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Scottish Budget Draft Budget 2015-16

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Scottish Budget Draft Budget 2015-16 Scottish Budget Budget Scottish Draft Budget 2015-16 Draft Budget Scottish Budget Draft Budget 2015-16 © Crown copyright 2014 ISBN: 978-1-78412-671-1 This document is available from our website at www.scotland.gov.uk. Produced for the Scottish Government by APS Group Scotland, 21 Tennant Street, Edinburgh EH6 5NA DPPAS37906 (10/14) www.scotland.gov.uk Scottish Budget Draft Budget 2015-16 The Scottish Government, Edinburgh 2014 © Crown copyright 2014 You may re-use this information (excluding logos and images) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit http://www.nationalarchives.gov.uk/doc/open-government-licence/ or e-mail: [email protected]. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This document is available from our website at www.scotland.gov.uk. ISBN: 978-1-78412-671-1 The Scottish Government St Andrew’s House Edinburgh EH1 3DG Published by the Scottish Government, October 2014 Produced for the Scottish Government by APS Group Scotland, 21 Tennant Street, Edinburgh EH6 5NA DPPAS37906 (10/14) CONTENTS FOREWORD by the Cabinet Secretary for Finance, Employment and Sustainable Growth iv Chapter 1 Strategic Context for Draft Budget 2015-16 1 Chapter 2 Scotland Act 2012 Financial Provisions 13 Chapter 3 Portfolio Plans 19 Chapter 4 Health and Wellbeing 21 Chapter 5 Commonwealth Games, Sport, Equalities and Pensioners’ Rights 33 Chapter 6 Finance, Employment and Sustainable Growth 41 Chapter 7 Education and Lifelong Learning 58 Chapter 8 Training, Youth and Women’s Employment 70 Chapter 9 Justice 74 Chapter 10 Rural Affairs, Food and the Environment 90 Chapter 11 Culture and External Affairs 103 Chapter 12 Infrastructure, Investment and Cities 112 Chapter 13 Administration 138 Chapter 14 Crown Office and Procurator Fiscal Service 142 Chapter 15 Local Government 146 ANNEXES ANNEX A Monitoring of Long-Term Investment Commitments 156 ANNEX B Update on Progress with Innovative Financing Investments 159 ANNEX C Public Service Reform Delivery and Change Fund Update 167 ANNEX D Departmental Expenditure Limits 173 ANNEX E Annually Managed Expenditure 174 ANNEX F Departmental Expenditure Limits: Capital/Resource Split 175 ANNEX G Comparison 2008-09 to 2015-16 178 ANNEX H Estimated Payments Under PPP Contracts 182 ANNEX I Glossary 183 iv | SCOTTISH DRAFT BUDGET 2015-16 FOREWORD by the Cabinet Secretary for Finance, Employment and Sustainable Growth This draft budget sets out the Scottish Government’s spending plans for 2015-16 for consultation with the Scottish Parliament and the people of Scotland. Our budget plans reflect improvements in Scotland’s economy and take steps to address the aspirations that were so tangibly expressed during the recent Referendum on Independence. The unprecedented level of political engagement, with 97 per cent of those eligible registering to vote and 85 per cent casting a ballot, raised a range of issues that affected not just our constitutional future but established the wider priorities of the people of Scotland. The Scottish Government, working with our partners in local government, the third sector, trades unions and the business community, intends to embrace this new political engagement and respond positively in this budget, insofar as our existing powers enable us to, with a range of measures aimed at: y making Scotland a more prosperous country; y tackling inequality; and y protecting and reforming public services. Making Scotland a more prosperous country Our approach is founded in the Government Economic Strategy, with the objective of delivering opportunities for all of Scotland to flourish through a balanced approach to delivering growth: strengthening the drivers of growth, and improving sustainability, cohesion and solidarity. The return to pre-recession levels of economic output and achieving record levels of employment is a significant milestone in our recovery. It is now essential that the benefits of economic growth are not only maintained but are made accessible to all of our citizens. In doing so: y we will focus on creating employment, education and skills development opportunities for those not currently in work or training, including through free higher education tuition and our Opportunities for All initiative; FOREWORD | v y we will provide funding to implement the findings of the Commission for Developing Scotland’s Young Workforce, as part of our strategy for tackling youth unemployment; y we have committed £280 million over two years to deliver expanded childcare provision, supporting parents when they choose to participate in the labour market; y we will continue to encourage entrepreneurship, business, innovation and internationalisation and to offer the most competitive business rates regime in the UK, including through the Small Business Bonus Scheme; and y we are using all the levers at our disposal to deliver our ambitious programme of infrastructure investment, worth £8 