Budget 2021-22

– in the Scottish Parliament at on 28 January 2021.

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Photo of Linda Fabiani Linda Fabiani Scottish National Party

Good afternoon, everyone. I remind members that social distancing measures are in place in the chamber and across the campus.

The next item of business is a statement by Kate Forbes on the Scottish budget for 2021-22. The cabinet secretary will take questions at the end of her statement, so there should be no interventions or interruptions.

Photo of Kate Forbes Kate Forbes Scottish National Party

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 life lost has been a tragedy. Livelihoods have been upended, and front-line services have responded in remarkable ways.

Of course, our collective fight to overcome the virus continues. The exceptional circumstances require an exceptional response. The budget provides for continuity in our urgent work to control the virus and to protect our economy and national health service while the vaccine is delivered as quickly and 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.

Today’s budget will bring much needed support and stability to ensure that our economy recovers and that we protect those who have been hit the hardest. Our approach continues to target support in the immediate term, as well as tracking a course over the coming year to build a fairer, stronger and greener economy. Fundamentally, it focuses on three key priorities: creating jobs and investing in a sustainable recovery; responding to the health pandemic; and tackling inequalities.

This is a time of great fiscal uncertainty. In the absence of a United Kingdom budget, much of the information that we need in order to plan with certainty is missing. We must persevere with a budget that is based on a partial settlement while we are left waiting until the UK budget to see the full hand that is being dealt to us.

I have repeatedly welcomed the additional—largely borrowed—Covid funding that the UK Government has provided, and I do so again. However, I have a duty as Cabinet Secretary for Finance to make the case forcefully when I believe that more is required. There is £21 billion sitting in the UK Covid reserve. Our share of that funding would help to meet the on-going needs of our businesses and our NHS and other public services.

In the interests of providing certainty, and based on the balance of consequentials that have been received to date, I have made a prudent funding assumption and allocated £500 million against what we expect to flow to us from the Covid reserve next year. That will make the budget process more transparent and aid parliamentary scrutiny of our funding decisions. This week, I have written to the Chancellor of the Exchequer to set out the Scottish Government’s priorities for the UK budget and to seek clarity and flexibility on several matters of importance to Scotland.

Given the particular interaction between this year’s and next year’s budgets, I will touch on the 2020-21 position as we approach the end of the financial year. Last month, I set out how Covid funding was being allocated in full. Following my assessment of the latest position, and confirmation of an additional £400 million of consequential funding, I have already confirmed the following further funding for 2020-21: £300 million for business support, including payments from the strategic framework business fund to the end of this financial year; one-off top-ups to grant support for hospitality, retail and leisure businesses; comparable support for island businesses; and increased funding for the taxi and wedding sector funds. There is also £85 million for education recovery and £30 million to address university student hardship.

On Monday, councils paid out millions of pounds in framework funding and sector top-ups—significantly more than the figures that were published earlier this month. Since boxing day, payments have been made to tens of thousands of businesses. That builds on the 383,000 business awards, valued at more than £2.3 billion, that have been made since the beginning of the pandemic. Alongside that, we are filling the gaps in support through sector-specific funding, with funding now available for taxi drivers, brewers, travel agents, indoor football clubs, events businesses and a variety of businesses in the wedding sector, from florists to photographers.

I know that businesses will continue to need support for as long as they need to close, and they want certainty about the future. I can confirm today that the strategic framework business fund will continue to support businesses beyond the end of this financial year, should funding from the UK Government be forthcoming.

I can confirm two further measures: a doubling of the discretionary fund for local authorities to £60 million—to distribute as they wish—and a commitment to pay February grants at level 4, irrespective of what levels are confirmed during the next month.

Local government has been at the forefront in distributing grants, supporting communities and responding to the pandemic. Last year, the Scottish Government and the Convention of Scottish Local Authorities agreed the details of a scheme, which was then estimated at £90 million, to compensate councils for loss of income from sales, fees and charges due to the pandemic. Today, I am increasing that allocation to £200 million. When added to the £49 million previously announced, the total support for councils’ losses this year is now up to an additional £249 million. I am writing to the Finance and Constitution Committee today with the full 2020/21 allocation details, which confirm that every single penny has been allocated.

Yesterday’s gross domestic product figures show that, as a result of the restrictions that we have had to put in place to control the virus, our economy is now 7.1 per cent smaller than it was pre-Covid, while over the same period the United Kingdom economy has shrunk by 8.5 per cent. We have largely tracked the rest of the UK economy over the course of the pandemic, with a negligible difference in labour market and GDP statistics, but yesterday’s figures suggest a widening gap in the impact on the Scottish and UK economies.

The Scottish Fiscal Commission’s forecast, which was published today, shows a difficult outlook. The current lockdown measures to suppress the new Covid variant will likely reverse some of the fragile economic recovery that was seen during the summer, with GDP forecast to fall by 5.2 per cent in the first quarter of 2021. The vaccine roll-out and the anticipated easing of measures mean that the economy is expected to return to growth across 2021-22 as a whole. However, the commission still expects longer-term damage and does not expect GDP to return to pre-pandemic levels until 2024.

The SFC also forecast unemployment to increase to 7.6 per cent in quarter 2 of this year. In line with current, announced UK Government policy, that forecast is based on the assumption that the job retention scheme ends at the end of April without a replacement. I do not underestimate either the cost or the benefit of the job retention scheme, but that is a stark reminder that if the scheme ends prematurely, the impact on jobs and livelihoods will be severe. The chancellor must extend the job retention scheme, and he must do so before the UK budget in March in order to give businesses sufficient time to plan ahead, because good jobs and viable businesses depend on it.

Members will note that the projections that the Scottish Fiscal Commission published today take into account the current period of lockdown. The most recent UK projection is from November and does not reflect the current lockdowns across the UK. That timing difference will inevitably cause some challenges for our budget through the fiscal framework. However, as Richard Hughes from the Office for Budget Responsibility said to the Finance and Constitution Committee yesterday, UK GDP fell by less than expected in November, which suggests that we have become better adapted to dealing with lockdown conditions.

However, the latest restrictions will inevitably have an impact on the economy. The updated SFC projection for Scotland sees growth fall in the first quarter of this year, whereas the OBR forecast growth in its November publication. That difference does not reflect a difference in our underlying economic performance; rather, it reflects differences in timing. It will likely disappear when new OBR projections are published in March. However, that means that the technical conditions under the fiscal framework for the release of additional reserve and borrowing flexibilities following an economic shock have been met. The UK Government has confirmed that those flexibilities are now available to me, and I will use them to support our recovery from Covid-19.

Those extra flexibilities are welcome, although they are constrained and temporary. They do not change the fact that the Scottish Government cannot borrow at its own hand to fund spending in response to Covid-19 or support the economy in the way that countries around the world have done.

This is a time for certainty and stability, and for helping businesses and households as far as we can. With limited resources, we must target those who need our help most. I am delivering the stability and certainty that taxpayers need, with targeted support for individuals and businesses that are most impacted. This package of tax measures that will support our recovery and renewal.

