IT was, finance minister John Swinney said, an “alternative” budget. Presenting the draft budget to MSPs in Holyrood yesterday, Swinney said he had be given a “challenge and a choice”.
“Scotland can accept the Tory cuts, or we can rise to the challenge and choose a Scottish alternative to austerity,” he said. “We choose to rise to the challenge. We choose the Scottish alternative. We choose to put reform and growth at the heart of this budget.”
Much of what was in the draft budget had been trailed beforehand. The council tax freeze remained in place for the ninth year and policing, health and education budgets were protected.
The losers in this budget are Scotland’s 32 local authorities who, in the short term, see substantial cuts. COSLA, the umbrella group for Scotland’s local council said the plans would amount to a loss of £350 million between them. The “non-protected” departments also see significant cuts with culture and external affairs in particular seeing a £16m drop.
It was the first year of Holyrood setting the rate of Scottish Income tax. Swinney said it would be fixed at 10p, effectively meaning it will stay the same as it is.
This “dual freeze” on the two taxes would, the deputy first minister said, help, “families week in, week out the length and breadth of Scotland”.
He then promised to set out the SNP’s longer-term intentions on income tax before the end of March, ahead of the next Scottish Parliament elections.
This would also be the time for Scottish Government ministers to lay out plans for reforming the council tax. Unexpectedly there was also a promise to consult with local authorities on the possibility of sharing revenues raised through income tax directly with the councils.
Swinney’s replacement for Stamp Duty, the land and buildings transaction tax, will also come into force this year. It would remain roughly the same for most transactions with the exception of second homes or buy-to-let properties where homes worth more than £40,000 will be charged more than 3 per cent of the value.
Criticising the Tory Government, Swinney said: “By 2020 our budget will be 12.5 per cent lower in real terms than when the Conservatives came to power.
“This is the equivalent of one pound in every eight we spend being cut by Westminster by 2020.”
On health the Government would be “radically reforming the way that social care is paid for” by allocating £250m from the health service into social care in 2016-17.
This said Swinney would “build the capacity of community-based services and enact the most significant reform in health and care since the creation of the national health service.”
Scotland’s health budget will be nearly £13 billion next year, a jump of 6.5 per cent than this year.
The finance secretary warned that the NHS needed more than just additional money:”To be blunt, if all we do is fund our NHS to deliver more of the same, it will not cope with the pressures it faces.
“To really protect our NHS, we need to do more than just give it extra money – we need to use that money to deliver fundamental reform and change the way our NHS delivers care.
“That is why the reforms that this additional investment will support are just as important – perhaps more so – than the scale of it.”
There would be an extra £45m for improving primary care services next year, and £200m to be invested in six new specialist treatment centres.
As announced by First Minister Nicola Sturgeon during her speech at SNP conference in October, these centres would carry out procedures such as hip and knee replacements and cataract operations to try and take pressure of accident and emergency.
Police Scotland’s funding would be protected, with an extra £55m pledged for next year.
There would also be an extra £4m to help council areas affected by the flooding caused by Storm Desmond. There was also a promise to a review of the non-domestic rates system in Scotland.
In education there was to be a protection of college funding and the Government’s commitment to free tuition.
Although money for research was protected the university teaching budget will drop from £1.062bn to £1.027bn while college funding will stay at £530m.
Draft budget at a glance
- Scottish rate of income tax set at 10p
- Council tax frozen for ninth year in a row
- Land and Buildings Transaction tax rise on second homes and buy-to-let - 3 per cent supplement on property of more than £40,000
- Free childcare for three and four year olds to be increased to 1,140 hours per year
- £500m additional spending for NHS - total of £13bn for 2016/17
- £250m allocated to social work from the health budget.
- £200m for six new treatment centres, specialising in acute ops over next five years.
- £60m increase in affordable housing budget
- £4bn for infrastructure projects over the next year including work on Aberdeen’s notorious Haudagain roundabout and Ayrshire’s Dalry bypass
- £55m for policing budgets.
- £1bn to protect free tuition pledge and college funding
- £4m for flood protection
- Review of business rates system
'He has chosen not to use the key to his cell’: Swinney's budget gets mixed reviews
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