwards. However, on that and on everything else, we await confirmation on 11 March, in the hope that it will come then. If it does not, we will be waiting for the spending review.

The Convener

That was a lengthy evidence session, but it was useful for information sharing. We should have a wee break, so I will suspend the meeting for five minutes, after which we will begin the formal process on the Budget (Scotland) (No 4) Bill at stage 2.

11:13 Meeting suspended.  



11:18 On resuming—  



The Convener

We begin the formal proceedings at stage 2 of the Budget (Scotland) (No 4) Bill.

Section 1—The Scottish Administration

Section 1 agreed to.

Schedule 1—The Scottish Administration

The Convener

Amendment 1, in the name of the cabinet secretary, is grouped with amendments 6, 7, 19 and 20.

Kate Forbes

Amendments 1, 6 and 7 will increase three portfolio totals in schedule 1, in accordance with the budget agreement with the Scottish Green Party. Amendment 1 will increase the communities and local government authorisation by £95 million. Amendment 6 will increase the justice authorisation by £18 million, to deliver on the commitment to increase police resources, with £13 million of resource and £5 million of capital.

Amendment 7 will increase the transport, infrastructure and connectivity authorisation, to deliver on the commitment to provide an additional £60 million, which will be £15 million of resource towards the preparations to introduce free bus travel for young people aged 18 years and under and £45 million capital for net zero projects, including £15 million for local government.

Amendment 19 will update the total amount of resources in schedule 1, and amendment 20 will increase the total cash authorisation for the Scottish Government.

I move amendment 1.

Amendment 1 agreed to.

The Convener

Amendment 2, in the name of the cabinet secretary, is grouped with amendments 3 to 5 and 8 to 18.

Kate Forbes

These technical amendments will update schedule 1 to reflect the revised ministerial portfolios. Amendments 2 to 5 reflect the formation of the finance portfolio. Amendments 8 to 10 reflect the formation of the rural economy and tourism portfolio. Amendments 11 to 15 reflect the formation of the economy, fair work and culture portfolio. Amendments 16 to 18 reflect the formation of the constitution, Europe and external affairs portfolio.

I move amendment 2.

Amendment 2 agreed to.

Amendments 3 to 19 moved—[Kate Forbes]—and agreed to.

Schedule 1, as amended, agreed to.

Sections 2 and 3 agreed to.

Schedules 2 and 3 agreed to.

Section 4—Overall cash authorisations

Amendment 20 moved—[Kate Forbes]—and agreed to.

Section 4, as amended, agreed to.

Sections 5 to 11 agreed to.

Long title agreed to.

The Convener

That ends stage 2 consideration of the bill. Thank you, everyone.

Meeting closed at 11:22.  



Budget (Scotland) (No.4) Bill as amended at Stage 2

Stage 3 - Final amendments and vote

MSPs can propose further amendments to the Bill and then vote on each of these. Finally, they vote on whether the Bill should become law

Final debate on the Bill

Once they've debated the changes, the MSPs discuss the final version of the Bill.

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Final debate transcript

The Presiding Officer (Ken Macintosh)

The next item of business is a debate on motion S5M-21113, in the name of Kate Forbes, on the Budget (Scotland) (No 4) Bill at stage 3.

Before the debate begins, I am required under standing orders to decide whether any provision of the bill relates to a protected subject matter—that is, whether it modifies the electoral system and franchise for Scottish Parliamentary elections. In my view, no provision of the Budget (Scotland) (No 4) Bill relates to a protected subject matter. Therefore, the bill does not require a supermajority to be passed at stage 3.

I call the cabinet secretary, Kate Forbes, to speak to and move the motion in her name.

15:09  



The Cabinet Secretary for Finance (Kate Forbes)

As this is the final stage of the Budget (Scotland) (No 4) Bill, I am sure that everybody is delighted to be nearing the finish line. I know that all communities will be grateful for the certainty that the bill will give when it is passed at 5 o’clock today, subject to its being agreed to by Parliament.

I would like to thank all subject committees and political parties for their deliberations on the budget. I fully appreciate that the challenge that was faced in ensuring that there was appropriate scrutiny within a shortened budget process meant that everybody had to participate in a slightly different way, and I recognise the value that everyone has added to the process.

In particular, I thank the Finance and Constitution Committee for its carefully considered report on the budget, to which I responded on Tuesday, and for its recognition that the Scottish budget is managing significant uncertainty and that the fiscal framework presents challenges for the Scottish Government and the Scottish Parliament. I agree, which is why I am continuing to press the United Kingdom Government for urgent change to give this Parliament the fiscal firepower that it needs to meet the challenges that we face, not least that of the economic fallout of Brexit.

This budget is one that delivers for all of Scotland: it delivers stability and certainty; it delivers investment in our economy and our public services and in tackling child poverty; and it delivers on our commitments to respond to the global climate emergency. All of that contributes to our collective wellbeing, guided by the national performance framework, and recognises that, for Scotland to become

“a more successful country, with opportunities for all ... to flourish”,

we must make progress on delivering our national outcomes—our economic outcomes, our social outcomes and our environmental outcomes.

Taking a wellbeing approach means prioritising investment for the greatest impact on improving lives across Scotland now and creating the conditions to ensure the wellbeing of future generations. Crucially, that includes addressing deep-seated inequalities. What we choose to measure really matters, because it drives political focus and public activity. We need to look beyond narrow gross domestic product measures if we want to have an inclusive society and a sustainable future. Economic growth will remain an important objective of the Scottish Government, but to build the kind of country that we want, that growth must be sustainable and its benefits must be widely shared.

As we look ahead to the challenges of the climate emergency, increasing automation and an ageing population, the argument for a broader definition of what it means to be successful as a country becomes more compelling. That is why, in 2018, the Scottish Government took the initiative to establish a new network, the wellbeing economy Governments group, which brought together as founding members Scotland, Iceland and New Zealand. Its purpose is to assemble like-minded countries to challenge the narrow focus on GDP and to shape a vision for enhancing wellbeing through our approach to the economy.

The circumstances of the budget have been challenging, and it is important that we all recognise the risks that have been created by the UK Government and its delayed spending plans. Members will be well aware that we faced an unprecedented context for the Scottish budget, with significant uncertainty being caused by the UK Government’s decision not to hold its budget until 11 March.

The context for next week’s UK budget is, of course, now also being influenced by the response to coronavirus. Although our most immediate concern will always be the direct risk to people’s health, over the year ahead, the economic and fiscal impacts will be important factors for our public services, our economic output and public spending. The Cabinet Secretary for Health and Sport provided a substantive update to Parliament on Tuesday, and constructive engagement is taking place with the UK Government and other devolved Administrations to support an effective overall response. For my part, I am engaging constructively with UK and devolved finance ministers on the fiscal and budgetary implications. Last week, I raised Covid-19 with the Chief Secretary to the Treasury, and I will discuss the issue again with him and my counterparts from Wales and Northern Ireland next Tuesday.

We will also work across Government and with delivery partners to assess the potential cost implications within Scotland. Although the Scottish budget includes significant increases in funding for health and local government and a range of support and reliefs for businesses, it will be important to keep those matters under close review.

James Kelly (Glasgow) (Lab)

Does the cabinet secretary think that this is a fair budget if someone who earns less than the living wage will pay an above-inflation increase of 4.8 per cent in council tax while a Government minister earning £90,000 and above will pay less in income tax?

Kate Forbes

The Labour Party used to attack the council tax freeze, and now it is accusing us of giving local authorities more freedom to determine how to increase it. What is fair is ensuring that local authorities can use those levers to determine how their resource is spent.

To come back to the budget, it will be important to keep matters related to it under close review, not least because we might have an update next week, with the UK Government’s budget. We need to ensure that we are as well equipped as possible to respond to the potential challenges that lie ahead.

I return to our wider approach. The delayed UK budget meant that we had to use the Conservative general election manifesto as the basis for our assumptions on consequentials, and use provisional block grant adjustments that are based primarily on economic forecasts from March 2019. In setting the budget, the Government has taken a prudent and carefully measured approach that is based on the best available information. The Government is leading action to provide certainty for local government and other vital public services. I have made a judgment call. I believe that it is the right one, that it protects Scottish interests and that the range of risk factors has been carefully considered. The country needs certainty, the people of Scotland need this budget and we must deliver for them.

On reflecting on the circumstances under which we are setting the budget, I am certain of the need to bring forward early updates to the fiscal framework. The Finance and Constitution Committee and the Scottish Fiscal Commission have highlighted that the Scottish budget faces the prospect of significant reconciliations in coming years. It is obvious that the borrowing and reserve powers that are available to the Scottish Government are insufficient to manage the volatility that is inherent in the fiscal framework, and I am seeking immediate changes to those powers from the UK Government. The powers must be reviewed in full as part of the wider review of the fiscal framework that is due to take place in 2021 and 2022. In that review, I will seek to ensure that the fiscal framework is fair, effective and transparent, in line with the Smith commission’s principles.

Increased devolution and the fiscal framework have fundamentally changed the context for the Scottish budget. More than ever, we need a more strategic approach. I am pleased to share with members that I have written to the Finance and Constitution Committee and the Scottish Fiscal Commission to announce my intention to publish the medium-term financial strategy on 21 May 2020. The MTFS is an integral part of an improved Scottish budget process, and is a good example of Parliament and Government working together.

Given the circumstances in which we have found ourselves this year, the MTFS will be an opportunity for us to reflect on the implications of the UK budget and to take stock of the Fiscal Commission’s forecasts for the next two budget years. It will also be an opportunity to make the case for the changes that we need to make to the fiscal framework if we are to be able to manage the new levels of risk and volatility.

The passage of the Scottish budget today will provide almost £50 billion of investment in public services and the economy to benefit the people of Scotland. In approving this year’s budget, we make the investments for Scotland now and for our future. Parliament is at its best when all parties engage constructively. The public finances and the decisions that we make about our public services deserve serious engagement. That is why I invite all members to support this budget, and I am proud to commend it to the chamber.

I move,

That the Parliament agrees that the Budget (Scotland) (No.4) Bill be passed.

15:19  



Donald Cameron (Highlands and Islands) (Con)

As the cabinet secretary noted, we are in the final lap of the budget process. As we approach its culmination, I thought that it would be appropriate to begin by reflecting on some of the positives of the past couple of weeks. I welcome the fact that the cabinet secretary sought to engage with all parties, including the Scottish Conservatives, in the process. I also welcome the fact that she has accepted some of our budget asks, including additional funding for councils and extra resource funding for our police. Those are positive developments but, sadly, that is where the good news ends. In terms of both process and substance, I suggest that the budget has been deficient.