Significant changes to Scottish income tax were implemented in 2018-19 to deliver a fairer and more progressive five-band system. That structure will remain unchanged, with the starter, basic and higher rates bands all increasing by inflation. The top-rate threshold will remain frozen at £150,000. That will see all Scottish taxpayers pay slightly less income tax next year than they will this year, based on their current income. In addition, a majority will continue to pay less income tax than they would if they lived in other parts of the UK. Alongside record investment in public services, that is a key part of making Scotland an attractive place to live and work.

On land and buildings transaction tax, the temporary change to the residential nil rate band that was introduced in July supported the housing market at a difficult time and contributed to a robust recovery throughout the year to date. The housing market re-opened in June and has continued to operate uninterrupted since then. That change was always meant to be temporary. The ceiling of the nil rate band will return to £145,00 from 1 April, as intended, with no other changes to rates or bands.

However, first-time buyer relief will remain in place, saving first-time buyers up to £600 and meaning that an estimated eight out of 10 first-time buyers will pay no tax at all. The additional dwelling supplement rate will remain at 4 per cent. However, recognising the long-standing calls for change, we intend to consult on reforms to the ADS early in the next session of Parliament.

Non-residential LBTT rates and bands remain unchanged. Finally, the standard rate of Scottish landfill tax will rise to £96.70 per tonne and the lower rate will rise to £3.10 per tonne.

At a time when the people of Scotland are dealing with significant economic and social impacts of the pandemic, those tax policies deliver certainty and stability. Based on the most up-to-date forecasts from the SFC and the OBR, the net contribution from devolved taxes in 2021-22 to the Scottish budget will be £539 million. In addition, we have used our limited borrowing and reserve powers to their maximum effect. In total, that means that the Scottish budget will be more than £1.7 billion bigger than it would otherwise have been.

We have always been rightly proud of the world-class care provided by our national health service, but during the pandemic, in the toughest circumstances imaginable, our inspirational NHS workers have worked tirelessly. When the history of the pandemic is written, our NHS and social care staff will be recognised as the undisputed heroes they are. I am sure that I speak for everyone in the chamber—indeed, everyone in the country—when I offer them our heartfelt thanks.

To support their efforts in 2021-22, we will invest more than £16 billion in the health and sport portfolio, which is an increase of more than £800 million to the core budget. There will be an additional £869 million to support our response to Covid-19, including our vaccination and test and protect programmes; it includes investment in primary care of £1.9 billion; and it will bring our total investment in social care and integration to more than £883 million in 2021-22.

I want to draw attention to two critical elements of the health budget. First, we will provide funding of £145.3 million in 2021-22 for alcohol and drugs, which is an increase of £50 million on this year, specifically for our national mission to reduce drug deaths as part of a five-year £250 million commitment. Secondly, we know that the pandemic has taken a huge toll on mental health, so next year’s investment in mental health will exceed £1.1 billion. That will underpin our continued approach to improving mental health services and support for children, young people and adults, including child and adolescent mental health services.

The social harms of Covid-19 have exacerbated poverty and inequality, highlighting the importance of driving progress towards our statutory targets to reduce, and ultimately eradicate, child poverty by 2030. We are delivering a direct programme of action to meet those targets across the period from 2018 to 2022, backed by the £50 million tackling child poverty fund, which this budget confirms we will deliver in full.

The ambitious use of our new welfare powers to tackle child poverty includes significant investment in our game-changing Scottish child payment of an expected £68 million in 2021-22, with payments starting next month. That is part of a total of almost £3.6 billion for social security.

Our public sector pay policy will continue its progressive and restorative approach, which is focused on addressing low pay. The UK Government’s ill-judged pay freeze has a material impact on our block grant, within which we must balance the reward and affordability of public sector pay. We will continue to adopt the real living wage, applying the increased rate of £9.50 per hour and guaranteeing a minimum 3 per cent increase for people on salaries of up to £25,000 via a £750 cash underpin. People on higher salaries will receive a 1 per cent rise, capped at £800 for those on more than £80,000.

Negotiations are under way in our NHS on the future of agenda for change, and I will work with the Cabinet Secretary for Health and Sport to deliver for our NHS workforce.

The most enduring way to tackle inequality and break the intergenerational poverty cycle is, of course, through education. In 2021-22, we will provide £2.7 billion across the education and skills budget to deliver on that ambition, alongside the significant funding for education that will be delivered through the local government settlement. That includes almost £1.9 billion for the Scottish Funding Council, to fund our university and college sector, with £700 million for colleges and more than £1.1 billion for universities. It is vital that we continue to invest strongly in our world-class institutions and that we provide students with the best opportunities.

On justice, the budget provides significant extra funding to help to deal with the backlog in criminal justice case loads that the pandemic has caused. We will provide a total funding settlement of £1.3 billion for the Scottish Police Authority, including an uplift of £60 million in the resource budget—surpassing our commitment to deliver a £100 million boost by 2021 and eliminating the deficit in the police budget.

Keeping public transport options open remains vital to our recovery and will be backed by investment next year of more than £1.6 billion across bus and rail services. That will help to ensure a viable alternative to private transport for more people, further reducing our reliance on cars, providing a cleaner form of mass transport and promoting the wide benefits of our ambition for 20-minute neighbourhoods. We will also deliver a national concessionary travel scheme of free bus travel for under-19s in the coming year.

We will continue to support transformational change to our streetscapes, with a five-year commitment to maintain the active travel budget at a record high of £100.5 million per year.

I said earlier that local government had been at the forefront of our response to Covid. I remain extremely grateful to local government colleagues, many of whom have worked night and day to manage grant funding and welfare support and to maintain statutory services throughout lockdown. We will make available to local government a total funding package amounting to £11.6 billion for 2021-22, including a £245.6 million increase in core revenue funding and an additional £259 million of non-recurring Covid funding. That is total additional revenue funding of more than £0.5 billion.

Within that, the settlement includes additional funding of £59 million to complete the expansion of early learning and childcare to 1,140 hours; £72.6 million for investment in health and social care; and £7.7 million to support the interisland ferries in Shetland, Orkney and Argyll and Bute, meeting their revenue ask in full as well as extending the timetable and road equivalent tariff on Orkney’s interisland ferries.

This settlement allows councils to join us in financially supporting households, who will undoubtedly be struggling as a result of the social and economic impacts of the pandemic. Just as we have chosen not to increase tax rates, ensuring that people pay no more than last year, I have taken the significant step of offering funding to councils that choose to freeze council tax, thereby providing financial reassurance to families who are struggling. That additional funding is equivalent to £90 million for councils or a 3 per cent rise, with inflation at 0.5 per cent, which more than fully compensates local authorities that choose to freeze council tax.

That takes the increase for core revenue services to £335.6 million and, when added to the non-recurring Covid funding of £259 million, provides a total increase for local government of £594.6 million in 2021-22. I have also confirmed a further increase of £110 million over previously announced plans for the lost income scheme for local government.

While the pandemic’s profound effect on our economy requires constant support, it also requires us to plan and deliver a strong, fair and green recovery in the long term. The future of our public services depends on the resilience and strength of our economy so, if this budget must achieve anything, it must set the groundwork for economic recovery.

