FINANCE Secretary Shona Robison will deliver the Scottish Government’s Budget today – against the backdrop of what she has called the “most challenging” circumstances ever.
She is facing calls to raise income tax, stop council cuts and boost benefits despite increased demands on the Scottish Government’s coffers amid high levels of inflation and an estimated £1.5 billion black hole in its budget.
It is Robison’s first Budget since she was appointed to Humza Yousaf’s Cabinet when he took over as First Minister in March.
She has previously said the Budget was coming amid the harshest circumstances in the devolution era and indicated the “size” of the public sector would be cut – suggesting there could be waves of redundancies.
Tax reforms are reportedly being considered as a means of reducing budgetary pressures – with the Scottish Trades Union Congress (STUC) urging ministers to consider a package of tax increases it said would raise an extra £3.7bn.
After Chancellor Jeremy Hunt’s (below) Autumn Statement in November, the Scottish Government can expect an extra £544 million from the Treasury until 2025.
But the Scottish Government has already committed to freezing council tax, which is expected to cost more than £300m, pledged £100m to cut NHS waiting times, and deferred £325m of spending to the financial year 2024-25.
Economists at Strathclyde University expect a shortfall in revenues to the tune of £800m in day-to-day spending and £700m in capital investment.
The Times reported last week the Scottish Government was considering partially implementing the STUC's tax reform proposals, with the expectation of raising between £39m and £92m by creating a new tax band for higher earners.
It would see income tax put up to 45% on those earning £75,000 and £125,140.
'Tax those at the top'
The STUC’s general secretary Roz Foyer (below) urged Robison to be “bold and ambitious”, adding: “Taxing higher earners and redistributing the wealth – at a time when we have seen record profiteering from those at the top of our society – isn’t a radical proposal but it’s a start.”
Tax reforms are backed by a number of organisations including Oxfam, the Poverty Alliance and the progressive think tank IPPR Scotland, who jointly wrote to the leaders of the SNP, Tories, Labour and LibDems in Holyrood to call for a “series of fair tax reforms that together will serve as the linchpin for a more equitable, resilient, and prosperous Scotland”.
They said that the Government must show “genuine Budget bravery by kick-starting common-sense tax reforms” which are wide in scope, rather than “short-term tax tweaks”.
Meanwhile, local authorities fear the council tax freeze could result in the Scottish Government passing down cuts which they warn would have “serious consequences for communities”.
Cosla, the organisation that represents councils, has warned that the policy must be “fully funded” to avoid local authorities having to reduce their spending.
Steven Heddle, Cosla’s vice president, said: “Unless it is funded with additional money for each council that allows them to fund their planned council tax increases, then it is not fully funded, and it will be our service users who will suffer as a consequence.”
Council tax blues
He also echoed previous criticisms made by the local authority body about the way the policy had been unveiled, saying the announcement earlier this year at SNP conference “came out of the blue”.
Heddle added: “Any suggestions that local government’s workforce needs cut further will have serious consequences for communities.”
Councils have already cut staff by 15% – nearly 35,000 full time equivalent staff – between 2006 and 2018, he added, while the Scottish Government workforce has doubled in the same period.
Colsa is also calling for the Budget to focus on reducing and alleviating poverty, saying that investing in local authorities was one of the best ways to achieve this.
“This means investment in the essential social supports provided every day by councils, in schools, in local community hubs, at the right place, at the right time,” said Tony Buchanan, Cosla’s children and young people spokesperson.
And ministers are facing calls to increase the Scottish Child Payment from £25 per week to £30.
First Minister Humza Yousaf expressed a desire to increase the benefit during the SNP leadership race earlier this year.
The Child Poverty Action Group said increasing the payment was a “cost-effective investment that would provide much-needed financial support to the lower income families who get little if any benefit from the proposed council tax freeze”.
