Scottish Budget: Ten key points from the Scottish budget - how does the Budget affect you?

Finance Secretary Shona Robison has unveiled this year’s budget – including a new income tax band

Finance Secretary Shona Robison has set out the Scottish Government’s spending plans for the next year.

She had warned this would be one of the most challenging budgets since devolution, but the government managed to balance the books despite a £1.5 billion funding shortfall.

We take a look at the 10 key points to come out of her 2024/25 budget statement.

First Minister Humza Yousaf and Finance Secretary Shona Robison on their way to the Holyrood debating chamber to deliver the 2024/25 Scottish budget. Image: Andy Buchanan/Getty Images.

1 – There will be a new income tax band

A new “advanced rate” of income tax will be introduced - this will mean those earning between £75,000 and £125,140 will pay 45 per cent.

This will affect around 114,000 taxpayers in Scotland.

The “top rate” of income tax (those earning over £125,140) has also been increased to 48 per cent.

However the current thresholds for the “higher rate” and “top rate” (£43,663 and £125,140 respectively) are being frozen.

Ms Robison says this will generate an extra £307 million as more people will find themselves in a higher tax band after being given a pay rise.

The Scottish Fiscal Commission estimates all of these measures will generate £18.8bn.

2 – Council tax freeze to be “fully funded”

The government is providing an extra £140m to fully finance the council tax freeze that was announced earlier this year.

However Cosla, the umbrella body for Scotland’s 32 councils, had said £300m was needed for the council tax freeze to be classed as fully-funded.

3 – Huge cuts to the housing budget

The total housing and building standards budget is being cut from £738.3m in 2023/24 to £533.2m in 2024/25.

This includes cutting the budget for building more homes by over £189m.

Both Edinburgh and Glasgow councils declared housing emergencies in the last few weeks.

Ms Robison says the government will be providing £90m in discretionary housing payments and an additional £35m to end homelessness.

That hasn’t stopped the Scottish Conservatives criticising the decision - something the finance secretary said was “astonishing”.

4 – Failure to raise Scottish Child Payment to £30

All benefits which are devolved to Holyrood are to be raised by 6.7 per cent in line with inflation, including the Scottish Child Payment which will be increased to £26.70.

However Oxfam Scotland says this falls “inadequately short” of the £30 they say First Minister Humza Yousaf committed to during his leadership campaign.

The Child Poverty Action Group added this is “bitterly disappointing for struggling families”.

5 – Real-terms cut to mental health and drug and alcohol funding

The budget for NHS recovery, health and social care is to increase from £18.9bn to £19.5bn.

Ms Robison says this is an uplift of four per cent for frontline NHS boards, which is below the 6.7 per cent rate of inflation.

Dentistry funding is increasing from £476.2m to £497.2m and funding for the National Care Service and adult social care is increasing from £827m to over £1bn.

However funding to tackle alcohol and drug misuse is only rising by £100,000 and there will be no extra funding for mental health – meaning an effective cut in real-terms funding once you take inflation into account.

Early years healthcare has also been cut by £800,000.

6 – Rates relief for island hospitality businesses

Businesses whose premises are valued below £51,000 will have their non-domestic rates frozen, something Ms Robison predicts will save businesses £37m.

Island hospitality businesses will also enjoy a 100 per cent rates relief up to the value of £110,000.

The Scottish Tourism Alliance said the government “squandered a golden opportunity” to replicate the UK Government’s 75 per cent rates relief in England.

7 – School meal debt to be cancelled

All school meal debt is to be cancelled, costing the government £1.5m.

This is on top of the government spending an extra £43m to expand free school meals across Scotland to primary six and seven pupils.

8 – Billions to be spent on public transport

A total of £2.5bn has been allocated in this budget to improving public transport.

This includes £425m on bus services, £434m on island ferries, ports and harbours, £1.6bn on ScotRail and the Caledonian Sleeper, and £220m on active travel.

Construction on dualling the A9 between Tomatin and Moy will also commence in 2024/25.

Transport Secretary Màiri McAllan is due to make a ministerial statement on A9 dualling on Wednesday 20 December.

9 – Scottish Funding Council budget slashed

The overall education and skills budget is being increased from £4.2bn to £4.9bn.

However this includes cutting the budget for the Scottish Funding Council by £107.4m.

The overall lifelong learning budget is also being cut by £23.5m and funding for tuition fees is being reduced by £23.4m.

10 – More money for public services

The Scottish Police Authority resource budget will increase by £75.7m and capital funding for Police Scotland will rise by £64.5m.

On top of this the Scottish Prison Service’s budget will increase by 10 per cent, and £176m will be spent on modernising the prison estate.

The Scottish Fire and Rescue Service will get an additional £13.5m for resources and £10.3m to improve facilities – something the Fire Brigades’ Union says it is “very disappointed with.