NEWS Scotland budget announcement 2020/21

The Scotland budget was announced on 6 February by the Minister for Public Finance, Kate Forbes MSP, live in Holyrood. The budget comes a month earlier than the UK budget, which will be delivered by Chancellor of the Exchequer Sajid Javid on 11 March. This scenario is highly unusual and means that some areas of the Scotland budget, such as income tax, will depend on the outcome of the UK budget.

As expected, however, the Scotland budget delivers crucial investment to tackle the climate emergency, an increased budget in public and health services of over £15 billion for the first time ever, as well as significant increases for infrastructure and other areas to help Scottish businesses thrive. Kate Forbes described the budget as a “bold and ambitious programme” serving “wellbeing and fairness at its very heart” in order to help the future generations of Scotland and those presently most in need.

Tracker highlights the key statistics from the Scotland budget announcement below.

Scotland budgets – facts and figures

Climate emergency

The budget was focused heavily on responding to the global climate change emergency and transforming Scotland through greener initiatives. The following allocations were based on guidance from the Climate Change Emergency action team.

  • £1.8 billion of capital investment in specific products to reduce carbon emissions. This is an increase of £500 million compared with last year.
  • The Scottish Government has committed £250 million to peatland restoration over the next ten years, to be spent on large restoration projects which will enhance biodiversity in some of the most important habitats in Europe and generate more jobs in rural communities.
  • £200 million of revenue-financed investment will go to local authorities to provide an incentive to use the assets available to reduce emissions and boost the economy through the green growth accelerator.
  • £64 million to support the commitment to plant 12,000 hectares of forestry, with the aim to reach 15,000 hectares by the mid-2020s.
  • £120 million for a heat transition deal, to recognise the need to reduce the use of carbon in buildings. This will allow Scotland to seize the huge economic opportunity renewable heat will present – delivering thousands of new green jobs.
  • £2 billion ring-fenced for transformational investment for measures to support the delivery of the Climate Change plan during the next Scottish parliamentary term.

Public services

Another highly anticipated area of the budget was public services. The 2020/21 budget marks a historic moment for public spending in Scotland, being the first time the Scottish Government has allocated more than £15 billion to health and care services, as well as increased funding to support other key public service areas.

  • Spending on general medical services will top £1 billion, for the first time.
  • Investment of £9.4 billion in health and social care partnerships.
  • £117 million of investment in mental health support.
  • Frontline services funding for NHS boards will increase by £333 million, with a further £121 million increase for improving patient outcomes.
  • £72 million investment for Police Scotland, which is above the increase the Scottish Government had promised, in order to effectively maintain officer numbers. This represents a real-terms increase of £37 million to the police budget.
  • An increase in overall funding for rail and bus services by £286 million. This will mean a total of £1.55 billion worth of investment in 2020/21.
  • Investment in active travel will also increase to over £85 million promoting cycling, walking and more sustainable transport.
  • A 3% pay uplift for public sector workers earning up to £80,000.

Finance and business

The Scottish Government is committed to driving the economy further, with plans in place for income tax, infrastructure funding and further investment in affordable housing schemes:

  • £220 million of seed funding for the Scottish National Investment Bank, which is intended to be operational in 2020. This will support the Government’s mission to drive the transition to a net-zero emissions economy.
  • Total spending on finance, economy and fair work will increase from £5,336.8 million to £6,271.6 million.
  • Infrastructure investment will grow to nearly £1 billion in the first year of the National Infrastructure Mission.
  • Affordable Housing Supply programme spending will increase to £843 million.
  • A commitment of more than £800 million to help the Scottish Government continue to progress towards the target of building 50,000 affordable homes by 2021.
  • Scottish income tax is expected to drive £12 billion of investment.
  • No Scottish taxpayer will pay more income tax than they did last year. According to the budget, 56% of Scottish taxpayers will pay less income tax than if they lived elsewhere in the UK.

If the Scottish National Party’s budget proposals are approved, they will come into force from 6 April 2020. However, it is worth noting that these proposals are estimates based on what MSPs think will be the measures and figures announced in the Westminster budget on 11 March; therefore, there may be some changes to reflect later announcements.

Find out more information on what the Scotland budget 2020/21 means for your business on the Scottish Government website.

Tracker can support your business

The Scotland budget 2020/21 offers a positive and exciting prospect for the future of Scottish business, and the time is now to get involved in the lucrative procurement market.

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Feb 07, 2020.