Scottish Budget 2021-22

Significant new investment to drive economic recovery, bolster public services and support families underpins the Scottish Government’s spending and taxation plans for the coming year.

Presenting the Scottish Budget 2021-22, Finance Secretary Kate Forbes today announced support for jobs and skills totalling around £1.1 billion.

Job creation is a priority, with measures including a commitment to launch a new Green Workforce Academy to help people secure work in the low carbon economy, a £100 million Green Jobs Fund over the next parliament, £7 million towards making Scotland a world class hub for digital business and an additional £115 million for the Young Person’s Guarantee.

Health receives record funding of over £16 billion, an increase of 5.3% on 2020-21, along with a further £869 million to continue tackling coronavirus (COVID-19), including funding for the vaccination and test and trace programmes. This means that, over the course of this parliament, investment in health has increased by £1.8 billion in real terms - more than tripling the commitment to increase health funding by £500 million more than inflation.

To support family budgets, £90 million is being made available for local authorities to freeze council tax.

Public sector workers earning up to £25,000 can receive at least a 3% pay increase via a £750 cash underpin, while there is a 1% rise for those earning above that amount, capped at £800 above £80,000.

The budget also proposes:

• £11.6 billion for local government, which represents a £335.6 million increase in core revenue funding, including the £90 million to compensate local authorities which choose to freeze Council Tax, plus £259 million in one-off funding

• £1.9 billion for primary health care to help deliver more services in the community. A further £550 million is earmarked to build new Elective Care Centres and the Baird Family Hospital and Anchor Centre in Aberdeen

• £98.2 million to improve Scotland’s digital infrastructure and deliver access to high quality broadband and mobile coverage.

• £711.6 million for affordable housing and £68 million for the first full year of the Scottish Child Payment, tackling child poverty

• a new £55 million programme to support town centres and community-led regeneration projects

• more than £3.1 billion in resource and capital investment for education and skills, and £567 million to provide 1,140 hours of early learning and childcare, supporting implementation of the UK’s most ambitious childcare programme

• £1.3 billion for the Scottish Police Authority, including a £60 million increase in Police Scotland’s revenue budget – exceeding an earlier pledge of a £100 million boost over five years

• £1.6 billion for rail and bus services and £100.5 million for active travel to consolidate changes to healthy, green travel options seen during the pandemic

• doubling the Rural Tourism Infrastructure Fund, helping tourist attractions and local communities make improvements to cope with increased visitors

• an additional £27 million to expand woodland creation and the associated infrastructure, supporting green jobs

Business support remains a priority and the Finance Secretary confirmed that the Local Authority Discretionary Fund will be doubled to £60 million in this financial year to allow councils to respond to local needs. In addition, businesses eligible for the Strategic Framework Business Fund will receive full Level 4 payments on 22 February, regardless of any future changes to local restrictions.

The Scottish Government will also increase a scheme which compensates councils for the loss of income from sales, fees and charges due to the pandemic from £90 million to £200 million in 2020-21.

Ms Forbes said:

“This budget is being delivered in exceptional circumstances as we continue to battle a pandemic that has shaken our society and economy to the core, and as we face the harmful impacts of Brexit.

“It promotes innovation and reform, new beginnings, new directions. And while it continues to target support in the immediate term, it also tracks a course over the next year to build a fairer, stronger and greener country.

“To help drive our green economic recovery I am providing the stability and certainty that businesses have asked for through the most competitive reliefs packages in the UK. There are innovative measures to promote sustainable growth and we are investing more than £1 billion in jobs and training.

“The budget sets out a distinctive Scottish pay policy that again supports the lowest paid, charting a different course to the ill-judged pay freeze announced by the UK Government. It also bolsters our health service, delivers more affordable homes, provides additional childcare places and helps young people into work.

“Throughout these dark times we have never given up hope. This budget seeks to build on that hope and, by focusing on how we rebuild and renew our country, make the light at the end of the tunnel shine that bit brighter.”

Background

The Scottish Budget 2021-22 document is available online.

Full details of the budget are available at www.gov.scot/budget