I will first consider process, and forgive me if I dwell on the matter slightly longer than might be expected, but the technicalities matter here. I acknowledge that the cabinet secretary introduced the budget in difficult circumstances, and I accept that it is a draft budget, which is always subject to small tweaks here and there. That does not negate the lack of transparency on what money was ultimately available in her negotiations with other parties. In many respects, that is simply a repeat of what happened with Scottish National Party budgets of the past.

The cabinet secretary presented her budget and repeatedly stated that every available penny had been allocated, much like her predecessor used to do. In her statement to Parliament, she said:

“In allocating those resources, we have used every fiscal lever that we have to the fullest extent. Every penny is accounted for”.—[Official Report, 6 February 2020; c 76.]

In the Finance and Constitution Committee, she said:

“When I say that I have deployed every penny on the face of the budget, I mean that I have deployed every penny”.—[Official Report, Finance and Constitution Committee, 12 February 2020; c 40.]

One week later, she said:

“My key line is that we have deployed every penny”.—[Official Report, Local Government and Communities Committee, 19 February 2020; c 40.]

In anyone’s mind, that is a clear and unequivocal position. Yet, if we fast forward to the stage 1 debate last week, miraculously, an extra £173 million appeared from nowhere. How can any committee of the Parliament do its job of pre-budget scrutiny when the figures that it is looking at can change at whim?

John Mason (Glasgow Shettleston) (SNP)

Donald Cameron knows that the money did not appear from nowhere; he seeks to mislead members in the chamber. He had a clear explanation from the cabinet secretary yesterday as to where the money came from, after the stage 1 process.

Donald Cameron

I do not accept that for one minute.

For example, how can the Local Government and Communities Committee do its job properly when allocations that it must scrutinise can change to the tune of almost £100 million? I am not talking about the merits of that funding, simply the procedure by which it happens. I will give some other specific examples. As was noted yesterday during the debate on the rate resolution, there is a major concern surrounding the near £1 billion budget black hole that is facing the Scottish Government over the next three years in terms of budget reconciliations. That is not simply a question of the fiscal framework; it is an issue that has been bubbling away for some time.

As the Scottish Fiscal Commission notes in its forecast, the Scottish Government has chosen to borrow resource funding for the first time to cover the £207 million-worth of reconciliations for this year. That means that a future Scottish Government will be saddled with the debt and decisions of the current Administration. We also know that, in next year’s budget, the Scottish Government will have to find an estimated £555 million-worth of reconciliations, and a further £211 million-worth the following year. In total, that is almost £1 billion to find, plus borrowing to be paid back.

Kate Forbes

Is Donald Cameron therefore agreeing with me that the fiscal framework needs to be reviewed and early? Ultimately, it is about Westminster clawing back money because of independent forecasting errors.

Donald Cameron

The cabinet secretary is still borrowing the money; she still has to pay it back.

Next year, the cabinet secretary may well have to deal with a far more challenging financial picture, and I contend that she will have to commit to a more transparent and flexible approach if she is to gain the support of any party in the chamber.

I will turn to the £173 million deal with the Scottish Green Party. The funds for that are shrouded in mystery. We have a curious reprofiling of non-domestic rates, in respect of which, with some creative accounting, we seem to be producing money from income that is not yet earned, and shuffling that money from year to year. Quite apart from the large £670 million increase over the next three years for hard-pressed businesses, it is yet another example of how the Government is scrambling about to claw out extra cash.

What is even stranger about the reprofiling is that the Government knew about that source of cash not just three weeks ago, when it appeared in the draft budget, but last year, when Derek Mackay planned to reprofile £100 million for his budget. Why could the cabinet secretary not have been open earlier about that source of funds?

Kate Forbes rose—

Donald Cameron

Sorry, I want to carry on.

Further consequentials from the United Kingdom Government also form a major part of the deal’s funding. We know that, in terms of the block grant, the Scottish Government’s budget from the UK is rising by more than £1.5 billion this year in real terms—that is the Scottish Government’s own estimate. It is higher in real terms than it was when the SNP took over in 2007. The fiscal transfers from the UK to Scotland are worth a union dividend of nearly £2,000 for every individual in Scotland.

The cabinet secretary has said again and again that there is uncertainty and a lack of clarity around consequentials from the UK Government. How can she complain about uncertainty around consequentials when she has already done a deal with the Scottish Green Party that is funded by additional consequentials?

I turn to some of the broader points in the budget. I endorse what the cabinet secretary said about coronavirus and the need to keep a watching brief. Scottish Conservative members will do what they can to assist in that.

Most political parties chose to engage in negotiations with the cabinet secretary during the budget process. We approached those negotiations in good faith, with serious, reasonable requests. Our position on tax was debated at length yesterday, and I do not intend to repeat the points that I and others made then. However, we also called for £15.4 million specifically for drug rehabilitation beds. That figure was not plucked from thin air. We backed calls from Faces & Voices of Recovery UK, which said:

“If the Scottish Government are serious about tackling drug deaths, £15 million for drug rehabilitation beds is the absolute minimum we expect from this budget.”

Since the Government came to power, the number of beds has fallen dramatically and, as everyone knows, drug deaths have increased dramatically in that time, so we remain bitterly disappointed that that specific commitment was not accepted.

We also backed the call from the Convention of Scottish Local Authorities for £117 million to make up for the cuts to the capital allocation for our cash-strapped local authorities. Even after the agreed budget deal, Scotland’s local authorities have stated explicitly that the agreement only makes good the underfunding of new and existing commitments, and does nothing to address inflationary or demand pressures. According to COSLA, the settlement still represents a 2 per cent, or £205 million, cut in real terms in revenue funding for local government.

We made reasonable demands, but the cabinet secretary chose instead to do a deal with the Greens. Never before in the history of the Parliament has an Opposition party asked so much for its support, and happily received so little in return.

To sum up, we cannot support the budget. It is another pay more, get less budget. It underfunds our public services, especially councils. It fails to tackle Scotland’s drugs crisis. Most of all, it does not meet the priorities of the people of Scotland. I urge the Parliament to vote against it later today.

15:27  



Rhoda Grant (Highlands and Islands) (Lab)

This year, Scottish Labour entered into discussions with the Scottish Government in the hope, if not in the expectation, that we could push the Government to invest in Scotland. After 13 years of mismanagement, our country and citizens desperately need real change. The money that the Government has wasted on vanity projects and poor decisions, had it been invested properly, would have helped build our economy. Instead, the Government squanders the public purse and it refuses to invest. It refuses to increase income tax for the wealthy and it cuts services to the poor. Poverty is on the rise and it will not abate without action from the Government.

Kate Forbes

Will the member confirm for the record that, at 5 o’clock today, her party will vote against £1.4 billion to mitigate poverty and support low-income families?

Rhoda Grant

We will be voting against cuts of over £200 million to the public sector, which will damage every family and reduce more people to poverty. We cannot vote for a budget that does that.

The Government boasts of not increasing income tax but, as James Kelly has said, it heaps inflation-busting rises on to the regressive council tax, which it promised over a decade ago to abolish—a promise that it reiterated to the Greens in last year’s budget negotiations, and for which the Greens backed that budget.

We are still holding talks about the council tax, which we agreed to take part in again more in hope than in expectation. Our fears have been confirmed. Those talks are not about replacing the council tax; they are about simply tinkering with bands and revaluation. It is clearly a process of treading water to keep the Greens satisfied. Frankly, it is a waste of our time, and we need to re-evaluate whether those talks are worth proceeding with. The Greens must see that, yet they have fallen for the same old trick again, only this time with young people’s free bus travel. They have been sold short. The same ploy was used when promising sustainable ferry funding for the northern isles, which was another sop to mislead parties to back the budget. Frankly, those promises were a waste of the very breath that was used to make them. I know that the SNP does not like that, but it is the truth.

We asked that the Government provide young people under the age of 25 with free bus travel. That policy would have helped young people become more independent while making family travel more affordable. It recognised that young people are more likely to be low paid, and it would have helped them get to work and gain the experience that they require to earn higher salaries. In addition, it would have helped us all by forming among young people the habit of using buses, which would have been good for them and the planet.

Instead, the Greens settled for talks about introducing free bus travel for young people aged 18 and under. That short-changes young people because, on past performance, it is highly unlikely to happen. However, if it does happen, it will end around the time when young people can hold a driving licence, so the policy could, in fact, have the impact of encouraging them to buy a car. That wrong-headed compromise will incentivise the very behaviour that we seek to change by encouraging young people towards the car rather than away from it.

We wanted fair funding for local government, but it is now facing a £205 million cut in real terms. How does that counteract dropping educational standards? How does that provide additional support for children with learning difficulties? How does that provide care in our communities, where we can keep people well at home instead of their being held prisoner in hospital, to their distress and at greater cost to the public purse? That is totally irresponsible—and yet it continues.

We asked for a budget that dealt with climate change and was tested against the national performance framework, yet what we have is smoke and mirrors. The Fraser of Allander institute said:

“it is disappointing that the government has not done more to produce comparable numbers for previous years, as the failure to do so inhibits scrutiny of spending changes, and does little to improve overall transparency”.

The cabinet secretary said that this is a budget for wellbeing but, frankly, with the Government’s promises, I am not willing to take its word for it. We cannot track through the budget document where it would improve wellbeing, so we cannot see that it is a wellbeing budget. What is clear, however, is that the cuts that the budget makes to local government will damage the wellbeing of people who depend on those services.

Our final ask was to invest in further and higher education. We face a changing workplace with robotics and digitisation. Our existing workforce, and young people who are coming into that workforce, are ill prepared, yet our education standards are falling and budgets have been cut. That does not augur well for our economy, and this is a timid response from Government when we need a response that prepares our workforce for the brave new world.

The cabinet secretary referred to the fiscal framework that was negotiated by the SNP, and which means that our budget will be cut by £200 million this year and will face a black hole of up to £1 billion over the next three years. That is mismanagement on a unprecedented scale. [Interruption.] The Government has wasted £198 million on delayed discharges since Jeane Freeman took office; it is wasting £1.4 million on the sick kids hospital every month, without one child receiving care there; and it could have replaced the whole ferry fleet for the money that it is going to squander on two ferries that will never sail. It has consigned 33,000 people to the dole—[Interruption.]—yet this is a Government that thinks that it can negotiate independence. [Interruption.]

The Presiding Officer

Order, please. If someone wants to intervene, they can stand up and ask for an intervention; otherwise, I ask members to be polite. Half the chamber is simply making noises.

