Budget: What it all means for Scots in 2016

JOHN Swinney delivered the first ever draft budget that saw a Scottish Rate of Income Tax (SRIT) set in what was a historical move at Holyrood.

The NHS will benefit from an extra £500 million due to increase in spends in England. Picture: Greg Macvean

The unveiling of the spending plans also marked the start of the countdown to Scottish Parliament elections in May 2016, with Mr Swinney moving to shore up the SNP’s electoral appeal in key policy areas.

Mr Swinney ruling out an income tax rise was clear evidence an election is on the way, but the announcement that the SNP government would push ahead with the council tax freeze for the ninth year in a row was another talking point, albeit not a surprising one.

But the deputy first minister’s highly political draft budget came under fire from local government body Cosla, which warned that Scotland’s 32 councils would lose out on £350m.

• TAX

Income tax is being kept in line with UK levels as Mr Swinney took over responsibility. But tax increases are to be introduced on buy-to let properties through a 3 per cent supplement on land and buildings transaction tax on these properties, raising up to £29 million a year. Business rates will go up for large firms who face a £130m “raid” under a new supplement. Councils could get a share of income tax raised locally under plans set out.

• COUNCIL TAX

John Swinney said that council tax will be frozen for the ninth consecutive year as he confirmed that the SNP government would continue with the flagship policy going into next year’s Holyrood election.

Ministers will also set out plans to reform the council tax in the new year, with the Deputy First Minister saying this would be done “in a way that will delivers sustainable council finances and greater fairness for local taxpayers”.

• NHS

An extra £500 million was announced for health service budgets, mainly as a result of additional cash coming to Scotland from Westminster after funding hikes south of the Border. This will see an additional £45m going into new models of primary care, while plans were also unveiled to spend £200m over the next five years in six new centres to carry out hip and knee replacements as well as cataract operations, as the focus shifts to dealing with the needs of an ageing population.

• HIGHER EDUCATION

The Scottish Government will invest £1 billion in higher education to protect the Scottish Government’s free tuition pledge.

There will also be a protection of the core research budget for universities in Scotland, the government said.

The government said that it will continue to invest in the college and university sectors to widen access to university among those currently under-represented, including women and other groups.

• HOUSING

An extra £90 million was anounced for affordable housing, bringing next year’s budget to £690m. This is in line with the SNP’s pledge to build 50,000 new affordable homes during the lifetime of the next parliament should they be returned to power next May. Independent research recently showed that 12,000 new affordable homes are needed each year for the next five years to ease pressure on housing lists in Scotland. However, environmental campaigners say that the budget for ending cold homes has been cut, warning this fails to reflect the government’s commitment to improve energy efficiency of Scotland’s homes, making our housing fit for a low-carbon Scotland.

• TRANSPORT

A total of £1 billion will be invested in transport, including road and rail improvements in 2016-17, the government said.

Work will begin on construction of the Dalry by-pass in Ayrshire and improvements will also be delivered to the Haudagin roundabout in Aberdeen, the Deputy First Minister promised.

There was a commitment to continue to “maintain the safe operation” of the Forth and Tay Road bridges in the government’s Budget document.

The government also said its spending plans would maintain ferry services on the Clyde and Hebrides, Gourock–Dunoon and Northern Isles routes in 2016-17.

• POLICING

A total of £55 million will be set aside for “community safety” and to protect frontline policing budgets, the Deputy First Minister said.

The Scottish Police Authority will benefit from a £17.6m boost to its budget, Mr Swinney said.

It will also retain police officer numbers at 1,000 higher than in 2007, a key SNP pledge.