Scottish Budget proposes record NHS spending and efforts to boost economy

Scotland’s Finance Secretary announced record NHS funding of £16 billion and promised local authorities cash to freeze council tax as part of a Budget aimed at dealing with the impact of the Covid-19 pandemic.

Kate Forbes said her tax and spending plans for the coming year are part of an “exceptional response” to the “exceptional circumstances” the country is facing.

She said the pandemic has “shaken our society and economy to their core”, and her draft budget for 2021-22 aims to bring much-needed stability to ensure “our economy recovers and we protect those who have been hit the hardest”.

But opposition MSPs questioned whether sufficient cash is being allocated to Scotland’s local authorities.

Scottish Conservative finance spokesman Murdo Fraser said councils have been “underfunded” for years, while Scottish Labour interim leader Jackie Baillie said spending on local government “falls short of what is required”.

Labour also pressed the Scottish Government to increase pay for care workers to £15 a hour, with Ms Baillie urging: “Surely they deserve more than the living wage, surely they finally deserve to be properly valued and recognised by society?”

Ms Forbes, who has to win support for her Budget from at least one other party if it is to be approved at Holyrood, set out her tax and spending plans ahead of the UK Government’s March Budget.

The draft Scottish Budget will see the health service receive more than £16 billion – with this figure including money to support the ongoing response to coronavirus as well as £145.3 million to tackle drugs and alcohol.

There will also be £1.1 billion for mental health services – a figure Scottish Liberal Democrat leader Willie Rennie insisted is not enough.

He said: “The mental health budget falls short of the funds it needs, especially following the massive impact on our mental health from the pandemic.

“We had called for £1.2 billion and that was before the pandemic. This budget falls £100 million short.”

Ms Forbes promised councils will receive a total funding package amounting to £11.6 billion for 2021-22.

The Finance Secretary promised £90 million so local authorities do not have to increase council tax – describing this as a significant step providing “financial reassurance to families who are struggling”.

On income tax, Ms Forbes pledged the amount at which people start to pay the starter, basic and higher bands will all rise by inflation – although the starting point for the top rate will be frozen at £150,000.

“This will see all Scottish taxpayers pay slightly less income tax next year than they will this year based on their current income,” she said.

“In addition to this, a majority will continue to pay less income tax than if they lived in other parts of the UK.”

Ms Forbes went on to promise £2.7 billion for education and skills, as well as extra funding to “help deal with the backlog in criminal justice caseloads caused by the pandemic”.

Her draft Budget also contains more than £800 million for housing – most of which will go to help build more affordable homes.

With more people working from home, she promised to invest £98.2 million in improving digital connectivity – in part to provide better mobile coverage on the 4G and 5G networks.

Meanwhile, she said the Scottish Government will take the “unprecedented” step of reducing the business rates poundage to 49p – making this the lowest rate in the UK.

Ms Forbes said the 100% business rates relief the retail, hospitality and leisure sector have benefited from during the pandemic will continue for the first three months of 2021, and may be extended further if more funding is made available by Westminster.

Mr Fraser said the scheme needs to continue for 12 months, insisting the Scottish Government already has the cash to make this happen.

The Finance Secretary said Scotland has been through “dark times” as a result of coronavirus, but stressed: “We have never given up hope. Hope for a better future, for a healthier, greener, fairer society.

“This Budget seeks to build on that hope, and by focusing on how we continue to protect, recover, rebuild and renew our country, it seeks to make that light at the end of the tunnel shine that bit brighter.”

But Scottish Greens co-leader Patrick Harvie insisted the plans do not provide for the “green recovery” needed from the pandemic.

He said: “Even before Covid, Scotland was on track to miss targets on child poverty and climate emissions. This Budget simply doesn’t address that, and refuses to consider progressive taxation.

“This is the year a new American president will come to the climate summit in Glasgow with ambitious plans to invest in a low-carbon future and create jobs. Scotland needs to at least match that level of ambition if we want to be taken seriously.”