Rhoda Grant

The budget is damaging, it does not invest in the future of Scotland or its people and it does not deal with mismanagement, and that is why we cannot support it.

15:35  



Mark Ruskell (Mid Scotland and Fife) (Green)

I start by thanking Kate Forbes, because it is fair to say that the spirit of compromise that she brought to the negotiating table in her first-ever budget rescued negotiations with the Greens this year. I am sure that it will not be her last deal with the Greens in Parliament.

From next year, more than 700,000 young people and their families across Scotland will benefit from free bus travel for under-19s. The policy is so bold and transformational that Opposition parties are still rubbing their eyes in disbelief. They cried, “Fake news! It doesn’t exist!”—but it does.

Murdo Fraser (Mid Scotland and Fife) (Con)

Will the member give way?

Mark Ruskell

I was just coming on to Mr Fraser: I will let him intervene in a minute. Even he will be able to leave his beloved classic car in the driveway, quietly rusting away, while he gets a cheap family bus ticket to the next climate strike in Perth.

Murdo Fraser

Sadly, I have to tell Mr Ruskell that I am probably too old to benefit from his policy.

I have a serious question for him. Perth and Kinross Council, which is in the area that we represent, currently spends £7 million a year on school transport to carry pupils who live more than 3 miles away from their school to school. Will the council be able to save that money when his new policy is introduced?

Mark Ruskell

Absolutely. Schools and youth groups around Scotland that organise trips will be able to use scheduled public transport services and will be able to benefit directly from the policy. Of course, Perth and Kinross Council will get an additional £2.6 million as a result of the budget deal, which will ensure that cuts that have been proposed by Perth and Kinross Council can be taken off the table and reversed.

Neil Findlay (Lothian) (Lab)

Will Mr Ruskell take an intervention?

Mark Ruskell

I need to make progress.

As well as benefiting Mr Fraser, the policy of free bus transport for under-19s will tackle poverty and isolation and will give young people the mobility and freedom that they need in order to access learning and job opportunities—not to mention the social benefits. That is why the Poverty Alliance has warmly welcomed the policy, and has noted that affordable public transport is essential in

“loosening the grip of poverty on people’s lives.”

The measure will make school trips cheaper, and so widen educational opportunities. Furthermore, buses will be busier and footfall on them will increase, particularly in rural areas, which will make services more viable. The policy will be transformational and will build the case for even more public transport to be free. Maybe one day we will even be as wild as Luxembourg and make all public transport free.

The Scottish Greens are, of course, the party of local government. We want strong and well-funded councils that provide valuable services, and which fairly raise revenue locally using a wide suite of new powers. Since the beginning of this session of Parliament, the Scottish Greens have delivered more than £0.5 billion in total for local services. Across Scotland now, councils are making decisions about where to invest those vital additional funds. For example, Glasgow City Council has, in the past week, confirmed that the Green budget deal means that the Blairvadach outdoor education centre has been saved.

Pauline McNeill (Glasgow) (Lab)

The Greens voted against that.

Johann Lamont (Glasgow) (Lab)

The Greens voted to close the centre.

Mark Ruskell

Members are welcoming that. I hope that North Lanarkshire Council follows suit and saves the Kilbowie outdoor centre.

As I pointed out to Mr Fraser, as a result of the budget deal, councils that are in the process of approving damaging cuts, including Fife Council, now have sufficient funding to go back and reverse the cuts. Tory austerity might not be over, but we in the Green Party will not rest until we have restored democratically accountable powers to councils to protect the services that we all value.

Graham Simpson (Central Scotland) (Con)

Will the member take an intervention?

Mark Ruskell

I will give way briefly, if I can get the time back, Presiding Officer.

The Presiding Officer

You will get the time back.

Graham Simpson

Is Mark Ruskell seriously claiming that no council will have to make cuts on the back of this so-called deal?

Mark Ruskell

I am not claiming that. I am saying that we have made a significant contribution; we have closed the £95 million gap that COSLA identified. As Graham Simpson knows, in order to fix the problem we need a new fiscal framework for local government, and we need to restore powers. I thought that the Tory party was the party of localism, but it appears that the Tories do not want to give powers to local councils to restore investment in local services.

I will move on to other areas of the deal. There is a lot to get through.

We need safer streets to live in. For the first time ever, Scotland’s budget for cycling and walking infrastructure has reached £100 million. Cycling UK has welcomed that, and has said that it shows that

“Scotland’s ambitions to cut emissions and get more people active is not just hot air.”

That is real action and real investment.

If we are to reduce reliance on the private car, we need to make rail more attractive than road. That is why we have secured an additional £5 million funding to advance rail projects to the next stage. Vital projects such as the Milngavie line redualling and the Alloa to Dunfermline extension can now be taken to the next stage of development. Abandoned communities will be reconnected to the rail network and services will be improved beyond recognition.

As part of our deal, the Scottish Government has also agreed in principle to align investment decisions with climate targets—specifically, to review controversial plans to spend £120 million on a flyover at Sheriffhall. That is just the start, and the infrastructure commission’s advice must be heeded: every project that increases road capacity must be tested to destruction. There should be no public money wasted on projects that lock in congestion and climate change for generations to come, while sucking up all the money that is available for repairing roads.

I am delighted that an additional £25 million will be invested in making Scotland’s homes more energy efficient. That is a win-win-win: warmer homes that are low carbon and cheap to run. Critically, the cash that has been secured by the Scottish Greens will be given to councils to spend on the low-income households that most need it.

There is no doubt that we need to do much more to tackle the climate emergency, to deliver wellbeing and a strong economy and to end child poverty. The budget is a step in the right direction—bodies including the Poverty Alliance, the Children and Young People’s Commissioner Scotland, Friends of the Earth Scotland and WWF agree.

Every day that we are in Parliament is an opportunity to drive change for the good; there is no end point and no moment when we can say that the job is done.

The Scottish Greens will vote for the budget today; we will celebrate the wins, but we will stay hungry for the change that is yet to come.

15:42  



Willie Rennie (North East Fife) (LD)

This budget was inevitable. Just as night follows day—probably as certain as Stewart Stevenson making a speech later on about his ancestors—there was no doubt that this was an inevitable budget. Councils were always going to face cuts. That has been the Scottish Government’s approach to budgets for a number of years now.

Stuart McMillan (Greenock and Inverclyde) (SNP)

Will the member take an intervention?

Willie Rennie

I will not, just now. I had hoped that Stewart Stevenson would tell me about one of his ancestors. Alas, that will come later, I am sure.

Although the Government says that the budget is a generous deal, it is cutting £200 million from local government budgets. That is not generous. I suppose that it was inevitable that more money would be found, despite the protests from the new finance secretary. The Government said that there would be no more money, but later said that there would reprofiling of the non-domestic rates pool and that there were emerging underspends. It was either very naive to take an approach that included no money for flexibility to account for other parties’ priorities, or it was extremely reckless. It was rather naive even to suggest that in the first place.

It was inevitable that the Greens would back the budget. After their fabricated jig that has been going on for a number of years now, they have been duped by promises of a review about the possibility of maybe having free transport for young people. The council tax talks have been going on for a year now, which Rhoda Grant rightly alluded to, and have made little progress, with no proposition whatsoever being forthcoming from the Government. We need real progress on that—if it is not yet more duping of the Green Party.

The budget was inevitable, but some things have changed. Once, the Government could claim—it tried to claim—that it was competent on capital projects, but now it is wholly incompetent. It is mismanaging project after project: the Aberdeen western peripheral route is over budget, the ferries have doubled in cost, the farm payments information technology system is way over budget and the Aberdeen hospitals are the latest catastrophe in the mismanagement of capital projects. This is a Government that is not capable on capital projects, which is why we should be reluctant to endorse a financial strategy from it for the next financial year.

The Government has failed in a number of areas. In relation to councils, which I have already mentioned, the Scottish Government began the budget process without even baking into the budget the promises that it had already made on behalf of local government. Those were promises that were imposed on local government. Some of them were good. However, a Government should never propose to improve public services unless it is prepared to fund them in the first place. To start off with a negative is wholly irresponsible. The Government has made promise after promise. In the future, it should make funding promise after funding promise, rather than leave councils to pick up the tab.

The Government has also failed the police. We have heard repeatedly about leaking roofs, fungus growing in police stations, the broken down cars and—[Interruption.]

The Cabinet Secretary for Justice should listen to this very carefully. We have heard repeatedly about the stress and strain that ordinary hardworking police officers are under. Remember: one in three police officers turns up to work mentally unwell. We should be funding the police force properly. We should not be asking them to look after us and keep us safe while failing to fund them.

The Cabinet Secretary for Justice (Humza Yousaf)

The budget is providing an extra £60 million for Police Scotland. Can Willie Rennie tell us how many times he made representations to Danny Alexander, the Liberal Democrat former Chancellor of the Exchequer, who pinched £125 million in VAT from Police Scotland?

Willie Rennie

This Government got itself into a mess of its own making. [Interruption.]

The Presiding Officer

Order.

Willie Rennie

This Government centralised the police when it did not have to. The Government ended up with a VAT bill of its own making. That is why the Scottish Government cannot be trusted to manage Scotland’s police. The justice secretary should be ashamed of himself for making that intervention.

The Government has failed—[Interruption.]

The Presiding Officer

I ask members not to make remarks directly to the member who is speaking. I ask all members to show a little more respect. The noise in the chamber is bordering on rude, rather than just being political interruptions.

Willie Rennie

Thank you, Presiding Officer. These are important matters and they deserve to be considered incredibly carefully. It is a matter of trust in the Government. The Government has failed our public servants repeatedly and should be ashamed for doing so.

The Minister for Local Government, Housing and Planning (Kevin Stewart)

Will the member take an intervention?

Willie Rennie

I will not, just now.

The islands of Orkney and Shetland were promised two whole years ago that their interisland ferries would be funded in full. A package of £16 million was the price. The islands are still £5 million short—two years later. Yet again, that is a promise that was made by the SNP Government that was not kept.

The Government has failed on the councils, the police and the ferries. It has also failed by keeping money back from public services. We all know that there will be no independence referendum this year, but the finance secretary has told me that she is keeping money back for that possibility. That is not something that we should be doing when our police are short of money, when councils are short of money and when ferries in the northern isles are short of money.

The Government has the wrong priorities. Only when it has the right priorities will the Scottish Liberal Democrats support the budget.

15:49  



Bruce Crawford (Stirling) (SNP)

In the stage 3 debate on the budget, I am going to try to bring at least a bit of what I hope is reasonable perspective to the deliberations—albeit, on this occasion, through SNP eyes.