Today I set out a plan to deliver that—a plan that provides for on-going business support, tackles unemployment, helps businesses to emerge stronger and invests in long-term growth. Leadership matters, and our enterprise agencies must have the resources that they require to play a leading role in the recovery. The collective resource budget for the three enterprise agencies in the Highlands, the south of Scotland and across Scotland will increase by more than 12 per cent.

The budget builds on the significant package of labour market interventions, with a total investment of £1.1 billion in employability and skills support. That includes an initial additional investment of £125 million for the young person’s guarantee, the national transition training fund and broader skill and employability support. The young person’s guarantee will help to achieve our ambition that, within two years, every young person will have the opportunity to study, to take up an apprenticeship, job or work experience or to participate in formal volunteering.

Today’s budget allocates £230.9 million to Skills Development Scotland to work with partners across that vital agenda, and it marks the launch of the first phase of our five-year £100 million green jobs fund and a commitment to establish a green jobs workforce academy.

Across Scotland, we will invest more than £230 million to ensure that our diverse and evolving cultural heritage is valued, nurtured and celebrated, protecting thousands of jobs in the culture and heritage sectors.

We must invest for growth. The infrastructure investment plan, which will be published in full next week, will outline a pipeline of projects to drive Scotland’s resilience, driving inclusive, net zero and sustainable growth. The plan will be key to the success of the national mission for jobs, offering a robust pipeline of work that will help stimulate the green recovery, providing good jobs, stimulating supply chains and building market confidence.

The capital spending review will set out budgets for five years, confirming that we will deliver our national infrastructure mission in full, increasing annual investment in infrastructure by £1.5 billion by 2025, supporting 45,000 full-time equivalent jobs across the period. Those efforts are enhanced by the work of the Scottish National Investment Bank, which we will capitalise with £2 billion, with more than £200 million for investment in 2021-22.

Next year, we will provide funding of £210 million for cities investment and strategy. That will continue our work with regional partners to progress all deals that are not yet in delivery, with the aim of concluding full deals for all regions, urban and rural, by the end of 2022.

Covid has further underlined the value of a safe, secure and affordable home, and our homes are also now somewhere that many of us work from. We are providing more than £800 million for housing in the budget. Building on our achievement of having delivered almost 97,000 affordable homes since 2007, I am allocating funding of more than £711 million to the affordable housing supply programme.

Capital investment will inject confidence in our economy, and it will help to meet our statutory commitment to be a net zero society by 2045. Our carbon taxonomy shows that nearly 37 per cent—more than £1.9 billion—of our capital investment is low carbon. As we look to Glasgow hosting the 26th conference of the parties—the COP26 summit—in November, we want to inspire global action and demonstrate that Scotland is a world leader in green and renewable technologies.

The programme for government and our recent climate change plan update together outlined a £2 billion low-carbon fund over the next parliamentary session, central to which is investment of almost £1.6 billion in heat and energy efficiency in our homes and buildings. Through the fund, we will also begin a five-year £50 million programme of investment to regenerate Scotland’s vacant and derelict land, which will help put abandoned land to use across our communities. That will include creating community gardens to nurture wellbeing, provide a local food supply and improve biodiversity, and creating space for community renewables projects, low-carbon affordable housing, urban farms, and woodland and green spaces.

I strongly believe in investing in economic recovery in every part of the country, including rural areas. Recognising the acute impact of the pandemic on our rural communities, we will double the rural tourism infrastructure fund, helping tourist attractions and communities to make improvements to cope with increased visitors.

Our £801 million investment in agricultural support will offer much-needed stability to our farmers, crofters and land managers, and help ensure that our agriculture sector plays a leading role in our transition to net zero. Over the next five years, an additional £150 million has been allocated for woodland and forestry through the low-carbon fund, supporting a 50 per cent increase in tree planting and woodland creation, from 12,000 hectares this year to 18,000 hectares by the middle of the decade. Our peatland restoration spend will increase by 10 per cent as part of a 10-year £250 million commitment.

Digital connectivity was important pre-pandemic, but now, as a result of the changes in how we work, shop and socialise due to Covid-19, it is absolutely fundamental to our future prosperity. The review that I commissioned from Mark Logan has provided an industry-led blueprint to establish Scotland as a world-class hub for tech start-ups, and it has rightly drawn wide acclaim.

To help deliver that ambitious agenda, we are providing an additional £7 million next year. To bring more people into the digital world, we will invest almost £100 million in digital connectivity. That includes funding for our reaching 100 per cent programme and for improved mobile coverage through the delivery of 4G and 5G infrastructure, ensuring that no part of Scotland is excluded.

The last piece of the plan to support businesses and drive economic recovery is our policy on non-domestic rates. I know how crucial this year’s targeted 100 per cent relief from non-domestic rates has been to retail, hospitality and leisure businesses. The extension of that relief to avoid a cliff edge in support was the number 1 ask of businesses. The absence of clarity on UK Government NDR policy has undermined our ability to continue that relief. I have been clear that the only way that I can replicate that relief in full is if there is additional funding from the UK Government.

The UK spending review provided £11.5 million as a result of NDR policy decisions. Contrasted with the more than £900 million that it would cost to extend the relief, those consequentials are entirely insufficient. However, I cannot and will not leave Scottish businesses trying to plan without certainty. I therefore commit to extend the 100 per cent relief for retail, hospitality and leisure businesses for a further three months into 2021-22, funded from the money reimbursed by supermarkets and other retailers.

I continue to urge the UK Government to bring forward an extension to its equivalent relief and, should it do so, I will use the funding generated to match its extension. Together with other reliefs, including the expanded fresh start scheme to incentivise the use of empty buildings and the small business bonus scheme, we are offering a total relief package worth almost £1 billion in this budget—and there is still more that I want to do to help our businesses.

The UK and Welsh Governments have frozen their non-domestic rates poundage. I do not intend to do the same; instead, in an unprecedented step in a non-revaluation year, I will reduce it to 49p. That will be the lowest poundage available anywhere in the UK, saving ratepayers more than £120 million compared with previously published plans. Let nobody doubt that this is a Government that listens and acts when it is most needed.

We have been through so much as a country. Our recovery may be long, and it will be hard—and we cannot guarantee that there will not be more tough times ahead. Throughout these dark times, however, we have never given up hope for a better future and for a healthier, greener and fairer society. Now, with large-scale vaccination that focuses firstly on the most vulnerable, there is some light at the end of the tunnel. This budget seeks to build on that hope and, by focusing on how we continue to protect, recover, rebuild and renew our country, to make that light at the end of the tunnel shine that bit brighter.

The Deputy Presiding Officer:

The cabinet secretary will take questions on the issues that were raised in her statement. Those members who wish to ask a question should press their request-to-speak buttons.

Photo of Murdo Fraser Murdo Fraser Conservative

I thank the cabinet secretary for advance sight of her statement, and I take the opportunity, on behalf of Conservative members, to congratulate her on the recent happy news of her engagement. It is good to see her recognising the benefits of being in a union.

