Scottish budget announced with £1.1 billion being invested in jobs and skills support

Scottish Parliament

THE Scottish budget 2021-22 has been announced with significant investment being made to drive the country’s economic recovery.

Job creation was identified as a priority in the budget – with support for jobs and skills totalling around £1.1 billion. Measures include a new green workforce academy to help people secure work in the low carbon economy; a £100 green jobs fund; £8 million towards making Scotland a world class hub for digital business; and an additional £115 million for the young person’s guarantee.

£711.6 million will be invested in affordable housing; a new £55 million programme to support town centres and community-led regeneration programmes was announced; £98.2 million to improve digital infrastructure and deliver access to high quality broadband and mobile coverage; £100.5 million for active travel to consolidate changes to healthy, green travel options seen during the pandemic; and an additional £27 million to expand woodland.

Business support also remains a priority and the finance secretary, Kate Forbes, confirmed that the local authority discretionary Fund will be doubled to £60 million in this financial year to allow councils to respond to local needs. In addition, businesses eligible for the strategic framework business fund will receive full Level 4 payments on 22 February, regardless of any future changes to local restrictions.

The Scottish Government will also increase a scheme which compensates councils for the loss of income from sales, fees and charges due to the pandemic from £90 million to £200 million in 2020-21.

Kate Forbes said, “This budget is being delivered in exceptional circumstances as we continue to battle a pandemic that has shaken our society and economy to the core, and as we face the harmful impacts of Brexit.

“It promotes innovation and reform, new beginnings, new directions. And while it continues to target support in the immediate term, it also tracks a course over the next year to build a fairer, stronger and greener country.

“To help drive our green economic recovery I am providing the stability and certainty that businesses have asked for through the most competitive reliefs packages in the UK. There are innovative measures to promote sustainable growth and we are investing more than £1 billion in jobs and training.

“The budget sets out a distinctive Scottish pay policy that again supports the lowest paid, charting a different course to the ill-judged pay freeze announced by the UK Government. It also bolsters our health service, delivers more affordable homes, provides additional childcare places and helps young people into work.

“Throughout these dark times we have never given up hope. This budget seeks to build on that hope and, by focusing on how we rebuild and renew our country, make the light at the end of the tunnel shine that bit brighter.

Responding to today’s Scottish Government’s budget announcement, Hannah Smith, director of the Institution of Civil Engineers Scotland, said, “Our infrastructure is critical to every aspect of our lives, prosperity and wellbeing. Today’s budget goes some way to recognising this, with funding commitments for public transport, housing, and connectivity.

“However, as the Cabinet Secretary herself noted, our infrastructure must be resilient. That is why it is vital a ‘resiliency audit’ is carried out across Scotland’s existing assets.

“This, alongside the forthcoming Infrastructure Investment Plan and Capital Spending Review, will be key to delivering the right infrastructure for our future – one which is sustainable, productive and inclusive.

Kevin Reid, chief executive of the Cruden Group, said, “While it’s disappointing that the land and buildings transaction tax (LBTT) relief has not been extended past 31st March, it is of some comfort to hear that first time buyers will continue to receive relief of up to £600 off their tax bill.

“More welcome news, however, is the increased funding for the affordable housing supply programme to £711m.  This will help tackle Scotland’s desperate shortage of housing and provide a significant boost in the supply of more affordable and energy-efficient new homes.

Brian Rogan, head of business rates in Scotland for CBRE, said, “We wrote to the Cabinet Secretary last week to reiterate our calls that further support was needed for business ratepayers due to the Covid-19 restrictions. We therefore welcome the fact that a further three months relief has been granted for certain sectors, although many will feel that three months is not sufficient given the current challenges in those areas of industry. It also remains unclear whether there will be any state aid related limitations imposed on these reliefs in light of the recent EU-UK Trade and Cooperation Agreement and further clarity will be needed in coming weeks before businesses can bank these reliefs.

“The lowering of the poundage rate for all businesses is something that was perhaps unexpected but something we also asked for in our letter as a small boost to those not benefitting from any other reliefs.

Director of the Scottish property federation, David Melhuish, commented, “We share the finance secretary’s desire to see a strong, fair and green economic recovery from the pandemic and a number of measures proposed today will help the business community support this aim.

“A key ask of the business community was to avoid a business rates cliff edge on 1 April for the hard-hit retail, leisure and hospitality sectors. We, therefore, welcome the Finance Secretary’s three-month extension to the 100% relief; however, it is vital that this is extended to the full tax year at the earliest opportunity to help protect Scotland’s post-pandemic recovery.

“The cut in the business rate poundage is also welcome and will benefit all ratepayers. The next step must be for a full-scale revaluation of non-domestic properties to reflect the current market and economic conditions.

“Meanwhile, the extension of the Business Growth Accelerator and Fresh Start is positive, but will do little to ease the financial distress caused by the application of empty property rates charges on premises that simply cannot be let.  We should not see taxation added to these businesses and properties.

“We regret that the residential LBTT holiday has not been extended beyond April 2021. This policy has helped to boost confidence in the housing market during the economic crisis, which has in turn helped the Scottish Government secure above average revenues in recent months.”