Scottish Budget: Kate Forbes statement in full

As finance secretary Kate Forbes revealed the Scottish budget at Holyrood today, here is her statement in full.

Finance Secretary Kate Forbes preparing her speech in her office in Holyrood, Edinburgh, ahead of delivering the Scottish Government Budget for 2020/21 to the Scottish Parliament (Photo: Jane Barlow/PA Wire).

Speaking at Parliament this afternoon, Ms Forbes said: “Today’s Budget comes almost a year after the first case of COVID- 19 was notified in Scotland. The pandemic has shaken our society and economy to their core.

"Every life has been impacted, and every single life lost has been a tragedy. Livelihoods have been up-ended. Frontline services have responded in remarkable ways.

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"And of course our collective fight to overcome the virus continues. The exceptional circumstances require an exceptional response.

"This Budget provides for continuity in our urgent work to control the virus and protect our economy and NHS, whilst the vaccine is delivered as quickly and as safely as possible.

"It is not just the pandemic that has taken its toll on Scotland’s economy. The wrecking-ball of a dismal Brexit deal is compounding matters.

"So today’s Budget will help to bring much needed support and stability, to ensure our economy recovers and we protect those who have been hit the hardest.

“Our approach continues to target support in the immediate term, as well as tracking a course over the coming year to build a fairer, stronger and greener country.

"Fundamentally it focuses on three key priorities: Creating jobs and supporting a sustainable recovery; Responding to the health pandemic and; Tackling inequalities."

UK Budget implications

"This is a time of great fiscal uncertainty.

“In the absence of a UK Budget much of the information we need to plan with certainty is missing.

"We must persevere with a Budget based on a partial, settlement. Left waiting until the UK Budget to see the full hand being dealt us.

"I have repeatedly welcomed the additional Covid funding – largely borrowed – provided by the UK Government. I do so again.

"But I also have a duty as Finance Secretary to make the case forcefully when I believe more is required. There is £21 billion sitting in the UK Covid reserve. Our share of this funding would help meet the ongoing needs of our businesses, our NHS and other public services.

"In the interests of providing certainty and based on the balance of consequentials received to date, I have made a prudent funding assumption and allocated £500 million against what we expect to flow to us from that Covid reserve next year.

"This will help make the budget process more transparent and aid parliamentary scrutiny of our spending decisions I have written to the Chancellor this week setting out the Scottish Government’s priorities for the UK Budget and seeking clarity and flexibility on several matters of importance to Scotland.

2020-21 update

"Presiding Officer, given the particular interaction between this year’s and next year’s budgets, I will touch on the 2020-21 position as we approach financial year-end. Last month I set out how Covid funding was being allocated in full.

"Following my assessment of the latest position, and confirmation of an additional £400 million of consequential funding I have already confirmed further 2020-21 funding of £300 million for business support including payments from the Strategic Framework Business Fund to the end of this financial year; a one-off top up to the grant support for hospitality, retail and leisure businesses; comparable support for island businesses; and increased funding for the taxi and wedding sector funds £85 million for education recovery; and £30 million for university student hardship,

"On Monday, Councils paid out millions in Framework funding and sector top-ups, significantly more than the figures published earlier this month. Since Boxing Day, payments have been made to tens of thousands of businesses. That builds on the 383,000 business awards made since the beginning of the pandemic, valued at over £2.3 billion.

“Alongside that, we are filling the gaps in support through sector- specific funding, with funding now available for taxi drivers, brewers, travel agents, indoor football clubs, events and a variety of businesses in the wedding sector from florists to photographers.

“I know that businesses will continue to need support for as long as they need to close, and they want certainty about the future. I can confirm today that the Strategic Framework Business Fund will continue to support businesses beyond the end of this financial year– should funding from the UK Government be forthcoming.

"I can confirm two further measures– a doubling of the discretionary fund for local authorities to £60 million, to distribute as they wish, and a commitment to pay February grants at Level 4, irrespective of what Level a business is in.

"Presiding Officer, Local Government has been at the forefront in distributing grants, supporting communities and responding to the pandemic. Last year, the Scottish Government and COSLA agreed the details of a scheme then estimated at £90 million to compensate councils for the loss of income from sales, fees and charges due to the pandemic.

"Today I am increasing that allocation to £200 million. When added to the £49 million previously announced, the total support for councils’ losses this year is now up to an additional £249 million.

"I am writing today to the Finance and Constitution Committee with the full 2020-21 allocation details, which confirms that every single penny has been allocated.

Lifelong health and well-being

"Presiding Officer, we have always been rightly proud of the world- class care provided by our NHS. But during the pandemic, in the toughest circumstances imaginable, our inspirational NHS workers have worked tirelessly.

"When the history of this pandemic is written, our NHS and social care staff will be recognised as the undisputed heroes they are. I’m sure I speak for everyone in this chamber – everyone in the country in fact – when I offer them our heartfelt thanks.