Our view is clear that we need a budget that focuses 100 per cent on management of the pandemic and our economic recovery, thereafter. We will measure all the announcements in the budget today against the essential test of whether they will assist efforts in that respect and, in particular, whether they will help to protect jobs and safeguard our economy over the coming year. We will reject any plans to waste precious resources—money or time—on a campaign for another divisive independence referendum, because we need a budget that is about building up, not breaking up.

The background to the budget is that the Scottish Government has had unprecedented support from the UK Treasury over the past year. We have a guaranteed minimum additional spend of £8.6 billion in the current financial year to support the NHS and individuals and businesses across Scotland, which is in addition to the billions in direct support that have been provided through the furlough scheme and other Treasury initiatives.

With all that money, it is essential that the Scottish Government gets the cash out the door to needy businesses and individuals across Scotland who have cried out for it. That support carries forward to next year, with an additional £1.3 billion to help to manage the pandemic, and a £1.1 billion increase in the general budget.

Even without additional Covid resources, the budget for the coming year will be the highest in the history of devolution, and will give the Scottish Government more money to spend than at any previous point in history. All that help is possible because of the broad shoulders of the UK Government, which supports the people, businesses and public services of Scotland in these challenging times.

Unlike Governments in so many other places in the world, the Scottish Government’s income is protected through the fiscal framework, which means that as long as tax revenues in Scotland perform in line with those elsewhere in the UK, no cuts will be required in the budget.

When it comes to the detail of the budget for the coming year, we have been clear that there should be no new income tax rises. The consumer spending that will follow the easing of restrictions will be a major driver in future economic growth, so any income tax increases would hold back that recovery. In that respect, today’s announcements on income tax are welcome, although we are only at the first stage of the budget process.

We need provision of Covid support for businesses into next year, assurances that relevant business grants will continue for as long as restrictions remain in force and a guarantee that the existing 100 per cent rates relief for leisure, hospitality and retail businesses will continue not just for three months, but for 12. The Scottish Government has already been given the funds to make that happen, and it should be an absolute priority for its budget.

We know that the pandemic has put further strain on our councils as many individuals, families and businesses have become dependent on their services. We have set out our view that we need fair funding for our councils, such that they receive a set proportion of the Scottish Government’s budget. For years, the Scottish National Party has underfunded local government to finance its own priorities, so we need the percentage increase in local government finance for next year to at least match the Scottish Government’s own budget increase, in order to start the process of moving towards fairer funding. From today’s announcement, that increase appears to fall short of that ask.

Finally, this is not the time to waste Government resources on preparation of another independence referendum bill.

The Deputy Presiding Officer:

Could you please come to a close?

Photo of Murdo Fraser Murdo Fraser Conservative

All the Government’s resources need to be devoted to tackling the pandemic and its economic consequences—not wasted on constitutional divisions. The budget process is a chance for the Scottish Government to put aside its party political priorities and act in the national interest. That will be the test of whether the budget delivers for Scotland.

Photo of Kate Forbes Kate Forbes Scottish National Party

I thank Murdo Fraser for his kind wishes at the beginning of his statement.

Murdo Fraser mentioned wasting time. I am standing here delivering a budget that will invest £1.1 billion in skills, £6 billion in capital infrastructure and £3.5 billion for social security and welfare payments. Meanwhile, of course, his leader is breaking the spirit of the rules on essential travel—to do what? Apparently, it is to make the case for the union, as he is running scared because after poll after poll shows support for independence.

On the substance, I said in my statement that I am grateful for the additional funding. Financially, of course, the UK Government has engineered our dependence and reliance on it by denying us reasonable borrowing powers. It is insulting people’s intelligence to suggest that Scotland could not borrow—as every other country round the world can—to intervene.

However, if the Tories want to claim full responsibility for the economic interventions, they must also take responsibility for the dithering on and delays to the extension of furlough, for the huge delay right now to extending non-domestic rates relief and for the potential for increased unemployment in April if furlough is not extended.

Murdo Fraser’s last point was about the additional funding. Some £1.3 billion has been confirmed in the UK spending review. That is to cover health, transport and jobs. We know that the extension to non-domestic rates relief for a full year would cost £900 million. The UK Government is sitting on £21 billion of announced but undistributed Covid funding. Therefore, if the Tories want to extend that relief for a full year, they should ask their party leaders in Westminster to release that £21 billion. As soon as I have confirmation that it has been released, I will most certainly extend non-domestic rates relief.

Photo of Jackie Baillie Jackie Baillie Labour

I, too, congratulate on behalf of the Scottish Labour Party the cabinet secretary on her engagement. That is, indeed, a bright spot in an otherwise gloomy outlook.

We need a budget for economic recovery and a budget for jobs. We are heading for a huge economic crisis and a cost of living crisis such as has not been seen since wartime. I welcome the renewed focus on the economy, the extension of business rates relief and the reduction in rates poundage. I look forward to having further discussions on the budget, because I note that the Scottish National Investment Bank’s money has decreased. At a time when we should be focusing on economic recovery, that is disappointing. I also look forward to having further discussion on support for local government, which falls short of what is required.

On pay, there is no doubt that health and social care workers are putting themselves and their health at risk during the pandemic. The cabinet secretary described them as “heroes”: I could not agree more.

In her statement, the cabinet secretary talked about NHS staff, but I did not hear mention of social care staff. The people who work in social care are predominately female and are low-paid, earning £8 to £9 an hour. They have cared for our older and vulnerable people during this most difficult of times. Surely they deserve more than the living wage, surely they finally deserve to be properly valued and recognised by society, and surely they deserve £15 an hour, as has been called for by GMB Scotland. Will the cabinet secretary give social care workers that pay rise, which they deserve? If not now, when?

Photo of Kate Forbes Kate Forbes Scottish National Party

I thank Jackie Baillie for her good wishes.

She said quite a number of times that she welcomes elements of my statement. She also said that she looks forward to further discussion. Of course, this year, like every other year over the past four years, I look forward to working across party lines to secure agreement to the budget and to provide the stability that the public expect from us.

Jackie Baillie mentioned public sector pay. I was clear after the UK Government’s decision to freeze public sector pay that it had misjudged the public mood, and that it had misjudged the impact on, and the contributions that have been made by, our public sector workers. Therefore, I announced today a 3 per cent uplift for the lowest paid people, on salaries up to £25,000, and have confirmed that we will put in place the living wage.

Of course, the public sector pay policy that I have outlined does not cover all public sector workers, but acts as a reference point for the wider public sector workforce, including in respect of NHS agenda for change. I made it quite clear in my comments that I look forward to working with the Cabinet Secretary for Health and Sport on the agenda for change and the workforce deals, during the coming year.

Many social care workers operate in local government. Although we do not have a direct relationship with local government workers, our fair pay policy recognises their contribution, in addition to the material impact on our budget of the UK Government’s choice to freeze public sector pay.

The Deputy Presiding Officer:

We move to open questions. I have a lot of them, so I ask members to bear that in mind. We will try to get them all in.

Photo of Willie Rennie Willie Rennie Liberal Democrat

Even though the budget is bigger than ever before, by quite some margin, the Parliament has a duty to spend every single penny wisely and to put our recovery from the pandemic first.

