Finance Secretary delivers budget aiming to tackle sagging economy and deal with Covid
The Highlands most vital agencies look set to get significant financial boosts in the coming year while tax rates will remain the same, if this year’s budget statement passes the Scottish Parliament.
Announced this afternoon by Highland MSP and Dingwall native, Finance Secretary Kate Forbes promised increased public sector and enterprise spending.
Earlier, the Scottish Fiscal Commission said the economy has shrunk by 7.1 per cent since the start of the Covid pandemic and will not return to pre-pandemic levels until 2024.
To counter that, Ms Forbes’ statement is primarily aimed at helping public services deal with the pandemic while the economy attempts to recover from lockdown inspired crisis.
But there is a long way to go before the spending and taxation plan is confirmed by parliament with the SNP relying on the Greens – who are likely to object to investment in high carbon sectors – to pass the budget.
Tow of those areas could impact the region are more cash for Highlands and Islands Airports Limited (Hial) and the continued dualling of the A9 and A96.
In what could be a major boost for council tax payers, the Scottish government will give extra funding to the local authority if it agrees to freeze 2021/22 council tax bills.
This is likely to be welcomed particularly in the Highlands after a big increase in council tax last year.
NHS Highland would get a massive financial injection, something that is likely to help considerably with the health board’s struggle to break even amid a much improved performance in recent years.
New funding allocation would see its budget swell from 2019/20 level of £627.5 million to £666 million in 2020/21 followed by £691.9 in 2021/22.
Hial will similarly see a major boost from £45.9 million in 2019/20 to £70.5 million in the next financial year followed by a rise to £91.4 million in 2022/23.
Highlands and Islands Enterprise, which has seen swingeing cuts in recent years will see its budget almost completely replenished over the next two years, from a starting point of £61.1 million in 2019/20 to £58.2 million in the coming financial year to £67.6 million by 2021/22.
Nationwide there will be no changes to income tax rates and bands in the coming year beyond rises to match inflation – the "slightly less" amount to pay in income tax next year is expected, however, to be minimal.
Tax reliefs for businesses introduced during the pandemic will also be extended while the poundage rate of non-domestic rates is to be cut for the first time in the history of the Scottish Parliament.
Ms Forbes said: “Today’s budget comes almost a year after the first case of Covid-19 was notified in Scotland. The pandemic has shaken our society and economy to the core.
“Every life has been impacted, and every single life lost has been a tragedy. Livelihoods have been up-ended. Frontline services have responded in remarkable ways.
“And, of course, our collective fight to overcome the virus continues. The exceptional circumstances require an exceptional response.
“This budget provides for continuity in our urgent work to control the virus and protect our economy and NHS, whilst the vaccine is delivered as quickly and as safely as possible.
“It is not just the pandemic that has taken its toll on Scotland’s economy. “The wrecking-ball of a dismal Brexit deal is compounding matters.
“So today’s Budget will help to bring much needed support and stability, to ensure our economy recovers and we protect those who have been hit the hardest.
“Fundamentally it focuses on three key priorities: creating jobs and supporting and investing in a sustainable recovery; responding to the health pandemic and tackling inequalities.”
