Mackay unveils funding boost for Scottish public services

12 Dec 18

The Scottish finance secretary has announced a raft of funding increases for public services but warned priorities could change with no deal Brexit.

Unveiling his draft budget today, Derek Mackay announced boosts for education, health and local government in Scotland, although there were no significant changes to devolved taxes.

Mackay told MSPs that the health portfolio budget would increase by £730m, which he said was an increase of £500m in real terms.

He added that education remained a priority for the SNP government and announced £180m to close the attainment gap, £500m to expand early learning and childcare, £600m for colleges and £214m for apprenticeships.

Mackay also found more money for local government, providing total support of £11.1bn.

“This provides a real-terms increase in both revenue and capital funding and an overall real terms increase in the local government settlement of over £210m.”

But the Convention of Scottish Local Authorities was critical of the budget and expressed “disappointment” that local government’s role as a deliverer of vital services was not recognised. 

Cosla’s resources spokesperson Gail Macgregor said: “There is always smoke and mirrors around how those at the centre present their budget. The one message that the Scottish people need to take from today's budget is that the local government’s core budget which provides our essential services has taken a hit.”

Alison Evison, Cosla president, said: “Which ever way you want to dress it up, the realirt od the situaiton is that yet again the totality of the essential services councils deliver has been neglected by the Scottish Government.

“There is no scope for local government to mitigate the impact of these cuts as there has been no movement yet on local taxation - the 3% council tax cap remains and there is no indication about discretionary taxation, including tourist tax.”

Mackay condemned chancellor Philip Hammond and prime minister Theresa May for failing to end austerity.

He said: “There can be no doubt, the prime minister did not deliver on her promise to end austerity. Instead we have austerity delivered by choice not necessity.”

Mackay was also critical of the government’s handling of Brexit negotiations and warned: “If the UK does end up in a no deal Brexit, I may be required to revisit the priorities in this budget.”

On income tax, Mackay said ruled out both tax rises and cuts, keeping rates steady. It was “not the right time to cut tax for the highest earners at the expense of public services”, he said.

“I will not increase any of the rates of income tax so 99% of taxpayers will see no increase in the tax they pay.”

Public sector workers earning up to £36,500 will receive a 3% pay rise, with those earning more than that getting lower rises.

However, the Public and Commercial Services union criticised this announcement saying it was below inflation.

PCS national officer Lynn Henderson said: “Three per cent this year just isn’t good enough, it’s below inflation and therefore, it’s a pay cut.”

Mackay also revealed that ministerial pay would once again be frozen at 2009 levels.

Reaction to the Budget:


Russell Gunson, director of IPPR Scotland, said:

“We welcome the Scottish Government’s decision to freeze the higher rate income tax threshold in Scotland. This is a progressive move and something IPPR Scotland called for in advance of the budget. 

“However, this much needed revenue has not been enough to end spending cuts in Scotland never mind deliver faster progress against the ambitious priorities we’ve set ourselves here in Scotland.”

Allan Sampson, FDA Union national officer, said: 

“Whilst we support increasing the pay of the lowest paid workers, it’s important to remember that FDA members have also suffered from nearly a decade of pay restraint.

“The split nature of this pay policy sends a message that the Scottish government doesn’t truly value the vital work carried by our members in Scotland.”

Lewis Morrison, chair of the British Medical Association in Scotland, said:

“The resources needed to deliver care in Scotland are simply not keeping up with demand for that care.

“While there is welcome extra funding for health in today’s Budget, it is unlikely to make any significant difference to this growing gap, and the impact it is already having on our health services.”

Update 10:15am 13/12: Story has been updated to include Coslas reaction

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