Let me begin by looking at the settlement for the coming financial year—with the caveat that we will not know the actual numbers until the UK Government sets its budget. As the Scottish Parliament information centre says in its budget briefing:

“the total budget will grow in cash terms by 14.4% in 2020-21 (12.4% in real terms). This large increase reflects the devolution of Social Security spending responsibility as well as a new budget line for Farm payments (which were previously EU income). With both of these areas stripped out, the growth in the Scottish budget is 4.9% in cash terms and 3.0% in real terms.”

So, yes, there is a 3 per cent real terms increase, but that figure includes both capital and resource spending.

Although those figures tell the story of the next financial year, they do not reflect the longer-term picture in real terms. That picture tells a very different story. Scotland’s discretionary resource budget allocation is now 2.8 per cent—£850 million—lower in real terms than it was a decade ago. That tells us that the 2019 spending round has not ended a decade of austerity in spending on front-line services other than in providing some relief to health services.

I do not know how closely each member was listening to what the Cabinet Secretary for Finance was saying during last week’s stage 1 budget debate. I was certainly listening very carefully, and I will quote just one small part of the finance secretary’s speech, which I believe was of particular significance. On the funding of additional commitments, she said:

“That is not without risk, forced as we are to set our budget in advance of the United Kingdom Government’s budget and with very little clarity on the block grant adjustments.”—[Official Report, 27 February 2020; c 68.]

The cabinet secretary mentioned that risk again today, and I congratulate her on the candid nature of that statement.

The budget is not without risk, and it is entirely possible that it might not work out as planned, because Kate Forbes has been required to set it in the most unusual of circumstances. She has had to set a budget without a great deal of the relevant financial information, data and policy direction that should have been available from the UK Government. I think the right balance has been found between meeting the extra demands that have been placed on her by the Opposition and exercising budget responsibility, but let us make no mistake: the risk is there.

Despite that, the Opposition parties—apart from the Green Party, of course—would have had the finance secretary increase that risk with their long list of demands for additional public spending commitments. I am glad that Kate Forbes has been prudent, has seen off those demands and has not created an even greater risk to the Scottish budget. If the projections and assumptions that the Scottish Government has had to make do not match the decisions taken by the UK Government in the forthcoming budget, let us remember that it was the Opposition that cried out for even more public spending.

We will all have to grapple with further risks in the future. In the next financial year, the Scottish Government and this Parliament will face around £555 million of negative income tax reconciliations because of how the fiscal framework works. To reach a budget agreement next year, when flexibility has all but been removed because of over £500 million of reconciliations before the budget negotiations have even begun, will be a real challenge.

First, to help the Parliament, its committees and the Opposition parties to navigate these difficult waters, I urge the Scottish Government to be as clear as possible about the scale of the challenge. Secondly, I ask the Government to clearly set out its strategy for tackling that challenge, so that the parliamentary committees can subject its proposals to appropriate scrutiny. Thirdly, I suggest that the Scottish Government enter into discussions with the Opposition at the earliest possible date in order to find agreement on the way forward, if that is achievable.

The Opposition parties need to play their part, too. They simply cannot go on asking for more and more additional public spending, because it is not going to be available.

Neil Findlay

Will Mr Crawford take an intervention?

Bruce Crawford

I am in my final minute, so I will do a Willie Rennie and say, “Not at this stage, thank you.”

If we are going to enter into more spending commitments, we must have a more mature and responsible debate about where the money is coming from to fund such commitments and how the negative income tax reconciliations are to be managed. To do otherwise would mean that we would not be prepared to face reality and, more worryingly, would expose the Scottish budget to even greater risk than is necessary.

I commend the budget that Kate Forbes has brought to the Parliament.

15:54  



Liam Kerr (North East Scotland) (Con)

One always tries to be scrupulously accurate in one’s contributions to these debates, but I fear that I made an error last week. In my contribution to the justice debate, I said that the SNP could give proper funding to the police, because the

“block grant will grow by more than £1 billion in real terms—a 2 per cent real-terms increase”.—[Official Report, 26 February 2020; c 33.]

However, it appears that I was wrong. In fact, compared to 2019-20, the Scottish Government’s budget will increase by around £1.6 billion in real terms—and all thanks to the UK Government’s spending decisions. My “mea culpa” might lead Kate Forbes to review her own position, because on 6 February she said to Parliament:

“Every penny is accounted for”.—[Official Report, 6 February 2020; c 76.]

Indeed, she told Parliament no fewer than 12 times that every penny had been deployed—even though, as Murdo Fraser pointed out at the time, very few people were entirely persuaded. Miraculously, she produced more than £170 million only days later.

Kate Forbes

If the member is so unhappy with my spending sources, what would he have recommended that we cut in order to support the Conservative Party’s proposed tax cuts and spending increases?

Liam Kerr

The answer is simple. We would end the uncertainty, boost businesses, support workers and grow the economy—all the things that the SNP has failed to do for 13 years.

Despite maxing out the country’s credit card when we are poised to receive the largest block grant in years, the cabinet secretary will still not properly fund our public services or our cash-strapped local authorities. Yes, the block grant is going up. It is the largest in years, so let us imagine what she could have spent it on.

At stage 1, I heard John Mason brazenly defy Unison and say that it was perfectly legitimate to offer only £60 million to the police. Members should bear in mind that that is £36 million less than the £96 million that is coming to Scotland in Barnett consequentials from police spending. Oh, how the Cabinet Secretary for Justice crowed last Wednesday—but that was before the chief constable told the Public Audit and Post-legislative Scrutiny Committee the very next day that

“The budget figures that were announced yesterday will still leave an operating deficit in the Police Scotland budget for 2020-21. For revenue, the deficit is in the region of £36 million.”—[Official Report, Public Audit and Post-legislative Scrutiny Committee, 27 February 2020; c 38.]

Wait—£36 million is exactly the same amount that the finance secretary is not passing on. But, hey; spending choices.

Kate Forbes could have put a mere £15.4 million of the £1.6 billion into drug rehab beds, to increase their number from the 70 that there are now back to around the 350 that there were when the SNP got in, which might have started to make a genuine difference to the record number of drug deaths in Scotland—but she did not.

She could have recognised that local authorities across Scotland will still see a real-terms cut of £117 million in capital spending, leading to their having to hike council tax and still make massive cuts—but she did not.

Instead, she bought off the Greens with a bus scheme that is allegedly worth £15 million—or did she? Let us look at what was actually offered: free bus travel for those aged 18 and under,

“subject to the completion of the necessary preparations, including research and due diligence”.

That ability to promise without promising borders on art. If I was back lecturing at university, I would put that wording in the negotiating skills section of the chapter titled “How to offer the world while committing to absolutely nothing”.

In an extraordinary irony, if we do, indeed, see the introduction of free bus travel for under-19s, it appears that it will be funded through reductions in council budgets, which will presumably have a knock-on effect on councils’ climate change spending and make them unable to repair the very roads that the buses are supposed to run on.

At stage 1, last week, I was in the chamber and listened as Alex Neil waxed lyrical about the bus travel promise. I intervened on him, and, as he sat, he quipped, “It gets easier.” At the time, I assumed that he was deploying his characteristic wry sarcasm as he braced himself for my inevitably incisive and challenging intervention, but now I realise that he was simply taunting the Greens. He was reflecting on how, each year, it gets easier for the SNP’s finance secretary to make the Greens’ red lines vanish.

I cannot finish without noting that business tax income will rise from £2.75 billion to £3.42 billion by 2023-24—a 25 per cent hike in only three years. That will drive away growth and help Scotland’s competition.

Let us finish the scene where we started. Last week, Donald Cameron suggested that Kate Forbes had played the Greens “like a fiddle”. He might wish to reflect on that, because not only has she called the tune and made them dance; she has produced a finished work that lacks dynamic quality, is full of wrong notes and is ultimately disappointing to those who are forced to listen. For those reasons, I shall not support this budget at decision time today.

16:00  



Alex Neil (Airdrie and Shotts) (SNP)

Liam Kerr said that I “waxed lyrical” in the speech that I gave last week. I can honestly say that I cannot make the same claim about the speech that he just made.

I say to all the Opposition parties, except the Greens, that we are living in very unusual circumstances because of the threat of the coronavirus. Therefore, uniquely this year, to consider voting against the budget—a budget that contains £15 billion for the national health service next year—in the middle of what could become a pandemic is absolutely irresponsible. I say to the Tory party and the Labour Party that anyone who does that is not fit to govern.

Neil Findlay

Will the member take an intervention?

Alex Neil

Of course—as always.

Neil Findlay

I thank my friend Alex Neil for taking an intervention. He knows that, when he was in opposition, he voted against a number of budgets. He knows that, as the SNP group is in opposition at Westminster, it votes against budgets. In local government, SNP groups vote against budgets all the time. It is a nonsense to suggest that, because a member votes against a budget, they are voting against every element of it. He knows that, and everybody else knows it.

Alex Neil

I do not remember when we did that in opposition because it has been so long since we were in opposition, and we never did so in the middle of what could become a pandemic. We need to get the message out across the country about the great possible threat that we face.

Let us suppose that Opposition parties, other than the Greens, got their way tonight and we had to dump this budget. What impact would that have on the NHS and hospitals, on schools and on a whole range of public services, including the police and prisons? There would be mayhem, and those parties would be responsible for bringing it about. If ever there was an occasion on which it is irresponsible to vote against a budget, it is today.

The circumstances faced by this budget are the £1.5 billion of UK Government cuts that we have faced in the past 10 years. Labour Party members have said practically nothing in opposition to the Tories about those cuts, because of their loyalty to the better together campaign. It is because of the £1.5 billion of cuts that we have faced the problems that we have faced in the past 10 years.

I heard those on the Tory benches crying crocodile tears about what they describe as large cuts to local government. Their party has cut local government budgets in England by 40 per cent. They cannot tell us about cuts to local government—we are protecting local government.

Mike Rumbles (North East Scotland) (LD)

I thank the member for giving way. I like listening to his speeches: they are always entertaining.

The member will know—because he was an MSP alongside me at the time—that when an SNP budget fell because people felt that it was right to vote against it, the SNP Government went away and produced a better one, and the next week we all voted for it.

Alex Neil

By that time we already had the UK budget and we knew exactly how much money we had to spend in the following year. This time, there is utter chaos in Westminster, so we will not get to know how much money we have to spend even after the budget next week—it will probably be the end of the month before we get to know that.