I do not believe that the £1.1 billion of funding for mental health services will be enough. We previously asked for £1.2 billion—and that was before the pandemic hit, bringing with it the massive impact that it has had on such services. The budget is largely silent on getting our education system back up the international rankings and on the value of teachers. Our business support schemes have too many holes, and it is taking too long to get funds to businesses.

Will the finance secretary look again at those priorities in the discussions that we have planned?

Photo of Kate Forbes Kate Forbes Scottish National Party

I am delighted to hear that we have discussions planned. [


.] That is fantastic. I look forward to engaging with the Liberal Democrats to secure support for the budget. I will be very open to suggestions and ideas and will take a transparent approach to such budget engagements.

I had thought that Willie Rennie might welcome the increased funding for the Orkney and Shetland islands ferries, which shows what can be done when we work across the parties. The Liberal Democrats could have been quite powerful from the beginning on delivering for their constituencies had they taken a similarly constructive approach in previous years.

Whether our discussions might be on mental health services, education or business support, I will be happy to work with Willie Rennie.

Photo of Patrick Harvie Patrick Harvie Green

Once again, we are hearing commitments on a green agenda while the motorways and trunk roads budget goes up, as it has done relentlessly. There is no sign of the promised increase in the energy efficiency budget. The main new measure on public transport is one that the Greens secured a year ago, which the Scottish Government has not yet implemented.

The cabinet secretary seems proud that 37 per cent of our capital spending is low carbon, but as long ago as the 2016-17 budget the Government was criticised on the ground that the figure then was “only” 52 per cent. She is clearly keen to claim that her budget lays the groundwork for a green recovery. However, if that is to be meaningful, we need to do less of what is harmful and not just more of what is not. Can she point to any substantial example of high-carbon infrastructure that will now not go ahead in order to free up resources for greener priorities?

Photo of Kate Forbes Kate Forbes Scottish National Party

I point out that Patrick Harvie previously welcomed the Infrastructure Commission for Scotland’s decision to prioritise maintenance rather than replacement costs on high-carbon infrastructure, which accounts for some of the figures that we see before us.

I fully and whole-heartedly believe that the budget will deliver a green economy. If we look at the figures, we can see £2 billion of additional funding to decarbonise the ways in which we live, travel and heat; £100 million for the green jobs fund; and £100 million for active travel and increasing low-carbon transport. That approach lays the groundwork but, as I have done with the other party leaders, I say to Patrick Harvie that I am happy to work with him to consider what more we can do and how we can ensure that, in setting the framework for a green recovery, we are using our money as wisely and carefully as possible.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

I am pleased that the Scottish Government has committed to supporting 100 per cent business rates relief for at least the first three months of the new financial year. However, if such relief is to be available again in 2021-22 for the full year, there remains a significant financial gap to fill. I recognise the challenge that the cabinet secretary faces in balancing the books with a cash-limited budget. Does she agree that it is imperative that the UK Treasury commit to funding 100 per cent business rates relief at the earliest possible date, to give business the stability and certainty that it badly requires?

Photo of Kate Forbes Kate Forbes Scottish National Party

I know that businesses need as much advance notice as possible to make decisions for the next financial year and that is why, although I have been clear that we cannot afford an extension without the UK Government doing something similar for a year, I have used every penny at my disposal to at least provide an initial three-month extension, with the reassurance that, if there is a further extension by the UK Government, I will follow suit.

However, businesses cannot wait until 3 March to know about that extension and to have that certainty, as that would leave them only a matter of weeks before the end of their financial year. Therefore, although with this decision we go as far as we can, I strongly urge the chancellor to give that certainty to businesses now and not to delay or dither as he has done so often on extending furlough.

Photo of Maurice Golden Maurice Golden Conservative

Support for businesses is welcome, but one of the problems is that funds are not reaching businesses fast enough. It is often months between the SNP announcing a scheme and payments hitting bank accounts, which is a recipe for job losses and business closures. Therefore, will the finance secretary give an assurance to honour the original pledge that the SNP Government made to deliver payments within 10 working days?

Photo of Kate Forbes Kate Forbes Scottish National Party

I agree with Maurice Golden on the importance of money reaching businesses, which is why I am so pleased that local government has been paying out tens of millions of pounds this week alone for the strategic framework business fund grants of up to £3,000 every four weeks. The top-ups are being paid this month as well, with up to £25,000 for our bigger hospitality businesses, which are pubs or restaurants with a rateable value of over £51,000. A business in Scotland will receive £16,000 more than its English equivalent.

It is important to get the money out the door quickly and it is important that we work collaboratively with local government. That is why we have provided additional funding of £12 million to local government to help to distribute grants as quickly as possible. However, let us not take our eye off the ball—grants are being paid right now.

Photo of Emma Harper Emma Harper Scottish National Party

It is clear that the immediate impacts of Brexit have fallen disproportionately on Scotland’s rural economies, such as that of Dumfries and Galloway in my South Scotland region.

How will the budget ensure that no part of Scotland is forgotten or left behind?

Photo of Kate Forbes Kate Forbes Scottish National Party

We recognise the acute impact that has been felt by our rural communities, whether they are in Emma Harper’s constituency or in the Highlands and Islands.

I mentioned the doubling of the rural tourism infrastructure fund, which is something that I am particularly proud of, having seen the benefit that it has delivered in rural communities. However, across the rural economy, we have increased funding for forestry, for the enterprise agencies, for tourism and for food and drink, and we have ensured that there is additional Covid funding to support businesses in those areas, responding in particular to some of the tourism task force’s recommendations.

One challenge is that the replacement for European Union funding from the UK Government has fallen short. We continue to press the UK Government for more clarity on future funding for our farming and our fishing communities.

Photo of Alex Rowley Alex Rowley Labour

I do not doubt the enormity of the challenge that the Government faces at this stage, so I congratulate Kate Forbes on the budget. I hope that she will take seriously the offer from Jackie Baillie. There is no doubt that the most undervalued workforce in Scotland is the social care sector and I hope that the cabinet secretary will discuss with the Labour Party our proposal for £15 per hour for all social care workers.

Specifically on youth unemployment, the cabinet secretary talked about £230.9 million going to Skills Development Scotland to work with partners in that area. There are currently 36,000 young people who are unemployed. Is there a guarantee for those 36,000 people that they will get some kind of meaningful employment?

Photo of Kate Forbes Kate Forbes Scottish National Party

I thank Alex Rowley for that and I make that commitment to work across party lines.

Providing support specifically to young people is at the heart of our skills agenda. I talked about the young persons guarantee; there is also the national transition training fund. Our approach is to guarantee that over the next two years, every young person under the age of 24—leaving none behind—has a job, an apprenticeship or an education and training opportunity. I would be happy to go through the details with Alex Rowley or for my colleague Fiona Hyslop, who I see is here in the chamber, to go through the details with him on how we are ensuring that no young people are left behind.

