Councils have received a last-minute boost of £100m, the Deputy First Minister has announced.
Speaking in the stage three debate on the Budget (Scotland) Bill, John Swinney revealed the Scottish Government had received £146m from the UK Government and said part of it would be spent on funding a pay deal for non-teaching staff.
The windfall came from a £125m boost in Barnett consequentials and £21m from a forecasting error.
Councils had hit out at the Scottish Government after the publication of the draft budget, claiming the real terms increase of £570m touted at the beginning of the process could actually be as low as £71m when ring-fenced government initiatives were accounted for.
The new funding represented a 3% real terms increase in council funding based on last year’s budget document, Swinney said.
“I’m committing to provide local government with an additional £100m to support local authorities and their expenditure,” he stated.
“This funding is designed to assist councils in making a meaningful 2023-24 pay offer for non-teaching staff, recognising the critical role that those staff play in delivering frontline services.”
Swinney added he hoped the funding would result in a “swift agreement” being reached with staff, which would avoid the scenes of last summer, when refuse workers walked out leaving rubbish piling up in the streets during the Edinburgh Festival Fringe.
Taken with the £156m announced last week as part of the pay offer from government to teachers - an offer that was summarily rejected by the biggest teaching union - Swinney said the uplift resulted in local authorities being given £793m more in real terms compared to last year.
“As a result of the decisions in this budget, the total funding available to councils to support local services will be nearly £13.5bn, plus the revenues from any local decisions on council tax,” he told MSPs.
“This is equivalent to a 3% real terms increase compared to the 2022-23 budget Bill.”
Swinney’s appraisal does not take into account in-year uplifts to council budgets.
When asked where the funding for the teacher pay offer - £33m from this year’s budget and the rest from next year’s - had come from by Tory MSP Stephen Kerr, the Deputy First Minister said he had “forced” ministers to “take hard decisions” to save funds.
He added that he hoped there would be “no mucking about” from opposition parties and they would support the passage of the budget.
The Deputy First Minister had previously said he faced a £100m funding gap in this year’s budget that would have to be closed, but he told MSPs on Tuesday he was confident he could balance the budget by the end of the financial year.
An extra £6.6m will be given to Creative Scotland, Swinney announced, to ensure the agency did not have to rely on Lottery funding.
The budget will increase taxes on higher and middle earners, with all Scots earning more than £43,662 facing a rise in income tax to provide extra funding for the NHS.
Swinney previously urged MSPs to back the government’s proposals, which he said provided resources “where they are needed most”.
Scottish Conservative finance spokeswoman Liz Smith said it was important to focus on the highest earners as well as those most in need, if the economy is to grow.
She told MSPs: “We have to make sure we are also helping those that are at the very productive end of Scotland and who want to come and live and work and invest in Scotland, because that is as important as looking after our vulnerable communities.”
Scottish Labour’s Daniel Johnson highlighted the SNP’s leadership race, saying the new leader would inevitably make changes to the budget.
“This is not a budget that will last - I don’t see any of the leadership candidates, once elected, leaving the budget well alone.”
The increased funding for Creative Scotland is the “first victory” of Ash Regan’s campaign, he said.
Scottish Liberal Democrat leader Alex Cole-Hamilton said the budget is “just not good enough”.
He called for the National Care Service Bill to be abandoned, saying: “I was pleased to see at least one of the SNP leadership contenders has recognised that the Bill must be halted.
“I suspect the others in the SNP quietly agree with them.”
Elsewhere, David Lonsdale, director of the Scottish Retail Consortium, said: “Scotland’s retailers have warmly welcomed the freeze to the headline business rate for the coming year.
“However, the decision not to match England and Wales with an enhanced rates relief for shops, hospitality and leisure businesses over the coming year is disappointing and a missed opportunity.
“Matching the rates relief offered elsewhere would have helped smaller stores here in Scotland at a time when they are grappling with spiralling costs and an uncertain outlook.”
Susan Love, head of the Association of Chartered Certified Accountants in Scotland, commented: “This budget is yet another reminder of the challenging outlook for public spending and while difficult decisions on tax and spending had to be made, businesses will worry about further erosion of spending power of consumers as well as the limited headroom to offset the continued pressure on business costs.
“While there are still choppy waters ahead, the Scottish Government now needs to focus on providing certainty about future tax policy to restore confidence and investment in Scotland’s economy.“
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