Murdo Fraser

Does Alex Neil accept that the current fiscal framework was negotiated at a time when UK budgets always took place in March, just in advance of the new financial year? Therefore, there is nothing unusual about this year’s situation; it is just that, in the past two years, we have got used to budgets taking place earlier in the fiscal year.

Alex Neil

Murdo Fraser has missed the point, which is probably why he was sacked as the Conservative finance spokesman and Donald Cameron has taken his place. One can understand Jackson Carlaw’s methodology—there is no doubt about it.

I will get back to my speech, Presiding Officer. After those interventions, I do not think that I will need injury time.

We have an excellent budget from Kate Forbes. One of the reasons for that is the new emphasis on increasing infrastructure expenditure in Scotland in line with the kind of percentage of GDP that is spent on infrastructure around the European Union, for example. That will lead to an additional £1.6 billion by the middle of the 2020s.

The Tories are quite rightly saying that we need economic growth. If any of them knew anything about economics, they would know that the best way to achieve economic growth is to spend money on infrastructure. All the evidence shows that every 1 per cent increase in infrastructure spend leads to a 1 per cent increase in the growth rate of the economy, but that every pound that is cut in income tax has only half that impact on growth. Further, that economic growth is often elsewhere, because it leads to increased imports, rather than a circulation of the money in our own economy.

The economic illiterates who are arguing against the budget would cause damage by putting money into tax cuts for people who do not need them, rather than spending the money on growth-creating infrastructure. It would be a huge mistake if we went down that road.

The Cabinet Secretary for Finance also referred to “fiscal firepower”.

The Deputy Presiding Officer

Please close shortly.

Alex Neil

I heard and was delighted by what the finance secretary said about the renegotiation of the fiscal framework. Can I also say to her—

The Deputy Presiding Officer

No, Mr Neil. Would you finish, please?

Alex Neil

My final point is that members should read the Smith commission report, because now that we are out of the European Union, the reason has gone for us not to control VAT in Scotland. We should argue for that, as well.

16:08  



Claudia Beamish (South Scotland) (Lab)

It is disappointing that this budget will only continue cuts to hard-working local authorities, forcing them to make difficult decisions and risking the reduction of essential services.

The Deputy Presiding Officer

Excuse me, Ms Beamish. When members leave the chamber, please do so quietly.

Claudia Beamish

Thank you, Presiding Officer.

With a full and fair local government settlement, climate opportunities could have been seized and there could have been changes for those who are living in the grip of poverty. That is why we will vote against the budget.

The Government seems to underestimate the impact that annual budgets have for decades ahead and therefore just how vital it is that this budget is fit for the climate emergency. It has been Labour’s ask throughout the budget process that the budget be made fit for purpose for tackling climate change and delivering a just transition for Scotland’s workers and communities.

The budget should have put an end to the past decade of mismanagement, with £898.8 million lost to local authority revenue budgets since 2013-14 under the SNP Government. However, the budget has not done that, and the next decade will not be nearly as forgiving.

I turn the focus on to local government, where there is still a cut of £205 million. COSLA states that its

“ambitions to tackle climate change are at risk when core budgets are under threat”,

and it emphasises that

“To address climate change we need ... Fair funding for revenue and capital budgets”.

Local authorities are perfectly placed to act on climate change and against fuel poverty, transport poverty and food poverty and to tackle flooding, bringing a better quality of life for our rural and urban communities while creating local, skilled jobs throughout our country through the just transition framework. Failure to take on climate change in this decade means failure to take on climate change—full stop. With the 26th session of the Conference of the Parties—COP 26—this year, we need to hold our heads up high with a climate-aligned budget.

The publication of the “Just Transition Commission: Interim Report” gave us a welcome reminder of the importance of the steps and the urgency of the implementation required. With more ministerial intervention and mutually reinforcing environmental and social policies, there are huge opportunities in innovation, progress and co-operation to seize. The SNP’s approach has not worked, and it has failed to engage in many ways: renewables jobs have been lost, going abroad; yards are left idle; and sectors such as energy and agriculture are rudderless and without direction.

Key to a positive future for our children and grandchildren will be the development of skilled and unionised jobs in communities across Scotland. There are many examples of courses across Scotland, not least in my South Scotland region. I will highlight but two. Dumfries and Galloway College offers courses for installers of solid biomass, heat pumps and more, and Heriot-Watt University offers an MSc in marine renewable energy through, importantly, distance learning. There is much to build on.

The “Just Transition Commission: Interim Report” recommended

“Development of a Climate Emergency Skills Action Plan”,

recognising the commitment to that in the programme for government. The commission stated that it

“would expect to see assessment of workforces most likely to be affected by the transition (including those indirectly affected through supply chains), and the most immediate and pressing skills ... needed.”

The commission also invited the Scottish Government to work with it over the year ahead to help inform the action plan’s development. That is surely also a precious opportunity to focus on how to support women into science, technology, engineering and mathematics courses as the skills action plan is developed.

However, how can the necessary opportunities for skills for a new green deal be developed across all sectors of the economy at the strategic and institutional levels given the successive cuts to our colleges and universities, which lain Gray laid out in his speech at stage 1 of the budget bill? All sectors will face strategic challenges for decades to come, and all spending decisions must be climate proofed from here on in.

Moving beyond this budget, we must also ensure that the updated climate change plan is robust and transformative. It is profoundly important that the reviews of climate assessment for future budgets deliver effective recommendations for action that lead to transparency and accessibility so that we can go forward together. The SNP Government must also do better to tackle the nature emergency that is intrinsically linked to the climate crisis. Nature solutions are real. We hear warm words from the Government about how it values nature, but the facts do not support that. Since the SNP assumed office in 2007, Scottish Natural Heritage has faced a real-terms cumulative loss of as much as £302 million.

Inevitably, where there are cuts, there is a serious impact. For example, 11 per cent of species found in Scotland are threatened with extinction; the Scottish Government is on track to meet only seven out of 20 of the Aichi biodiversity targets; and there have been radical reductions in site inspections, meaning that SNH’s responsibility for monitoring wildlife and habitats has been jeopardised. Further, the Scottish Environment Protection Agency has also had a real-terms cumulative cut in its budget of as much as £38 million since the SNP came to power.

Both those public bodies play crucial roles in maintaining and enhancing the health of our environments, the sustainability of industry and the living standards of communities. The Scottish Government should invest in those issues. They are quality-of-life issues that are rooted in the just transition principles across all sectors, and they are fundamental to the international, historic labour movement and Scotland’s future.

16:14  



Colin Beattie (Midlothian North and Musselburgh) (SNP)

I am grateful for the opportunity to contribute to this debate on the Scottish Government’s budget proposals for 2020-21. I am very conscious that the Scottish budget has been prepared against a backdrop of chaos and uncertainty in Westminster. We are in quite an unprecedented situation as we are uncertain how much of our tax money will be returned from London to fund vital services in Scotland.

The easy option would have been for the Scottish Government to have introduced a standstill budget that simply replicated last year’s budget, pending information on what Scotland’s handout might be. It is to the Scottish Government’s credit that it did not do so; instead, it chose to move forward in key areas that the people of this country value and support.

The budget includes a record £15 billion investment in healthcare and care services, which will deliver an essential child poverty payment, and expand early learning and childcare support by £645 million.

The Government pledged to deliver 50,000 new homes in this session of parliament, and it is investing £800 million in this budget to do so. In addition, the Government is committing an additional £300 million to ensure that momentum is maintained and the target is reached. There is nothing more important than providing a family with a home, a roof over their heads; it is a fundamental right.

Some £220 million has been committed to the Scottish national investment bank. That is a real opportunity to provide burgeoning young companies with patient capital, which is so lacking in the present market.

My experience as an MSP is that mental health is a significant issue that I have to deal with in my constituency. The investment of £117 million in mental health for people of all ages and at all stages of life represents a significant step forward, and I hope that that investment will be spent wisely.

I am pleased with all the investment and progressive steps forward that this Government is taking, and that income tax levels have been held so that no one will pay more this year than they paid last year. It is really important to note that more than half of Scottish taxpayers continue to pay less than they would if they lived south of the border. Our tax system in general is fair and progressive—it is probably the fairest in the UK.

All that investment and solid commitment to progress is in spite of the brutal Tory policy of austerity. After 10 years, the evidence of its failure is indisputable. Indeed, Scotland’s discretionary resource budget has been cut in real terms by £840 million over the past decade. The SNP Government has repeatedly called for an end to the austerity programme. It has been ignored. Although there are some fine words in London about ending austerity, the reality is that it lives on, and there is no indication that the UK will signal an end to that state of affairs.

Before I continue on the Scottish budget proposals, I make a small plea for my constituency. As part of the arrangement with the Green Party, there is a proposal to review the current initiative for Sheriffhall roundabout. The Edinburgh and south-east Scotland city deal means that plans are in place to upgrade the roundabout in order to help businesses and residents cope with the volumes of traffic. The Green Party has asked for a review of the upgrades, which would delay the process. A review is not in the interests of my constituents, and the considerable reaction from them to the Greens’ proposal has been overwhelmingly negative.

Alison Johnstone (Lothian) (Green)

The member will be aware that, on the day that the proposed roundabout is due to open, congestion will be 5 per cent worse than it currently is. Does the member really think that that is a good spend of £120 million? That money could make a difference by transforming the gridlock, the pollution and the congestion that blights our communities.

Colin Beattie

I cannot agree with the member’s assessment. Perhaps, if I can continue, I will be able to explain a few of the points.

Alison Johnstone

It is not my assessment; it is Transport Scotland’s assessment.

Christine Grahame (Midlothian South, Tweeddale and Lauderdale) (SNP)

I share the concerns of my SNP colleague. I represent the other part of Midlothian. What I, and I think my colleague, would say to the Greens is that the changes to the Sheriffhall roundabout will be useful to the buses, because we have no trains in that area; separately, there were walking and cycling facilities, but those had been got rid of.

Colin Beattie

I can only agree with my colleague Christine Grahame on that point.

The benefits of putting in place a solution to that long-standing choke point on the Edinburgh city bypass are multiple. I will list one or two of them. First, safe cycling and pedestrian routes will be put in place for the first time. That is an excellent first step in making the route greener and more sustainable. Many of my constituents have been waiting for those routes, so that they have alternative ways of travelling safely. Delaying the upgrades would prevent access to a green means of travel.

Secondly, instead of there being a significant traffic build-up at the Sheriffhall roundabout, traffic will be distributed to a variety of points, which will produce marginal traffic build-ups, as opposed to the significant traffic jams that currently happen. That will minimise idling traffic and longer car journeys as a result of delays.

Neil Findlay

Will the member take an intervention?

Mark Ruskell

Will the member take an intervention?

