Scottish budget reaction: skills funding urged to deliver net zero agenda


FUNDING must prioritise developing a skilled workforce to deliver a ‘transformative’ green agenda, according to the Scottish and Northern Ireland Plumbing Employers’ Federation (SNIPEF).

SNIPEF chief executive Fiona Hodgson made the call in response to John Swinney’s Scottish budget announcement of over £500 million net zero initiatives.

“The government’s transformative net zero agenda is welcomed and supported by our sector; however, we urge greater priority is given to the skills development of the people needed to realise these already challenging targets,” Fiona Hodgson said. “It is critical that apprenticeship funding is focused towards developing the essential skills of our next generation of plumbers and heat engineers, as well as upskilling the current workforce in areas such as heat pumps.

Fiona Hodgson

“By ensuring the people with the needed skills are recruited and developed today and in the future, the government can showcase to the world that the green economic model contained within their net zero ambitions is both viable and sustainable.”

John Swinney confirmed that Scotland’s transition to net zero will be boosted with increased investment to over £366 million in delivering the Heat in Buildings Strategy in 2023-24.

A £46 million increase was also announced in resource funding to universities and colleges to ensure a highly qualified and skilled workforce.

Elsewhere in the budget, the additional dwelling supplement was raised from 4% to 6%. This is paid as part of Land and Buildings Transaction Tax (LBTT) on additional properties and has been tipped to raise £34 million.

John O’Malley from Pacitti Jones described this as a ‘short-sighted policy that will ultimately reduce homes available for rent, push up prices and increase competition for those that are available’.

He added, “The Scottish Government should focus less on taxation and more on building more houses. This is a soundbite announcement that does nothing to help the dire shortage of homes in the private rental sector and impacts those people who are already struggling to find places to live. It is utter madness.”

David Alexander, CEO of property specialist DJ Alexander Scotland, accused Mr Swinney of failing to support the housing market. He commented, “He had an opportunity to equalise Scottish property taxes with England in his budget but instead decided to maintain a widening disparity which can only have the effect of making houses considerably more expensive for first time buyers, those buying for more than £325,001, and those seeking to invest in property or to buy a second home.

David Alexander

“Indeed, the additional dwelling supplement is to be increased from 4% to 6% to act as a further disincentive to landlords, property investors, second homeowners. In October £19.3m was raised through the additional dwelling supplement (ADS) which was a quarter (27.7%) of all revenue raised. The policy of targeting the private rented sector continues yet there is no evidence that the Scottish Government has any plan in place on how to replace the 340,000 properties and the 700,000 tenants who live in these homes.”

On income tax, plans were revealed to add 1p to the higher and top tax rates, while maintaining the starter and basic rate bands at their current levels. The threshold at which people pay the top rate will reduce from £150,000 to £125,140, in line with the rest of the UK.

The Institute of Chartered Accountants of Scotland (ICAS) raised concern about the tax burden on middle earners. Justine Riccomini, head of tax (employment and devolved taxes), said, “Today’s budget has not improved the tax burden on middle earners at a time of a cost-of-living crisis. With today’s Bank of England interest rate rise likely to impact mortgage payments, employees living in Scotland earning between £43,663 and £50,270 will now pay 42% income tax as well as 12% Class 1 National Insurance on each additional £1 they earn – which reflects an effective rate of tax of 54% in that earnings range – 22% more than equivalent employees elsewhere in the UK.”