"To support their efforts in 2021-22, we will invest over £16 billion in the Health and Sport portfolio – an increase of over £800 million to the core budget. And an additional £869 million to support our response to Covid-19 – including vaccinations and Test and Protect.

"This includes investment in primary care of £1.9 billion. And it will bring our total investment in social care and integration to over £883 million in 2021-22.

“I want to draw attention to two critical elements of the Health Budget. The first is that we will provide £145.3 million funding in 2021-22 for alcohol and drugs – an increase of £50 million on this year, specifically for our national mission to reduce drugs deaths as part of a five-year £250 million commitment.

"Secondly, we know that the pandemic has taken a huge toll on mental health and so next year’s investment in mental health will exceed £1.1 billion. This will underpin our continued approach to improving mental health services and support for children, young people and adults, including Child and Adolescent Mental Health Services.

Tackling poverty

“The social harms of COVID19 have exacerbated poverty and inequality, highlighting the importance of driving progress towards our statutory targets to reduce, and ultimately eradicate, child poverty, by 2030.

"We are delivering a direct programme of action to meet those targets across 2018-2022, backed by the £50 million Tackling Child Poverty Fund which this Budget confirms we will deliver in full.

"The ambitious use of our new welfare powers to tackle child poverty includes significant investment in our “game changing” Scottish Child Payment of an expected £68 million in 2021-22, with payments starting next month – part of a total of almost £3.6 billion for social security.

"Our public sector pay policy will continue its progressive and restorative approach, focused on addressing low pay.

"The UK Government’s ill-judged pay freeze has a material impact on our block grant, within which we must balance reward and affordability of public sector pay.

"Negotiations are under way in our NHS on the future of Agenda for Change and I will work with the Cabinet Secretary for Health to deliver for our NHS workforce.”

Public services stepping up to Covid

"The most enduring way to tackle inequality and break the intergenerational poverty cycle is through education.

"In 2021-22, we will provide £2.7 billion across the Education and Skills budget to deliver on this ambition, alongside the significant funding for education delivered through the local government settlement.

"This includes almost £1.9 billion for the Scottish Funding Council, to fund our university and college sector, including £700 million for colleges and over £1.1 billion for universities.

“It is vital that we continue to invest strongly in our world-class institutions, and provide students with the best opportunities.

"Turning to Justice, the budget provides significant extra funding to help deal with the backlog in criminal justice caseloads caused by the pandemic.

"We will provide a total funding settlement of £1.3 billion for the Scottish Police Authority, including an uplift of £60 million in the resource budget – surpassing our commitment to deliver a £100 million boost by 2021 and eliminating the deficit in the police budget.

"Keeping public transport options open remains vital to our recovery, backed by investment in 2021-22 of over £1.6 billion across bus

and rail services.

"This will ensure a viable alternative to private transport for more people, further reducing our reliance on cars providing a cleaner form of mass transport, in addition to promoting the wide benefits of our 20-minute neighbourhood ambitions.

"We will also deliver a national concessionary travel scheme for free bus travel for under19s in the coming year. And we will continue to support transformational change to our streetscapes with a five-year commitment to maintain the active travel budget at a record high of £100.5 million per year.

Local Government

“I said earlier that Local Government had been at the forefront of our response to Covid. I remain extremely grateful to Local Government colleagues, many of whom have worked night and day to manage grant funding, welfare support and maintain statutory services through lockdown.

"We will make available to local government a total funding package amounting to £11.6 billion for 2021-22, including a £245.6 million increase in core revenue funding and an additional £259 million of non-recurring Covid funding. That is a total additional revenue funding of more than half a billion pounds .

"Within that, the settlement includes additional funding of: £59 million to complete the expansion of Early Learning and Childcare to 1,140 hours; £72.6 million for investment in health and social care; and £7.7 million to support the inter-island ferries in Shetland, Orkney and Argyll and Bute meeting their revenue ask in full, as well as extending the timetable and RET on Orkney’s inter- island ferries.

"That takes the increase for core revenue services to £335.6 million and when added to the non-recurring COVID funding of £259 million, provides a total increase for local government of £594.6 million in 2021-22. I have also confirmed a further increase of £110 million over previously announced plans for the lost income scheme

for local government in 2020-21.”

Economic recovery

"Presiding Officer, while the pandemic’s profound effect on our economy requires constant support, it also requires us to plan and deliver a strong, fair and green recovery in the longer term.

"The future of our public services, depends on the resilience and strength of our economy and so, if this Budget must achieve anything, it must set the groundwork for economic recovery.

"Today, I set out a plan to deliver that – a plan which provides for ongoing business support, tackles unemployment, helps business emerge stronger and invests in long term growth.

"Leadership matters, and our enterprise agencies must have the resources they require to play a leading role in the recovery.

"The collective resource budget for the three enterprise agencies in the Highlands, the South of Scotland and across mainland Scotland will increase by more than 12%.