Photo of George Adam George Adam Scottish National Party

Many businesses in my constituency of Paisley have had a difficult year, although they appreciate the funding and support that they have received to date. In the context of significant on-going spending on business support, much of which is demand led, managing the expenditure within the consequentials that are provided by the UK Government just does not seem sustainable. Does the cabinet secretary believe that the current fiscal levers that are available to the Scottish Government are sufficient to ensure that the Scottish Government can meet demand in future?

Photo of Kate Forbes Kate Forbes Scottish National Party

That point about the fiscal framework has actually now been recognised across the chamber. The cross-party Finance and Constitution Committee and independent stakeholders have recognised that the fiscal framework was already proving to be insufficient before Covid, and that the UK Government’s denial of any temporary fiscal flexibility to manage the volatility during the pandemic has compounded our financial challenge.

There is an opportunity to review the fiscal framework. Today, I announced that we will have some additional flexibilities next year. Those are welcome, but they are temporary and do not go far enough. For the sake of businesses and public services, it is important that we can manage the spending that we have available and do so in a flexible way.

Photo of Donald Cameron Donald Cameron Conservative

The cabinet secretary will be aware that UK Government support for the national health service during the pandemic has gone beyond the five-year forward view, with spending on the NHS in England due to increase by £6.3 billion next year. Can she confirm that the Scottish Government will pass on to the NHS in Scotland every penny of the Barnett consequentials arising from that funding?

Photo of Kate Forbes Kate Forbes Scottish National Party

The short answer to that important question is yes. The Scottish budget takes total health portfolio funding to in excess of £16 billion, which is an increase of more than £800 million. Over and above that, there is £869 million of funding to address pressures that are specifically related to Covid-19, for things such as vaccinations and test and protect.

Photo of Annabelle Ewing Annabelle Ewing Scottish National Party

The cabinet secretary will be aware of how important council leisure centres are for local communities, and that is the case in my constituency of Cowdenbeath. Will the cabinet secretary outline how the Scottish Government’s budget will support Fife Council and other local authorities to make up any funding gaps to ensure that those key community resources can continue to play their vital role in the months ahead?

Photo of Kate Forbes Kate Forbes Scottish National Party

That is an important question, because we know that, for local government, not only has there been an increase in demand, which has put pressure on services, but sources of income have been depleted as a result of lockdown measures. That is why it was essential that I announced today an increase in the lost income scheme from £90 million to £200 million. That was for the very purpose that Annabelle Ewing has outlined, and it adds to the previously committed £49 million of consequentials to support lost income for councils’ arm’s-length external organisations, for example. The overall local government settlement reflects the need to support day-to-day services as well as the additional Covid costs.

Photo of Sarah Boyack Sarah Boyack Labour

The Accounts Commission has identified a £767 million council funding gap as a result of the pandemic, and today’s budget announcement commits the Government to allocating £369 million of additional funding. Does the cabinet secretary accept that there is therefore still a gap of £400 million? Will she use this year’s Scottish Government underspend to ensure that councils do not start the year with even worse cuts to services than was the case last year?

I think that the cabinet secretary just announced a 3 per cent increase in pay for public sector workers. How will local authorities be able to afford that uplift, given the impact of Covid, the huge pressures on core funding last year and the years of cuts to the non-core services that will be vital for rebuilding our local economies?

Photo of Kate Forbes Kate Forbes Scottish National Party

Let me put one thing straight: there is no underspend this year. I have just allocated every penny of funding that we are looking to deploy just now.

The funding package for local government that I have just outlined includes additional funding for local government’s core revenue and core services, as well as additional funding to replace lost income and for Covid-related pressures.

However, again, when it comes to looking at the local government line or any other line, if the Labour Party wants to provide sensible, wise and intelligent proposals on what we can do to continue to support our public services, bearing in mind the need to manage the cost of any such proposals within the funding envelope that we have, I will be happy to have such conversations with Sarah Boyack.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

This morning, the Broadcasting, Entertainment, Communications and Theatre Union presented figures to the Culture, Tourism, Europe and External Affairs Committee that showed that, after the financial crash, the arts sector led the country out of recession in terms of growth. Will the cabinet secretary look at providing additional support for the sector to help it to survive, which would aid our economic recovery and boost wellbeing as we emerge from the pandemic?

Photo of Kate Forbes Kate Forbes Scottish National Party

Yes. Along with many other sectors, the arts sector has been hard hit. We have already put in place some immediate survival funding for parts of the sector, and we will look to continue to respond to its needs to ensure that we have a thriving sector that plays a key role in our recovery from Covid.

Photo of Elizabeth Smith Elizabeth Smith Conservative

When the cabinet secretary attended the Environment, Climate Change and Land Reform Committee on 6 October, she put on the record unequivocally that the creation of green jobs was a major Scottish priority. She said that the same was true a year ago. Obviously, she has outlined some major green policy spends this afternoon.

However, the facts tell us that the Scottish Government is way behind in delivering the 28,000 green jobs that Alex Salmond promised would be delivered by 2020. When will the budget deliver those very much needed jobs?

Photo of Kate Forbes Kate Forbes Scottish National Party

There are two things that we must look at here: first, unemployment is set to rise after the furlough scheme ends; and, secondly, we have an opportunity to invest in green recovery and ensure that we meet our climate change targets.

As well as providing the £100 million that I mentioned to support green jobs and support for the green jobs workforce academy to help with retraining and reskilling, the budget will ensure—whether by investing in biodiversity, or research and development, or supporting our public bodies that are at the forefront of that work—not only that we create those new green jobs, but that we have the necessary pipeline of talent by training young people in particular to have the skills that we need to meet our climate change ambitions.

Photo of Rona Mackay Rona Mackay Scottish National Party

Can the cabinet secretary advise how the budget will help to close the attainment gap?

Photo of Kate Forbes Kate Forbes Scottish National Party

The mission to close the attainment gap remains central to our plans; the pandemic has perhaps only exacerbated the need to provide support to the most vulnerable people in our communities.

On 13 January 2021, the Scottish Government published an equity audit, which deepens our understanding of the impact of Covid-19 on children from disadvantaged backgrounds and sets clear areas of focus for accelerating recovery. Those findings provide clear indicators for supporting children and young people in the next phase of remote learning, in particular, and planning the return to school.

We are continuing to invest in the Scottish attainment challenge in 2021-22. That includes more than £127 million in pupil equity funding to help to close the attainment gap.

Photo of James Kelly James Kelly Labour

Citizens Advice Scotland has recently highlighted rising levels of council tax debt. In recent cases that it has dealt with, there has been a debt level of £3,000 per case. That causes great anxiety and stress for people who are struggling to pay those bills.

What action will the Government take in the budget to address the specific issue of people who are struggling with rising levels of debt and who are unable to pay council tax bills?

Photo of Kate Forbes Kate Forbes Scottish National Party

The issue is one that we have been mindful of since the very beginning of the pandemic; in fact, one of the first funding decisions last March was the decision to provide additional funding to ensure that the council tax reduction scheme was extended. That commitment to continue to support communities carries us through into the next financial year.

We will continue to ensure that council tax reduction means that council tax is more progressive than it would otherwise be. In addition, today, I have outlined that we will compensate councils that choose to freeze council tax in an effort to help the very households that James Kelly has identified.

