SCOTLAND’S BUDGET – A BOOST FOR THE ECONOMY?

House building now at its Lowest since 1947

Housing – a key part of the Scottish Budget

Delivering his Budget for the coming two years, Scotland’s finance secretary, John Swinney, said his spending plans would boost the economy.

John Swinney Finance Secretary
John Swinney
Finance Secretary
He told the Scottish Parliament that, despite having the money available to him cut by Westminster, there would be more cash for housing and he also promised to “limit the damage” faced by Scottish families cope as a result of the UK Government’s welfare reforms. Among the other details in the draft budget was money to pay for a national performance centre for sport. He added that the council tax freeze would continue and other universal benefits such as free prescriptions would also remain.

With just over a year to go before next year’s independence referendum, he used his 20-minute speech to emphasise that Scotland has “a highly skilled workforce, a long-standing reputation for innovation, a respected and recognisable brand, world-class universities and sectors and companies competing at the highest level across international markets. With the full decision-making powers of independence, I should, today, be able to present a budget that puts all of that economic strength to use in building a more prosperous and a more just Scotland. Instead, as a result of Westminster’s decisions, I must today present a budget constrained by significant cuts.”

Iain Gray Labour's Finance Spokesman
Iain Gray
Labour’s Finance Spokesman
Labour’s finance spokesman, Iain Gray, focused on the way the SNP Government has adopted a slogan before the announcement – “budget for independence” – which had been subsequently dropped. He dismissed the idea claiming that instead it was a “don’t-rock-the-referendum boat budget for a Scotland at a standstill on pause. Will he take this budget for independence away and bring back a real budget for jobs and a budget which banishes the bedroom tax from Scotland this year, next year and the year after as well?”

For the Conservatives, finance spokesman Gavin Brown said the budget would “penalise” businesses to the tune of almost £450m, under plans to increase the income from business rates from £2.4bn this year to more than £2.8bn in 2015-15.oday’s budget should have been about the economy – but as far as the economy is concerned, this is a budget that has both under-promised and under-delivered.”

Much of the comment on the Budget has focused on aspects of housing. For example, the chief executive of Homes for Scotland, Philip Hogg, welcomed additional spending on housing. However, he added that recent quarterly figures showed a 25% fall in housing completions across all sectors and starts slumping to their lowest figure on record. “Tackling this issue,” he said, “will require bold vision, commitment and action from all parties in order to halt the decline of what is a key national indicator.

Mary Taylor, Chief Executive of the Scottish Federation of Housing Associations (SFHA) said she was “encouraged at the commitment to investment in affordable housing, of over £1.35bn over four years. We understand that times are difficult for public sector investment within the recent spending review settlement, but there is no more important capital investment than housing as the cornerstone of healthy successful lives in Scotland. Investing in affordable housing is itself a form of preventative spend, helping to prevent costly public interventions, particularly in promoting health, well being and independent living.”

Graeme Brown Shelter Scotland
Graeme Brown
Shelter Scotland
The news about the Scottish Government’s decision to give financial help to those hit by the so-called “bedroom tax” led Graeme Brown, Director of Shelter Scotland, to say he was “delighted that the Scottish Government has listened to Shelter Scotland’s campaign and is making £20million available to help thousands more households in Scotland affected by the so-called bedroom tax. This is a victory not only for supporters of Shelter Scotland’s Banish the Bedroom Tax campaign, but for the people suffering hardship who will benefit from this move. We hope that local authorities across Scotland will act quickly to top up their discretionary housing payments budget so that the maximum number of people this year can be helped.

From the business point of view, the main reaction came from CBI Scotland. Its assistant director, David Lonsdale, accepted that the Budget contained “a number of positive announcements on affordable housing, digital technology and the local carbon economy. We also welcome the continued council tax freeze and the decision not to use the Scottish Variable Rate.

“However the Budget,” he went on, “was a missed opportunity to introduce an air route development fund in order to establish more direct links with key overseas business destinations, and to signal a fresh direction on public service reform through contracting-out the delivery of a wider range of public services to the private sector. The lack of a moratorium on any new or additional rates levies is disappointing, not least as Scottish Ministers have already introduced £131 million of extra rates this past year with their levies on larger retailers and firms with empty properties.”