billion over two years, with this budget setting out our plans for a further £1 billion extension to the NPD pipeline of infrastructure projects, supporting thousands of jobs and Scotland’s long-term economic potential. Tackling inequality Scotland’s economic recovery has been achieved against a backdrop of continued austerity from the Westminster Government. Five years of austerity have resulted in the Scottish Fiscal DEL budget being cut by around 10 per cent in real terms, with a further £25 billion cut in UK public spending promised over the next three years by the current UK Government, with much of that affecting those on low incomes. Child poverty organisations have warned that, by 2020, an additional 100,000 children in Scotland could be living in relative poverty after housing costs, because of UK Government welfare reforms. The debate over Scotland’s future demonstrated a clear desire for an alternative to UK Government austerity and to the poverty and inequality that can cripple our society. The Scottish Government is committed to meeting this challenge as far as we can within our existing powers. This budget sets out a number of new commitments alongside our continued efforts to mitigate the worst effects of welfare reform: y by increasing our spending on welfare reform mitigation to £81 million in 2015- 16, including £35 million to support those affected by the ‘bedroom tax’; y through our commitment to the Scottish Living Wage and delivery of the Social Wage; y providing additional investment of £125 million in housing, with a strong focus on affordable and social housing, as part of a total funding package of over £1.7 billion in housing and regeneration in Scotland over 5 years; and y additional funding for measures to tackle child poverty, including support for kinship carers, and measures to improve the lives of Scotland’s most vulnerable children. vi | SCOTTISH DRAFT BUDGET 2015-16 Protecting and reforming public services Our programme of public service reform is vital to ensure the sustainability of our public services and to deliver better outcomes for those that use them. To protect and reform our public services, so they can better meet the aspirations clearly expressed by people across Scotland, this budget provides: y full resource Barnett consequentials and additional funding of more than £80 million for the NHS, representing a real terms increase to the overall Health budget, keeping the NHS in Scotland in public hands and enabling further investment in frontline NHS services and the integration of adult health and social care; y continued investment in prevention and support for the Early Years Collaborative; y funding to maintain our commitment to police numbers, supported by the successful programme of police reform; y a fair settlement for local government, which funds councils to maintain the council tax freeze to households, while providing additional resources to deliver shared priorities around school education, free school meals and childcare; and y our continued commitment to no compulsory redundancies in our public sector pay policy. This budget also marks the first time a Minister in the Scottish Government will set tax rates for Land and Buildings Transactions Tax and Scottish Landfill Tax. We have established a principles-based Scottish approach to taxation, which applies Adam Smith’s four maxims of certainty, efficiency, convenience and proportionate to the ability to pay and sends a clear signal that tax avoidance will not be tolerated in Scotland. The devolution of these powers is welcome and demonstrates the practical benefits of being able to align tax policy with the social and economic priorities of the Scottish Government. With these measures, we can build on our strong foundations to establish the more prosperous and fairer Scotland our citizens demand. JOHN SWINNEY MSP Cabinet Secretary for Finance, Employment and Sustainable Growth October 2014 CHAPTER 1 Strategic Context for Draft Budget 2015-16 INTRODUCTION The 2015-16 Draft Budget builds upon the priorities established in the 2011 Spending Review – and delivered every year since – to create opportunities for all to flourish through sustainable economic growth. The Draft Budget extends the indicative spending plans published in September 2013 using the full extent of the powers available to this Parliament. These include for the first time the powers devolved through the Scotland Act 2012 to set the rates and bands for Scottish Landfill Tax and Land and Buildings Transaction Tax and borrowing for capital investment. The Scottish Government is maintaining its focus on growing Scotland’s economy and on effective delivery of our public services in the face of continuing financial challenges. Over the course of 2010-11 to 2015-16, the Scottish Fiscal DEL budget has been cut by around 10 per cent in real terms with the Capital Fiscal DEL budget facing a particularly challenging real terms reduction of around 26 per cent as a result of the UK Government’s austerity programme.
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