Photo of Mark McDonald Mark McDonald Independent

The reduction in poundage that the cabinet secretary has announced is welcome, but she will be aware that there are calls in the north-east for her to do more to offset the impact on businesses in Aberdeen of the 2017 revaluation. Only 23 per cent of businesses in Aberdeen are eligible for the small business bonus, which is the lowest proportion in Scotland. The cabinet secretary knows that I have asked her previously about flexibility around the nationally applied rateable value cut-offs for business support.

Will she meet me to discuss those issues and look at the possibility of a deal for the north-east of Scotland that will help to deliver for businesses in Scotland’s economic engine, which are hard pressed at the moment?

Photo of Kate Forbes Kate Forbes Scottish National Party

The short answer is that I will be happy to meet Mark McDonald. One of the decisions that has been taken is to extend the transitional relief that was provided to Aberdeen businesses because the revaluation has been delayed further. We hope that some of the reliefs that we have expanded will be helpful to Aberdeen businesses—in particular, the extension of the business growth accelerator and the fresh start scheme to encourage occupation of previously empty properties.

Photo of Willie Coffey Willie Coffey Scottish National Party

The requirement for our businesses to close in order to limit the spread of Covid has had a substantial impact on our town centres, not least in my constituency of Kilmarnock and Irvine Valley. Can the cabinet secretary provide any further details of the funding that has been allocated to help our town centres and business improvement districts to get back on their feet? Will she consider what more can be done to help our town centres in the longer term?

Photo of Kate Forbes Kate Forbes Scottish National Party

Our town centres have been hard hit. There were already structural challenges before the pandemic, and they have only been exacerbated. The budget provides £55 million in support of community regeneration, town centres and 20-minute neighbourhoods, in addition to our on-going support for Clyde Gateway as the initial investment that is backing delivery of our place-based investment programme. That builds on the £22 million economic stimulus and other funding that was provided for town centres, smaller settlements and business improvement district support last year.

Photo of Jamie Greene Jamie Greene Conservative

Our vital higher education sector made the clear and specific ask of the Government for £200 million to fully fund the Government’s policies. It has been given £18 million in the budget.

I also note that the Parliament voted by majority for at least 2,000 more teachers in our schools and roll-out of free school meals for all primary children, starting in the next financial year. I ask the finance secretary why none of those asks, including those that the Parliament voted for, have been honoured in today’s budget.

Photo of Kate Forbes Kate Forbes Scottish National Party

That might have been a good question if what Jamie Greene had said was true, but it is not. There is £45 million in the budget for increasing the number of teachers. Apart from that, I note, on the first part of his question, that we have provided over £1.1 billion to universities to support their continued financial sustainability, and we have increased funding to our colleges to £0.7 billion to ensure that they can continue to produce a highly skilled population. Both are key to our economic recovery.

Photo of Christine Grahame Christine Grahame Scottish National Party

I thank the cabinet secretary for her statement. I welcome the £259 million of additional non-recurring Covid funding for local authorities. I have two local authorities in my constituencyMidlothian Council and Scottish Borders Council. Will their allocations, when they get them, be ring fenced or will there be flexibility for councils to reflect their differences?

Photo of Kate Forbes Kate Forbes Scottish National Party

There will be flexibility. We have announced three parts to the local government settlement—the increased lost-income scheme, funding for the core settlement and additional funding for Covid-related pressures. That funding is flexible; local authorities can deploy it as they see fit, given their funding pressures.

Photo of Iain Gray Iain Gray Labour

I heard what the cabinet secretary said about the importance of our universities and colleges and how critical they are to economic recovery and recovery from the pandemic. However, the fact of the matter is that today’s budget leaves them hundreds of millions of pounds short of what they tell us they need just to be sustainable. Does the cabinet secretary understand that the budget is not investing in our world-class institutions, but is, rather, cutting the feet from under them?

Photo of Kate Forbes Kate Forbes Scottish National Party

We recognise the point that Iain Gray has made about sustainability challenges, and that is why we announced £75 million last year to help with it. The settlement includes resources to support our universities, including the increase in higher educatio n capital funding to further support research and knowledge exchange between universities. We have also boosted college resource allocations to ensure sustainability of that sector. That also includes funding for student support.

There is no doubt that our higher and further education sectors, like many other parts of the public sector, are under pressure. The budget goes as far as we can to provide support.

Photo of John Mason John Mason Scottish National Party

It is clear that finances will be tight in the coming years. I accept that the cabinet secretary does not want at the moment to change taxation because some people are struggling financially. However, other people and some organisations are doing quite well financially. Can the cabinet secretary expand on her thinking about taxation, going forward?

Photo of Kate Forbes Kate Forbes Scottish National Party

My view is that we should be delaying any fiscal consolidation or tax rises until economic recovery is well under way. That was outlined in “COVID-19: UK Fiscal Path”, which we published in June and updated in November. People and businesses need certainty and stability. The income tax policy proposals that I have put forward today will deliver that, as will the proposals on non-domestic rates and council tax.

It is a fair and progressive tax system to begin with. We are trying to provide sustainability for the long term, so that when we deliver economic recovery we can revisit our tax policies to ensure that they are aligned with economic growth at the time.

Photo of Rachael Hamilton Rachael Hamilton Conservative

The Scottish Government has dithered and delayed in getting guidance and funds to local authorities, which has prevented businesses from receiving financial support. When will the extra cash that is allocated in the budget for discretionary funding be in the hands of councils, with the relevant guidance and criteria, so that cash-strapped businesses can pay their bills?

Photo of Kate Forbes Kate Forbes Scottish National Party

The doubling of the discretionary fund relates to funding that local government has already. Local government has the guidance; in fact, there are only two important elements of guidance for the discretionary fund, because it is entirely up to local authorities how they distribute it. The two elements of guidance are that the funding goes to businesses and that it goes to businesses that have been hardest hit and have not had funding to date.

We have outlined the pipeline of business support schemes. Now it is up to local authorities to use it and to align it with local needs.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

Can the finance secretary provide an assurance that the budget will help families who are living in poverty, particularly in constituencies such as mine?

Photo of Kate Forbes Kate Forbes Scottish National Party

Tackling poverty is a key priority for the Government and it underpins our wider ambitions for a fairer and more prosperous Scotland. As was outlined in the most recent child poverty progress report, investment targeted at supporting households on low incomes reached almost £2 billion in 2019-20, with £672 million being targeted specifically to support children in low-income households. The budget for this year goes even further and includes £68 million for the game-changing Scottish child payment, which will benefit families in Stuart McMillan’s constituency.

Photo of Pauline McNeill Pauline McNeill Labour

The voluntary sector is embedded in our communities and provides a lifeline for families by providing food and doing so on shoestring budgets from so many funding streams. The cabinet secretary did not mention the voluntary and third sector, but I can see from the figures that the increase in funding for it is less than £2 million. The Scottish Council for Voluntary Organisations recently stated that 20 per cent of charities report critical threats to financial viability in the next 12 months.