The Deputy Presiding Officer (Linda Fabiani)

Mr Beattie will be finishing very shortly.

Colin Beattie

I need to make progress.

The traffic jams resulting from the inadequate traffic-flow system mean that vehicles are often idling and producing high emissions and pollution. That is to the detriment of the surrounding villages and my constituents. The emissions could be lowered through better traffic flow, and the upgrades would enable that.

It makes every economic sense to have an efficient transport system in order to encourage businesses to move to or remain in the area. Efficient transport links reduce pollution and sustain jobs. Public transport and cyclists alike depend on them. I ask the Scottish Government and the Green Party to reconsider that potentially damaging and deeply unpopular review.

That was my small moment of dissonance in otherwise unequivocal support for what I consider to be an excellent budget. I extend my congratulations to the cabinet secretary on constructing it.

The Deputy Presiding Officer

Will you close now, please?

Colin Beattie

In recognising the benefits of the Scottish budget, I also feel a sense of frustration when I consider what we are not able to do because the powers are not currently within our grasp. It has been made abundantly clear that Westminster is not going to reinvigorate Scotland—only we can do that.

The Deputy Presiding Officer

You must close now, please.

Colin Beattie

With limited powers but huge ambition, we are achieving much more than anyone could expect. I urge support for the budget.

16:21  



Graham Simpson (Central Scotland) (Con)

This is a strange situation. We are debating the budget again and nothing has really changed since last week. Our very reasonable demands have still not entirely been met. The Greens have been conned, or perhaps they just rolled over as they always do—the wee nats doing the big nats’ bidding.

Patrick Harvie (Glasgow) (Green)

Oh, grow up!

Graham Simpson

Local government has been hit, as always. Council tax bills are going up and services will be poorer. Jobs will be lost, the grass will not get cut and Christmas has been cancelled in North Lanarkshire. Music tuition is being pared back, which is not good for the culture of Scotland. Nothing has changed since last week.

Earlier today, I asked the First Minister how she responded to Citizens Advice Scotland’s statement that council tax arrears is now its number 1 debt issue. She spoke some words but did not really give an answer. When I spoke in the debate last week, I said that we have seen council tax rise year after year and suggested that we would see council tax poverty if we had not already done so. It seems that I was right.

The citizens advice bureaux network in Scotland is seeing more and more people struggling to pay council tax due to general pressures on household budgets. Last year, it helped more than 2,000 people with council tax debts totalling nearly £7 million. That works out at around £3,000 per person.

Andy Wightman (Lothian) (Green)

Does Mr Simpson agree that the council tax is a regressive tax and that the debt problems that he cites will always be exacerbated by that simple fact? Does he also agree that the Conservatives have brought forward no proposals for scrapping the council tax and seem to want to maintain that regressive tax?

Graham Simpson

We have never argued that the council tax should be scrapped. My point is that the level of council tax increases, year after year, is hitting people in the pocket. There are lots of reasons for council tax poverty, but it cannot have helped that council tax bills have rocketed by 21 per cent in the course of this Parliament. Why is that? Because the Government has been starving councils of funds, forcing them to increase bills and make cuts to services at the same time. This budget is no different.

Council tax poverty is serious. Falling behind on council tax can lead to the removal of someone’s right to pay in instalments, being charged the whole council tax bill for the year and, ultimately, enforcement action by sheriff officers to recover the debt. It is striking that around 88 per cent of debt enforcement actions by sheriff officers relate to summary warrants for council tax. When council funding is cut, that is what happens.

Citizens Advice Scotland also raised concerns about the fall in the number of claims for council tax reduction. Since 2013, when that scheme was introduced to replace council tax benefit, around 85,000 fewer homes have applied for the reduction. Figures for the last quarter, released this week, continue to show a fall.

Citizens Advice Scotland believes that fall to be due to a lack of awareness among people, combined with the fact that council tax reduction requires people to make a claim, whereas access to the previous council tax benefit was joined up with receipt of other benefits.

Kevin Stewart

Will Graham Simpson give way?

Graham Simpson

Not at the moment.

I asked the First Minister whether she would join CAS in promoting the scheme, but she did not answer that, either.

Another of our reasonable asks was on homelessness. The draft budget makes £50 million available for the ending homelessness together fund, but as the Salvation Army pointed out last week, Scottish councils have submitted proposals for spending on homelessness that would cost £130 million. We asked for a rather modest £10 million extra. Even though that was a modest ask, sadly, the cabinet secretary has not gone for it. Ultimately, spending on homelessness saves the public purse. That is undoubtedly why we had a protest at First Minister’s question time.

Spending on energy efficiency comes into the same category. The draft Scottish budget included a small increase of £18 million, taking the total spending that is dedicated to energy efficiency measures, such as the provision of insulation, new heating systems and advice and information for renters and home owners, up to £137 million. However, that falls more than £100 million short of what the Existing Homes Alliance says is required—a doubling of investment to £240 million. Therefore, the £25 million for investment in local energy efficiency projects that was announced last week is pretty small beer.

Failing to invest properly in energy efficiency will drive up the cost of heat decarbonisation, and it risks undermining efforts to alleviate fuel poverty. At the current level of improvement—which, according to the most recent Scottish house condition survey, is just 2 per cent a year—it will take 25 years for the vast majority of our homes to reach the standard of energy performance certificate band C.

The draft budget misses a critical opportunity to capitalise on existing programmes to reduce fuel poverty and respond to the climate emergency before it is too late. The Greens cannot possibly say that that is good. Like much of the budget, it is a con.

16:27  



John Mason (Glasgow Shettleston) (SNP)

I am delighted to take part in another budget debate. We covered quite a lot of ground in last week’s stage 1 debate, and some of the same ground has been covered today. In between times, the Finance and Constitution Committee had a fairly thorough session with the cabinet secretary yesterday.

There are a few issues that I want to focus on. First, I warmly welcome the plan for free bus travel for under-19s. I had initially assumed that it would be exactly the same as the current scheme for those of us who are over 60, but it was good to hear Kate Forbes say yesterday that all options will be explored and, specifically, that what young people themselves want will be considered. I imagine that that discussion might include use of the ferries and the Glasgow subway.

Liam Kerr

Does Mr Mason think that it is appropriate to spend £15 million on bus passes rather than on residential drug rehabilitation beds?

John Mason

As I think I heard one of my colleagues saying, those are two different areas. If Mr Kerr listened to my speech last week, he will know that one of my themes was that we would all like to spend more money on a whole range of areas. If we had the money, we would all like to spend more on health, local government, the police and so on and so forth, but the reality is that we must choose priorities. One thing that disappoints me about the Conservatives, some of whom I know can add up, is that they make more and more spending demands without telling us where that money would come from.

James Kelly

Will the member take an intervention?

John Mason

No. I would like to make a few points first; I might come back to Mr Kelly later.

In the short term, as well as helping young people and their families to save money, the bus passes plan will allow young people to travel more and might assist those young people who have been unable to afford to travel at all. In addition, I hope that, in the longer term, it will get young people into the habit of using public transport, which can only be a good thing as we seek to reverse the decline in bus usage, especially in Glasgow and the west of Scotland.

Secondly, I particularly welcome the £3.4 billion in social security assistance. The Scottish child payment, which is due to start by December, could help 170,000 children under the age of six and eventually 410,000 in all, lifting some 30,000 out of poverty. The Glasgow Centre for Population Health reckons that about one third of children, or 37,000 in Glasgow, live in poverty; in some neighbourhoods, that rises to 41 per cent. Such measures are therefore extremely welcome.

Next, I was very impressed by Bruce Crawford’s speech last week—his speech today was also okay—on the need for reserves. That formed part of the Finance and Constitution Committee’s budget report, but Mr Crawford emphasised it, and rightly so. As I understand it, councils have a target for reserves of 2 per cent, although some may be below that. For example, I understand that Glasgow has 1.6 per cent in reserves. Given our budget of £40 billion, 2 per cent in reserves is £800 million.

In one sense, that is not a huge figure given the risks that we face. On the other hand, if we had £800 million in reserves when health, the police and local government all need money, some people would feel that that was too much as we could be spending that money on vital services. We need to have that debate and ideally we would have cross-party agreement on the principle of holding reserves, and at least rough agreement on the figure required.

Another point that came up in last week’s debate was preventative spend. That was mentioned by Sarah Boyack, and was mentioned again yesterday at the Finance and Constitution Committee by Alex Rowley with regard to the Christie commission recommendations. If I am not mistaken, all parties agree on the principle of preventative spending, which is that we spend earlier in any process in order to prevent bad things happening later on, whether that be children growing up in ill health or young adults ending up in prison.

If we were in a time of growing budgets, we could use the extra money to invest in new preventative spend while carrying on with reactive spending for a period. However, in a time of tight budgets such as the present one, we would need to cut reactive spend first and disinvest in order to finance more preventative spending. That could mean cutting new prisons to keep young people out of trouble, or cutting hospital budgets to put more into primary care. We should be having the debate, but I fear that Opposition parties would be quick to criticise if reactive spending were to be cut and short-term problems arose.

Another issue that appeared in the committee report, to which the Government responded this week, was European Union funding. That might not be part of the Scottish budget per se, but it has been a vital part of our nation’s overall spending of both revenue and capital nature, affecting the public, private and third sectors. The committee report mentioned the common agricultural policy, structural fund support, common fisheries policy funding, research and innovation funding and loans from the European Investment Bank.

Those are crucial issues, which have been discussed by the Economy, Energy and Fair Work Committee, the Finance and Constitution Committee and the Rural Economy and Connectivity Committee, not to mention the cross-party group on industrial communities, which is ably chaired by Colin Beattie. Yesterday, the cabinet secretary made it clear at the committee that we are making slow progress, if any, on this topic. She hopes that there will be clarity in the Westminster budget next Wednesday, and I certainly hope that there is. Our farmers, older industrial communities and many others really need to know as soon as possible whether there will be replacement funding, how much, and how that will happen.

Whatever happens, we have to live within our means. There will always be areas on which we want to spend more money. We are a democracy and we can only raise the amount of tax that people are willing to pay; that, in turn, limits what we can spend. Allocating that money between needs will never be easy. However, we have a reasonable budget before us today and I hope that all parties will support it.

16:33  



Andy Wightman (Lothian) (Green)

As in previous years, parties have to make a choice to develop proposals, to cost them, to negotiate and to come away with some wins. I do not know how much effort was made by each of the Opposition parties but, before they criticise us, they could review their own approaches because they do not appear to be leading anywhere.