"The Budget builds on the significant package of labour market interventions with a total of investment of £1.1bn in employability and skills support.

“This includes an initial additional investment of £125 million for the Young Person’s Guarantee, the National Transition Training Fund and broader skill and employability support.

"The Young Person’s Guarantee will help achieve our ambition that within two years every young person will have the opportunity to

study; take up an apprenticeship, job or work experience; or participate in formal volunteering.

"Today’s Budget allocates £230.9 million to Skills Development Scotland to work with partners across this vital agenda.

"It also sees the launch of the first phase our five-year £100 million Green Jobs Fund and a commitment to establish a Green Jobs Workforce Academy.

"And across Scotland we will invest over £230 million to ensure our diverse and evolving cultural heritage is valued, nurtured, and celebrated, protecting thousands of jobs in the culture and heritage sectors.”

Investing for growth

"Presiding Officer, we must invest for growth. The Infrastructure Investment Plan we will publish next week will outline a pipeline of projects that drive Scotland’s resilience driving inclusive, net-zero and sustainable growth.

“The Plan will be key to the success of the National Mission for Jobs, offering a robust pipeline of work that will help stimulate the green recovery – providing good, green jobs, stimulating supply chains and building market confidence.

"The Capital Spending Review will set out budgets for five years, confirming that we will deliver our National Infrastructure Mission in full, to increase annual investment in infrastructure by £1.5 billion by 2025-26, supporting 45,000 full time equivalent jobs across the period.

“These efforts are enhanced by the work of the Scottish National Investment Bank, which we will capitalise with £2 billion, with over £200 million for investment in 2021-22.

"Next year, we will provide funding of £210 million for cities investment and strategy.

"This will continue our work with regional partners to progress all Deals not yet in delivery, with the aim of concluding Full Deals for all regions urban and rural by the end of 2022, COVID has further underlined the value of a safe, secure and affordable home and our homes will also now be somewhere many of us work from.

"We’re providing more than £800m for housing in the budget. Building on our achievement of having delivered almost 97,000 affordable homes since 2007 I am allocating funding of more than £711 million to the Affordable Housing Supply Programme."

Green recovery

"Capital investment will inject confidence, but it will also help to meet our statutory commitment to be a net zero society by 2045.

"Our carbon taxonomy shows nearly 37% – or over £1.9 billion – of our capital investment is low carbon.

"As we look to Glasgow hosting the COP26 summit in November, we want to inspire global action and demonstrate that Scotland is a world leader in green and renewable technologies.

"The Programme for Government and our recent Climate Change Plan update together outlined a £2 billion Low Carbon Fund over the next Parliament – central to which is investment of almost £1.6 billion in heat and energy efficiency in our homes and buildings.

“Through the Fund we will also begin a five-year £50 million programme of investment to regenerate Scotland’s vacant and derelict land.

"This will help put abandoned land to use across our communities, supporting the development of 20 minute neighbourhoods.

“This includes creating community gardens to nurture wellbeing, provide a local food supply and improve biodiversity – or creating space for community renewables projects, low carbon affordable housing, urban farms, woodland and green spaces.

"Presiding Officer, I strongly believe in investing in economic recovery in every part of the country – including rural areas.

"Recognising the acute impact of the pandemic on our rural communities, we will double the Rural Tourism Infrastructure Fund, helping tourist attractions and their communities make improvements to cope with increased visitors.

"Our £801 million investment in agricultural support will offer much needed stability to our farmers, crofters and land managers – and help ensure our agriculture sector plays a leading role in our transition to net zero.

"Over the next five years. an additional £150 million has been allocated for woodland and forestry through the low carbon fund, supporting a 50% increase in tree planting and woodland creation from 12,000 hectares this year to 18,000 hectares by the middle of the decade.

"And our peatland restoration spend will increase by 10% as part of a ten‑year £250 million commitment."

Digital economy

"Digital connectivity was important pre-pandemic, but now as a result of the changes in how we work, shop and socialise due to COVID-19, it is absolutely fundamental to our future prosperity.

"The review I commissioned from Mark Logan has provided an industry-led blueprint to establish Scotland as a world class hub for technology startups. It has rightly drawn wide acclaim.

"To help deliver this ambitious agenda weare providing an additional £7 million in 2021-22.

“To bring more people into the digital world we will invest almost £100 million in digital connectivity. This includes funding for our Reaching 100% programme, and for improved mobile coverage through delivery of 4G and 5G infrastructure ensuring no part of Scotland is excluded.

Conclusion

"Presiding Officer, we have been through so much as a country.

"Our recovery may be long, and it will be hard, and we cannot guarantee that there won’t be more tough times ahead.

"But throughout these dark times, we have never given up hope.

"Hope for a better future, for a healthier, greener, fairer society.

"And now with large-scale vaccination, focused firstly on the most vulnerable, there is some light at the end of the tunnel.

“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."

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