Can the cabinet secretary outline how she sees the importance of the voluntary and third sector in the pandemic? Does she recognise the work that it has done so far, and can she clarify whether she will commit to funding the sector further, given the important role that it has played in the past nine or 10 months?

Photo of Kate Forbes Kate Forbes Scottish National Party

I reassure Pauline McNeill that I fully recognise the work of the voluntary and third sector in responding to the pandemic. Of course, that is why some of the first funds that we invested were to provide support to it. Significant funds have been invested from the communities package in spring, and from the winter package.

Pauline McNeill will have seen that the social renewal advisory board has published recommendations, which underline the importance of the third sector. We will continue to provide investment for it.

When it comes to the beginning of the next financial year and the potential for additional Covid funding, we will be sure to provide additional funding where it is needed most, including the third sector.

Photo of Fulton MacGregor Fulton MacGregor Scottish National Party

Nightclubs and soft plays are quite unique in that they have remained shut throughout the pandemic. If we are being realistic, we will know that they are the type of businesses that are likely to remain shut for a considerable time to come. I know from nightclub and soft play owners in my Coatbridge and Chryston constituency that the specific grants that were paid in November last year were very welcome. Has the draft budget factored in the possibility of a similar type of payment at some point in the future, should it transpire as is expected that those types of businesses will, because of their very nature, remain closed for an extended period of time on essential public health grounds?

Photo of Kate Forbes Kate Forbes Scottish National Party

As I said in my statement, the strategic framework business fund will continue to pay funding to businesses that are required to close or to modify their operations by law. I know that nightclub and soft play owners benefited from the grants that were paid in November. We keep all the grants under review, recognising that there is a limited pot of funding and that we need to ensure that it goes to the hardest-hit businesses. That is why we have sectoral funds to try to fill the gaps. We will keep that under review.

Photo of Graham Simpson Graham Simpson Conservative

It has been good to see more people walking and cycling during the pandemic but, if we are to maintain that progress, we need to invest more. Why has the cabinet secretary cut the budget for sustainable and active travel?

Photo of Kate Forbes Kate Forbes Scottish National Party

On the contrary, we will invest £118 million through the future transport fund in low-carbon and other transformational initiatives, and we will continue to invest £100.5 million in active travel to enable the delivery of high-quality walking, wheeling and cycling initiatives, access to bikes, and support for people who choose to be active and to use sustainable travel. That funding will continue to ensure that people have access to low-carbon transport options.

Photo of Bob Doris Bob Doris Scottish National Party

I was pleased to hear the cabinet secretary outline support to tackle poverty. However, as we rebuild the economy, we must also tackle inequalities and provide equal opportunities for all. Will the cabinet secretary expand on how the measures that are set out in the budget can achieve that ambition?

Photo of Kate Forbes Kate Forbes Scottish National Party

Tackling inequalities and poverty is at the very core of the budget. It includes, for example, a significant increase in delivering our game-changing Scottish child payment, which will provide support to thousands of families who need it.

Over the past two years, we have seen substantial investment in tackling inequalities. That need has only been exacerbated during the pandemic. We will ensure that funding—whether it is for the Scottish child payment, funding to tackle the digital divide, or funding for the commitment to tackle child poverty—is delivered in the coming financial year.

Photo of Miles Briggs Miles Briggs Conservative

Many people who are watching will be incredibly worried about their jobs. Why has the Government not taken forward the Conservatives’ ask of establishing job security councils so that, as we look towards coming out of the pandemic, people who are unemployed can be rapidly matched with new opportunities? Given that each and every one of us will have diverse local economies across our regions and constituencies, will the cabinet secretary look at that issue again before she comes back to Parliament?

Photo of Kate Forbes Kate Forbes Scottish National Party

With respect, although I am very open to any proposals—I reiterate my suggestion that we work on cross-party lines to get the budget through—I do not think that the business community needs security councils or any other kind of council right now. What the business community needs is targeted investment in employability and skills. We see that with the young persons guarantee, the investment directly in businesses, the survival grants and the investment through the Scottish National Investment Bank, whose capitalisation will increase in the coming year. However,

I am, of course, more than happy to take good proposals into account and to work across party lines.

Photo of Colin Beattie Colin Beattie Scottish National Party

What resources are being committed to help exports to get back on track following the double hit of the Covid-19 pandemic and Brexit, both of which have badly damaged Scottish businesses?

Photo of Kate Forbes Kate Forbes Scottish National Party

The budget includes funding for our strategy to increase exports. We have a clear and robust strategy, “A Trading Nation”, which is more important than ever before. That strategy wants Scotland’s exports to grow to 25 per cent of GDP by 2029. This year, we are investing over £7 million to help deliver that ambition, as well as an additional £5 million to deliver year 2 of the food and drink sector recovery plan.

Although the implications of the UK Government’s hard Brexit make our job more difficult, they also make that work even more important. There is funding for it and a clear strategy.

Photo of Neil Findlay Neil Findlay Labour

The cabinet secretary said that there would be additional money for mental health. I have a parliamentary answer that tells me that, in the whole of Scotland, there are only 46 child and adolescent mental health beds. That is an astonishingly low number. What can families take from the cabinet secretary’s statement to assure them that we have proper care and treatment for young people who are experiencing a mental health problem? We know that, after Covid, there will be an even greater crisis.

Photo of Kate Forbes Kate Forbes Scottish National Party

That is an important question for those very reasons. I can outline, as I have already done, the increase in overall spending on mental health to more than £1.1 billion, but money is only half the challenge. The other part of the challenge is ensuring that there is reform so that the services and facilities are provided where people need them. I will continue to work with the Minister for Mental Health to have funding in place to match the policy ambitions to ensure that there is access to mental health care, particularly as we come out of the pandemic, which has taken a huge toll on people’s mental health.

Photo of John Scott John Scott Conservative

I declare an interest as a farmer. Given that much transitional funding is required to move Scotland’s rural areas towards net zero, is the cabinet secretary confident that sufficient funds are being made available in the budget to achieve early carbon-reduction targets, as recently agreed by Parliament?

Photo of Kate Forbes Kate Forbes Scottish National Party

There is continued investment in, for example, the agricultural transformation programme, which provides £40 million to take action to help deliver our target of net zero greenhouse gas emissions by 2045 and improve environmental sustainability. Yes, there is funding in the budget: there is £630 million in on-going agricultural support, but there is also funding to help farmers with that transition.

Photo of Liam Kerr Liam Kerr Conservative

Is the money from the recover, renew, transform programme budget separate from the funding arrangements for the various justice organisations that it mentions, or is that money included in the justice organisations’ budgets, as outlined in the budget figures that are published today?

Photo of Kate Forbes Kate Forbes Scottish National Party

The budget figures that are announced today include the overall funding that is available to either portfolios or specific budget lines. They set the overall spending envelope within which public sector bodies operate. If additional funding becomes available, for example after the UK Government’s budget is announced, we will look to deploy that funding as easily and as quickly as possible to meet the needs where they are.

The Deputy Presiding Officer:

That concludes questions on the cabinet secretary’s statement. We will shortly move on to the next item of business.

15:18 Meeting suspended.

15:27 On resuming—