Opposing the budget means reverting to last year’s budget, and the Greens do not find that acceptable. That is why I find the Conservatives’ approach disappointing. Like those of many of his colleagues, Liam Kerr’s contribution was out of tune with the challenges, which were well set out by Alex Neil.

It was also disappointing to hear Colin Beattie rehearse long-outdated ideas about what road improvements actually achieve. Congestion will be increased by 5 per cent by the proposed Sheriffhall works. Congestion is tackled by taking vehicles off the road, which is why free public transport is so important.

Therefore, the Greens are pleased to have achieved a budget deal that reverses many cuts that were proposed by councils and secures concessionary travel for young people and investment in public transport. In a Parliament in which no one party has a majority, a coalition has to be built to secure such support.

Neil Findlay

Will the member take an intervention?

Andy Wightman

I am happy to do so briefly.

Neil Findlay

Based on Mr Wightman’s contribution so far, he is making the argument that, if Labour votes against the budget, we are voting against the whole budget and all the good things that are in it. If we take that argument a step further, if Mr Wightman votes for this budget, he is voting for roads expansion and all the negativity that comes from it.

Andy Wightman

Budgets are always finely judged. I accept that voting for a budget en bloc does not mean that we support everything in it, just as voting against a budget does not mean that one supports nothing in it. My point is that we have a Parliament of minorities and we have responsibilities to try to achieve a budget that has broad support. I think that we have done so. We have filled the £95 million hole that was identified by COSLA and we continue to implement the longer-term measures to improve the local government finances that were agreed last year.

I sit with Willie Rennie and Rhoda Grant in the cross-party talks that we secured, and I genuinely hope that if we make the requisite efforts in those talks, we will be able to reach agreement with the Government on scrapping the council tax. However, whether we do so will depend on our own efforts.

Parliament has instigated a new approach to budget scrutiny, which is very welcome. However, as I mentioned last year, and as Kate Forbes mentioned in her opening speech, we need a more strategic approach. Last year, I suggested that we might do better and that the Cabinet Secretary for Finance could convene roundtable talks in September, to be followed by more detailed discussion and negotiation. Building on that progress and trust, parties could then enter into detailed negotiations that would lead to the budget bill. That approach might even involve parties submitting their own proposals to the Finance and Constitution Committee. In other words, there are a lot of things that we could do to make a Parliament that is composed of different parties, such as it is at the moment, work much better.

This is not the budget that a Green Government would have delivered, but it is a better budget than was originally presented by the Government. We will be pleased to support it tonight.

The Deputy Presiding Officer

We move now to the closing speeches. It is disappointing to note that not all members who took part in the debate are here as they should be.

16:37  



James Kelly (Glasgow) (Lab)

We are at the final stage of the budget process. I have no doubt that Kate Forbes is glad to be nearing the finish line, having picked up the reins of the budget process in very difficult circumstances.

Bruce Crawford made some interesting points about the budget process that should be taken seriously. They should certainly be taken seriously by the Government, which was criticised by the Fraser of Allander institute over transparency and the amount of information that it put in the public domain to facilitate budget discussions.

It is time that the Government started to be more open about the process. When the budget was published, we heard that there was no money left—all the coffers had been emptied and every penny had been spent. Kate Forbes might be new to the job, but, as with previous cabinet secretaries going back to John Swinney, lo and behold, there was a change in the forecast and new assumptions. As a result, hey presto, £173 million was found down the back of the sofa. [Interruption.] In the Scottish Parliament’s version of groundhog day, the Greens then suddenly appeared and said that they would support the budget after all. If we are really serious about having a proper and transparent budget process, then the Government must let us know at the point at which the budget is published what money is available and not change the amount half way through.

Rhoda Grant and Claudia Beamish made very strong points about cuts to council services. The fact is that, in real terms, there have been £898 million-worth of cuts since 2013, and £205 million-worth this year. That shows that, at the heart of this Government, there is a policy of penalising local councils. It is not only about the figures; we just need to look at the analysis—

Tom Arthur (Renfrewshire South) (SNP)

The member referred to 2013. Can he indicate what other budget lines he would have cut, as he puts it, instead of local government—for example, health, or measures to mitigate Tory welfare reforms? What would Labour have done differently over the past seven years?

James Kelly

For a start, people such as Tom Arthur and I should be paying more tax.

As I was going to say, if we look at the analysis in The Herald on Sunday, we see cuts to library services. Some councils will have to close libraries. Meanwhile, MSPs and Government ministers will, this year, actually pay less in income tax. That is totally unfair. [Interruption.] It is not nonsense. Members should look at the analysis by the Scottish Parliament Information Centre. It is totally unfair—

Alex Neil

Will the member take an intervention?

James Kelly

No, I will not take an intervention at this point. Mr Neil should read the SPICe blog.

As The Herald on Sunday also pointed out, support for children with additional needs will have to be cut in a number of council areas. That is totally unacceptable. We face a situation where, all across the country, local councils will have to make cuts. When will SNP MSPs start standing up for the communities that they were sent to the Parliament to represent?

Stuart McMillan

Will the member take an intervention?

James Kelly

No, thank you.

Some of those MSPs will not even be standing for re-election next year, so they do not have to worry about reselection. For once, they should discover a backbone and stand up for their constituents. At 5 o’clock, Scottish Labour will oppose the budget, because of its inherent unfairness.

Government ministers, in the Holyrood bubble, in their chauffeur-driven cars—both Mr Neil and Mr Crawford have been there—who will not be paying the same amount of income tax, cumulatively over the year, should compare their situation with that of single parents in communities across Scotland who will be paying 4.84 per cent more in council tax this year. If that single parent wants to send their kid to a library, the service might be cut or it might be closed. If their kid needs additional support, that will be cut as well.

There is an inherent unfairness at the core of this budget. For that reason, Labour will oppose it at 5 o’clock.

16:43  



Murdo Fraser (Mid Scotland and Fife) (Con)

The debate is our third in a week on the budget and related matters. The Cabinet Secretary for Finance, and Opposition spokespeople need a stamina award for the effort that they have put in.

It is always a challenge to find new issues to raise at this stage, but I want to sum up a number of points that members have made.

It is worth reiterating that the backdrop to the budget is a 3.7 per cent real-terms increase in the resource budget that is available to the Scottish Government, thanks to increases in spending at Westminster. That translates into around an extra £1.6 billion in real, hard cash at the Scottish Government’s disposal. However, one consequence of the budget decisions that have been taken by the Scottish Government—backed up by the Greens, as we know—is that we are still seeing real cuts to local council services across Scotland. Graham Simpson and James Kelly have made that point.

Keith Brown (Clackmannanshire and Dunblane) (SNP)

Will the member take an intervention?

Murdo Fraser

I want to finish my point.

We have only to pick up local newspapers to see that councils across the country are having to reduce services. They are having to look at reducing teacher numbers; to look, as Fife Council is doing, at potentially reducing the length of the school week; to look at laying off school crossing patrollers, as Perth and Kinross Council is having to do; and to look at reducing the opening hours of libraries and leisure centres. That is the consequence of the deal that has been struck between the SNP and the Greens. Mark Ruskell lives in a parallel universe if he does not recognise that that is what is happening across Scotland.

Keith Brown

Murdo Fraser and a number of his colleagues have expressed concern about local authority budgets. Given that, will he condemn the huge increase in the cost of Public Works Loan Board borrowing that applies to all councils, because of what the UK Government believes is spendthrift behaviour by some English local authorities? It is an easy thing to do—will he condemn it?

Murdo Fraser

Mr Brown has not been listening—an extra £1.6 billion is coming to this Scottish Government. That more than compensates for any increase in the Public Works Loan Board interest rate.

The centrepiece of the Greens’ budget deal is a supposed commitment to free bus travel for the under-19s. We know that that is no commitment at all. It is an allocation of only some £15 million towards an estimated annual cost of £80 million, and it will be introduced in January of next year only “if possible”. We know that there has been no consultation with bus companies and no consultation with local authorities, and that no thought has been given to the impact on the school transport that is currently provided and funded by local authorities. Whether it will ever be delivered as a policy remains to be seen; however, given the lack of any serious, rigorous work in preparation, it would be a reasonable bet that it never sees the light of day.

A lot has been said in the debate about the question of uncertainty due to the UK budget being in March, after the Scottish budget. I gently remind members that there is nothing novel about that. Historically, UK budgets were always delivered in March; only for the past two years has there been a shift, with the UK budget being moved to November. Indeed, the current fiscal framework—which was agreed by the Scottish Government—was negotiated on the basis, and based on the assumption, that budgets would be in March. Historically, Scottish Governments would produce their budgets in September of the previous year. As such, we need to hear a little less faux outrage from the SNP benches about uncertainty being caused by the timing of the budget, because, historically, that was always the case.

On the question of process, Donald Cameron and a number of members reminded us about the issue that we raise in budget debates every year. When the finance secretary produced her budget on 6 February, she was very clear that all the money had been allocated. She told Parliament:

“In allocating those resources, we have used every fiscal lever that we have to the fullest extent. Every penny is accounted for”.—[Official Report, 6 February 2020; c 76.]

As we pointed out at the time, that was familiar rhetoric, because it was exactly the same language that was deployed by her predecessor as finance secretary. However, over the years, he was able to find substantial extra funds down the back of the sofa. True to form, the new finance secretary has pulled off exactly the same trick, producing £173 million from thin air in order to sweeten her deal with the Greens. It would substantially aid transparency and assist budget negotiations if the full extent of the resources available to the finance secretary was made clear at the time that the budget was presented to Parliament. Donald Cameron made that point earlier, and it is a serious one.

Of the additional sums that have been found, £50 million has come from a reprofiling of non-domestic rates income over the period 2020 to 2023. Although it does not like the term, that means that the Scottish Government is, in effect, borrowing against future income from business rates in order to increase its budget in this year. Given that next year, due to an overforecast of income tax receipts, we face an estimated black hole of some £555 million before we even start, I question the prudence of dipping into income for future years at this point. Presumably, the Scottish Government is once again relying upon a Boris bailout to fill that gap, just as it has done in this year.

Bruce Crawford

In that case, will Murdo Fraser explain why so many speakers from the Conservative benches, in speech after speech, asked for additional spending upon additional spending, which would only add to the risk to the Scottish budget in future? The Tories have really lost their way on this one.

Murdo Fraser

If Mr Crawford had been paying attention during all the budget debates that we have had in the past week and the previous years, he would know that, if we could match Scottish economic growth even to the UK average, we would have billions of pounds extra to spend on Scottish public services and we would not have to increase taxation. Mr Crawford should know that.

