Budgeting For Growth

It is a testament to the negotiating skills of Finance Secretary John Swinney that the passing of the Scottish Government’s annual budget has largely become seen as an important, but smooth process in the public eye. When the SNP was first elected to Government in 2007, there were many commentators who believed that our then minority administration would collapse at the first budget, unable to secure the agreement needed from other parties for our spending plans.

Of course in the event that budget passed, and with one exception when opposition parties initially voted down the Scottish Government’s budget before passing an identical version of it the following week, every subsequent budget also made it through Holyrood despite the SNP’s then minority status.

The budget for the coming financial year has also just completed its passage through the Scottish Parliament, although given that the SNP has now moved from a minority to a majority government, there was little reason to doubt that it would do so. Yet despite that majority, John Swinney again sought to build consensus across the chamber by listening to the changes other parties and groups across Scotland wanted to see to the plans.

Although yet again no formal amendments to the budget plans were submitted by other parties, additional funding was found amongst other things for supporting college students; for improving broadband infrastructure, particularly in rural areas; for sustainable and active travel; and for more affordable housing. While it is disappointing that most of the other parties failed to actually back these measures that they had been seeking by voting for the budget, it is an important fact that the Scottish Government’s approach was to try and listen to others and attempt to build a consensus.

The budget as it was passed comes against the background of ongoing severe real terms cuts to the Scottish budget, particularly in capital spending, as a result of spending decisions made by the UK Government. Without the powers of a normal independent country, the Scottish Government is simply handed the cuts in its finances and has to adjust its spending plans accordingly.

Without significant tax powers, the main measure that the Scottish Government has to encourage growth is its capital spending budget. It is what creates jobs in our economy, something that is more important now than ever. That is why the decision was taken to reprofile £750 million of revenue spending to capital spending and to use other innovative measures to boost capital spending as much as possible.

This will have tangible effects in Banffshire & Buchan Coast, with funding in place for a replacement prison in Peterhead and for the construction of the AWPR once legal hurdles can be overcome. The improved journey times to and from Banffshire & Buchan Coast from the rest of the country will have a significant economic benefit once the road is complete.

The budget also contains funding to maintain the council tax freeze for another year. Since it was first frozen by the SNP Government, an average band D council tax payer in Aberdeenshire will now have saved £246 compared to what they would otherwise have had to pay.

The Small Business Bonus Scheme which has abolished or substantially reduced business rates for thousands of small businesses across the country, providing an absolutely vital boost to the businesses that are the lifeblood of our economy in these difficult times.

Tough decisions have had to be made, but the budget has done everything possible to boost jobs and economic growth as we continue to work towards economic recovery.