Scottish Budget: What is in the Budget? What Budget measures have been controversial? When will the Budget be passed?

The Scotsman takes a look at everything you need to know about the 2024/25 Budget ahead of the stage one debate on Thursday

On Thursday, MSPs will debate the 2024/25 Budget, including proposals to introduce a new income tax band and to freeze council tax.

When she first unveiled her Budget in December, finance secretary Shona Robison said it would be the most difficult budget in the history of devolution.

The Scottish Government has the unenviable task of filling a £1.5 billion financial black hole. Ahead of Thursday’s debate, The Scotsman takes a look at the key highlights of the Budget, including what the most contentious issues are.

Edinburgh and the Scottish Parliament, where the debate on the Scottish Budget at stage one will take place on Thursday. Picture: Getty Images

What was in the Scottish Budget?

The two biggest headlines to come out of the Budget is the reintroduction of a new income tax band and a council tax freeze.

The new “advanced rate” will mean those earning between £75,000 and £125,140 will pay 45 per cent in income tax, affecting around 114,000 taxpayers in Scotland.

The “top rate” of income tax – those earning more than £125,140 – will also be increased to 48 cent and the existing “higher rate” and “top rate” will be frozen.

Finance Secretary Shona Robison. Image: Lisa Ferguson/National World.

Ms Robison says this will generate an extra £307 million in revenue, but others say this could make Scotland an unattractive place to do business.

Those opposed to the proposals say it could put higher earners off living in Scotland, as they would pay less tax in England.

However, given this was a headline policy in the Budget and First Minister Humza Yousaf’s repeated commitment to progressive taxation, this argument is unlikely to sway the government.

The other big headline – £140m for a council tax freeze – was initially announced as a surprise by the First Minister at the SNP conference in October.

Cosla, the umbrella body for Scotland’s 32 councils, says this is nowhere near enough as they need £300m to fully cover the cost of the freeze.

Government sources have told journalists a council tax freeze remains the commitment, but there is unlikely to be any more money to increase the funding.

What’s been controversial in the Budget?

One of the biggest upsets came in the form of the housing budget, which is to be cut from £738.3m in 2023/24 to £533.2m in 2024/25. This includes reducing the budget for building more homes by over £189m.

Ms Robison has since said housing will be the number one priority if any extra money is found, or if the government gets any more funding from the UK Government.

Another issue that has caused a lot of upset is reductions to funding for free tuition fees – a flagship policy of the SNP Government.

There are worries this could lead to less Scottish students being able to go to Scottish universities as a result of a stricter cap on funding.

This is on top of the government confirming that additional Covid-era funding for 1,200 extra Scottish places will not be continued.

Will there be a new tax on businesses selling alcohol?

Not in this budget.

In the Budget small print, the government said it would be “exploring the reintroduction of a non-domestic rates public health supplement for large retailers in advance to the next budget”.

The public health supplement was introduced in 2012 and saw large retailers whose rateable value was over £300,000 paying to sell alcohol and tobacco. The move raised over £95m before being scrapped three years later.

This comes as the government proposes a real-terms cut to drug and alcohol funding in the 2024/25 Budget.

However, despite extensive criticism from the retail industry, the government insists any agreement on this would only be to consult on the proposals in the 2024/25 tax year, not formally introduce them.

Could we expect any more changes to the Budget?

Perhaps – the debate on Thursday is only the stage one debate, where MSPs will examine the contents of the Budget and decide on the general principles of the Budget Bill. The Bill itself still needs to go through a second stage where MSPs can suggest any changes they want to see, and then the third stage where they will get a final vote on the legislation.

When will the Budget be passed?

MSPs will debate the Budget Bill at stage two on February 20. The final vote at stage three will then take place on February 27.