FINANCE Secretary Shona Robison has set out her first Scottish Budget.
She said ahead of the announcement it would be one of the “most challenging” Budgets since devolution amid high inflation and an estimated £1.5 billion black hole.
During her statement, Robison said Scotland is at the “upper limit of mitigation” of UK Government policies and, while it would always do the best it could with the powers available, there "is no substitute for independence".
She added the UK Government's block grant had fallen in real terms by 1.2% since 2022/23.
New income tax band
Robison has confirmed there will be a new income tax band of 45% introduced for those earning more than £75,225.
The top rate of tax, levied against those earning more than £125,000, will also rise by 1% next year to 48%.
In other areas of tax, the three lowest rates will see no increase to their rates while the starter and basic rate bands will increase by the level of inflation.
She has also said the Scottish Government will "fully fund" a council tax freeze, providing local government with the equivalent of a 5% rise and "delivering over £140 million of additional investment for local services."
Social security
The Budget includes a £6.3bn investment in social security benefits and payments, an increase of £1bn compared to 2023/24.
The Scottish Child Payment will be brought up to £26.70 a week from April 2024 and school meal debt is to be wiped out with a £1.5m one-off fund for councils.
There will be £43m invested in estate upgrades to the education sector which will facilitate an expansion of free school meals for primary 6 and 7 schoolchildren.
Business rates
Business rates for premises valued at less than £51,000 will be frozen in Scotland while hospitality businesses in Scotland’s islands will be given 100% relief.
The small business bonus scheme will also continue while the Government will assess how valuations for business rates are carried out.
Robison confirmed 100% relief would be provided for island hospitality properties capped at £110,000 per business.
NHS
Funding for NHS boards will rise by £550m – or 4.3% – the Deputy First Minister told MSPs.
The Deputy First Minister said this would help the NHS "evolve its delivery of services and work to improve waiting times".
'Social contract'
Robison said the "social contract" with the people of Scotland was at the heart of a Budget she said "reflects our shared values as a nation and speaks to the kind of Scotland we want to be".
She told the chamber: “This is a government committed to equality through tackling poverty and protecting people from harm.
"At the heart of this budget is our social contract with the people of Scotland where those with the broadest shoulders are asked to contribute a little more.
"Where everyone can have access to universal services and entitlements – and those in need of an extra helping hand will receive targeted additional support.
"This is what we mean when, in the face of Westminster austerity, we say we will always stand up for Scotland.”
The Scottish Government received criticism from opposition parties for making cuts to the housing budget, with spending set to fall by more than £200 million for the next financial year.
The total amount spent will go down from £738.3m in 2023/24 to £533.2m in 2024/25.
While devolution has brought benefits to Scotland, the Deputy First Minister said the Government was “fighting austerity with one hand tied behind our back”.
She said at the end of her speech that the Scottish Government would continue to do the best it could with the powers it has, but warned it was at the "upper limit on mitigation" of UK Government policies.
"We cannot spend money we do not have and we can’t mitigate every cut made by the UK Government," Robison said.
"We are at the upper limit of mitigation that can be provided within the devolved settlement.
"We will always do our best with the powers we have but there is no substitute for independence. We have always said that to truly transform our economy, society and public services, we need the full powers of independence and to retake our place in the EU."
Robison said the Scottish Government remains committed to investing "£1bn over the course of this parliament to tackle the poverty-related attainment gap."
Other announcements
Other key announcements included an investment of £220m in active travel, £358m to accelerate energy efficiency upgrades and installation of clean heating systems, and £129m to maintain and restore peatlands.
Almost £400m will be made available to support the fire service while the Scottish Government will invest £1.55bn in policing in 2024/25, increasing the Scottish Policing Authority resource budget by 5.6%.
Robison added the Scottish Prison Service will see an investment of £38.6m to its resource budget.