My final point about the budget is that Scotland’s entire fiscal position is underpinned by the union dividend—a fiscal transfer that is now worth almost £2,000 for each man, woman and child in Scotland. Without that fiscal transfer, we would have none of the additional spending that is being announced today. Without that support, Scotland’s notional deficit stands at some £12 billion. Yesterday, during the debate on the rate resolution, the Minister for Public Finance and Migration, Mr Macpherson, let the cat out of the bag when he confirmed that a loss of £12 billion from the Scottish budget would be, in his words, “catastrophic”. There we have it from a minister in the SNP Government: independence for Scotland would be catastrophic for the public finances of Scotland and for the public services that its people enjoy. I could not put it in better terms myself.

For that reason, and all the other reasons that we have outlined, Parliament should reject the budget this afternoon.

16:50  



Kate Forbes

The debate has once again allowed Parliament to reflect on the 2020-21 budget. I am sure that it will not be for the last time, not least because our decisions in the budget will, in my opinion, have a hugely positive benefit and will make a difference to people in our communities.

The budget provides investment of around £645 million in the revolutionary expansion of early learning and childcare, which is improving the life chances of our children; £220 million of fresh seed funding for the Scottish national investment bank, with its mission to drive the transition to a net zero economy; increased investment in health and care services by more than £1 billion, taking total spend on the health service to £15 billion for the first time; funding to establish the game-changing Scottish child payment, which, when fully rolled out in 2022, will help an estimated 30,000 children out of poverty; and £1.8 billion of investment in low-emission infrastructure, including a package of more than £500 million of investment that is specifically designed to increase our efforts to respond to the global climate emergency.

All that sits alongside a progressive income tax system, with 56 per cent of income tax payers in Scotland paying less than they would if they lived elsewhere in the UK, while we are raising the revenue that is needed to support investment in the Scottish economy and our public services. To vote against the budget tonight is to vote against all of it. It is to vote against more than £1.4 billion towards tackling poverty, a cash increase of £589 million to local authorities and a £60 million uplift to the police.

Liam Kerr

Why will the SNP Government not hand over the full £96 million in Barnett consequentials to the police?

Kate Forbes

Why will the UK Government not hand over the VAT payments that it has not returned to the police service?

Most of the other parties have criticised the budget because it does not spend vastly bigger sums of money on the particular areas of their choosing, but they have not had the courage to identify what they would deprioritise in order to do that. The truth is that, despite the uncertainty and the risks of producing our budget before the UK Government’s budget, and despite a decade of Tory-imposed austerity, we have set a balanced budget that prioritises investing in the economy, tackling climate change, reducing poverty and delivering certainty for taxpayers.

We are doing that within a fiscal framework in which the UK Government will claw back more than £200 million this year and more than double that next year because of forecast error in independently determined forecasts. The UK Government is doing that while keeping one of our hands tied behind our back, because borrowing powers to deal with forecast error are limited to £300 million. That demonstrates why we need an urgent review of the fiscal framework to allow us to respond properly to the volatilities and uncertainties that we face.

We have taken a prudent approach to the budget and have made wise assumptions to deliver a balanced budget and give ratepayers and public services the certainties that they need. We have tried to spread the risk and spread our exposure to the promises that the UK made in the December election campaign.

Murdo Fraser said that we have gone before UK Government budgets in the past, but the fiscal framework envisaged that block grant adjustments for the next financial year would be based on forecasts in the autumn statement, before the Scottish Government budget in December. No UK autumn statement has been published, so the Scottish budget has had to be based on provisional BGAs rather than on new, up-to-date Office for Budget Responsibility forecasts. That has inevitably increased uncertainty around the Scottish budget. If the chamber is agreed on how important the budget is, surely we can all be equally amazed and astounded that the only assurances that the UK Government could give the Scottish Government on the block grant was to refer us to estimates from March 2019—a year ago—and to its election manifesto. The consequences of the UK Government not delivering on its promises could have serious repercussions. We will hold the Tory Government to account for the promises that it made.

Labour’s position on the budget is somewhat wearying. It called for a climate change budget, and we have delivered that, but still it moans. It talked about inequality, and we are investing £1.4 billion in tackling poverty, including the first child payments later this year, but I did not hear a single comment on that from Rhoda Grant. Labour called for an extension of free bus travel to young people, but when that is delivered, it is not good enough. If the Labour Party votes against the budget at decision time, it will be voting against £15 million to extend free bus travel, £21 million for the Scottish child payment, continued investment in the Scottish child poverty fund and increases in the Scottish welfare fund. It cannot claim to champion the many and not the few while voting against those increases.

This year, through negotiations, the Greens have delivered something. They have made changes and they have left a mark and a legacy. All the parents who have been in touch with me in the past week to talk about the difference that extending free bus travel will make to them and their families appreciate that. As for the Lib Dems, Willie Rennie talked about certain inevitabilities, but what appears inevitable is that the Lib Dems never achieve any of their asks, because they set up absurd constitutional red lines.

Patrick Harvie

I am sorry to have to correct the cabinet secretary, but the one time that the budget fell, the Liberal Democrats achieved the astonishing consequence of voting for exactly the same budget without a single amendment in exchange for two letters written by the Scottish Government. That was their budget price—two postage stamps. Was that not impressive?

Kate Forbes

That was hugely impressive, and I am glad that I allowed that intervention.

Bruce Crawford talked about the importance of being honest and up front about the inherent risks in the fiscal framework and making prudent judgments on tackling those economic challenges. It is one thing for Opposition parties to call for greater spending—that is easy. The real test is how they take responsibility for the economic challenges that we face.

I enjoyed listening to a number of speakers who made excellent points, including Alex Neil and John Mason.

I am proud to present the budget tonight, which delivers for our communities and businesses, despite the uncertainties about our block grant and the decade of Tory austerity that we are contending with. Murdo Fraser talked about exactly how much he thinks is coming to the Scottish Government next week from the UK Government. We will hold the Tories to account for that. We will hold them to their promise of ending austerity and their election promise of levelling up spending. We will hold them to that, because they have not just subjected the Scottish budget to unacceptable levels of uncertainty; they have subjected all our public services, taxpayers and businesses to that uncertainty. Despite that, we have provided certainty and ensured that this budget delivers for all Scotland. This budget ensures that we are tackling climate change and poverty and I am proud to commend it to the Parliament.

Final vote on the Bill

After the final discussion of the Bill, MSPs vote on whether they think it should become law.

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Final vote transcript

The Presiding Officer (Ken Macintosh)

There are two questions to be put as a result of today’s business. The first question is, that motion S5M-21113, in the name of Kate Forbes, on the Budget (Scotland) (No 4) Bill, be agreed to. Are we agreed?

Members: No.

The Presiding Officer

There will be a division.

For

Yousaf, Humza (Glasgow Pollok) (SNP)
Wightman, Andy (Lothian) (Green)
White, Sandra (Glasgow Kelvin) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Sturgeon, Nicola (Glasgow Southside) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Robison, Shona (Dundee City East) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McAlpine, Joan (South Scotland) (SNP)
Matheson, Michael (Falkirk West) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
Lochhead, Richard (Moray) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Johnstone, Alison (Lothian) (Green)
Hyslop, Fiona (Linlithgow) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Harvie, Patrick (Glasgow) (Green)
Harper, Emma (South Scotland) (SNP)
Greer, Ross (West Scotland) (Green)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dey, Graeme (Angus South) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Crawford, Bruce (Stirling) (SNP)
Constance, Angela (Almond Valley) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Adam, George (Paisley) (SNP)

Against

Wishart, Beatrice (Shetland Islands) (LD)
Whittle, Brian (South Scotland) (Con)
Wells, Annie (Glasgow) (Con)
Tomkins, Adam (Glasgow) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smith, Elaine (Central Scotland) (Lab)
Simpson, Graham (Central Scotland) (Con)
Sarwar, Anas (Glasgow) (Lab)
Rumbles, Mike (North East Scotland) (LD)
Rowley, Alex (Mid Scotland and Fife) (Lab)
Rennie, Willie (North East Fife) (LD)
Mountain, Edward (Highlands and Islands) (Con)
Mitchell, Margaret (Central Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
McArthur, Liam (Orkney Islands) (LD)
Mason, Tom (North East Scotland) (Con)
Macdonald, Lewis (North East Scotland) (Lab)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lindhurst, Gordon (Lothian) (Con)
Leonard, Richard (Central Scotland) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lamont, Johann (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kelly, James (Glasgow) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnson, Daniel (Edinburgh Southern) (Lab)
Harris, Alison (Central Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Griffin, Mark (Central Scotland) (Lab)
Greene, Jamie (West Scotland) (Con)
Gray, Iain (East Lothian) (Lab)
Grant, Rhoda (Highlands and Islands) (Lab)
Golden, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Findlay, Neil (Lothian) (Lab)
Fee, Mary (West Scotland) (Lab)
Davidson, Ruth (Edinburgh Central) (Con)
Corry, Maurice (West Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Carson, Finlay (Galloway and West Dumfries) (Con)
Carlaw, Jackson (Eastwood) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Briggs, Miles (Lothian) (Con)
Boyack, Sarah (Lothian) (Lab)
Bowman, Bill (North East Scotland) (Con)
Bibby, Neil (West Scotland) (Lab)
Beamish, Claudia (South Scotland) (Lab)
Ballantyne, Michelle (South Scotland) (Con)
Balfour, Jeremy (Lothian) (Con)
Baker, Claire (Mid Scotland and Fife) (Lab)
Baillie, Jackie (Dumbarton) (Lab)

The Presiding Officer

The result of the division is: For 63, Against 55, Abstentions 0.

Motion agreed to,

That the Parliament agrees that the Budget (Scotland) (No 4) Bill be passed.

The Presiding Officer

The second question is, that motion S5M-21136 in the name of Graeme Dey, on a committee substitution, be agreed to.

Motion agreed to,

That the Parliament agrees that Ruth Maguire be appointed to replace Richard Lyle as the Scottish National Party substitute on the Environment, Climate Change and Land Reform Committee.

Meeting closed at 17:01.  



Scottish rate resolution

Before considering the Bill at Stage 3, the Parliament debated and agreed to a motion about income tax.

It was agreed to charge income tax on some non-savings and non-dividend income of a Scottish taxpayer in tax year 2020/21.

Budget (Scotland) (No.4) Bill [Session 5] as passed

An "as passed" version of the Bill was not produced because no amendments were made at Stage 3.

This Bill was passed on 5 March 2020 and became law on 18 March 2020
Find the Budget (Scotland) (No.4) Act 2020 on legislation.gov.uk

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