How Scottish Budget will affect you

Scotland’s finance secretary has unveiled her £35 billion spending plans, which she says will get people, businesses and services “back on their feet”.

But Kate Forbes left many taxpayers facing the prospect of higher bills and cuts to local services in the Budget for the year ahead.

Business leaders were also “underwhelmed” by the package of support on offer.

And Ms Forbes gave little away on the future of the A9 and A96 dualling programmes.

Here’s how the main spending commitments are being spread out across the regions, and how they will affect households already dealing with a legacy of lockdown and economic pressure.

Key measures include: Local authorities will be given full “flexibility” to raise council tax.

Higher earners are set to pay more in income tax.

Businesses will continue to get rates relief in key sectors.

Record funding of £18 billion will go to health and social care services.

Adult social care staff will get a £10.50 minimum wage.

Ms Forbes said the Scottish economy is now expected to recover to prepandemic levels by April to June 2022, almost two years earlier than previously forecast. Council taxes set to rise Ms Forbes handed local authorities “complete flexibility” to set council tax rates, ending the previous freeze.

Budget papers say: “In setting council tax rates, we expect councils to take full account of local needs and of the impacts on household budgets of the decisions they make.”

Council funding, excluding cash related to the pandemic response, is due to rise from £11,124.5m

to £11,145.4m. But that is significantly below the £700m uplift local government chiefs said they needed simply to “stand still”.

Conservative MSP Liz Smith warned: “The SNP have quietly opened the door to massive council tax rises next year.”

Higher earners will pay more tax

Ms Forbes said income tax rates next year would remain “unchanged”.

The starter and the basic rate bands will increase in line with inflation, while the higher and top rates would remain frozen at current levels.

Freezing the higher rate threshold raises an additional £106 million in revenues in 2022-23.

The government said no taxpayer – on their current income – would pay more Scottish income tax in 2022-23 than they did in 2021-22.

Those earning less than £27,850, which is 54% of Scottish taxpayers, will pay slightly less income tax in 2022-23 than if they lived elsewhere in the UK.

relief

Business rates continues, for now

The government had been under pressure to continue tax relief for retail, hospitality, leisure

and aviation businesses, which paid no nondomestic rates in 2021-22.

But they were left “underwhelmed” when Ms Forbes said these sectors would get 50% relief for just the first three months of 2022-23, capped at £27,500 per ratepayer.

Early support for shift from oil and gas

The budget included just £20m of the £500m Just Transition fund for the north east and Moray, which will be used to help identify “key projects” in the move away from reliance on fossil fuel jobs.

It was the first Snpgreen Budget too.

The government is still on track with roads infrastructure. Despite concerns, the SNP have left “wiggle-room” to keep Green partners happy.

Other plans include £414m for energy efficiency, and low carbon and renewable heat.

The health service

Record funding of £18bn for health and social care, including extra spending of £1bn.

To address staff shortages in social care, £200m will be used to help deliver a £10.50 minimum wage.

The overall package also provides £1.2bn for mental health.

Nicola Sturgeon and Kate Forbes.