Less than Everything You (Didn’t) Want to Know about the Scottish Budget 20-21

Scottish money

Editorial Health Warnings:

  • This is a very brief, unstructured, synopsis of the key points relating to Social Security
  • The budget is a draft budget, subject to approval by Holyrood Committees & Parliament
  • The full document is 283 pages (very) long. Spending plans may be included in different “portfolios” (e.g. voluntary organisations that are funded centrally or via local government)
  • The writer is not an accountant, economist or any other kind of fiscal expert!

Official Health Warnings:

  • Unusually, the UK Budget will be announced after this draft budget, on 11 March. Due to the complex “grant sharing formula” for UK/Scotland (“Barnett”), the Scottish budget may change
  • Brexit can impact the economy and public spending;
  • The “fiscal risk” (uncertainty) of actual Scot Gov spending & actual Scot Gov income via taxation and grant adjustments is higher this year than previously (see below).

Brief Overview:

Note: £1b = 1,000,000,000 (a thousand million); £1m = 1,000,000 (a mere million)

Within a total budget of £50b:

Health & Social Care = £15b

Local Government = £11.3b plus maximum 3% increase in local Council Tax

Social Security = £3.7b (most of which is still paid via the UK DWP, see below);

Scottish Taxation: no change in rates and “higher earners allowances” frozen, meaning that 56% pay less than in rUK and the wealthier 44% pay more. (There is some uncertainty re actual income from Scottish taxation)

Social Security (Complex & confusing):

£3.7b Scottish social security budget will be mostly still paid to claimants via DWP in 2020-21

First “big” benefit transfer to Scottish control is new claims for child DLA in Summer 2020, estimated at 16,000 awards totalling £3m

Extra £10 p.w. per child under 6 in low income families will be introduced in Xmas 2020, estimated total £21m

The “Demand led” nature of transferred DWP benefits brings greater financial risk/uncertainty;

The Welfare Fund is (finally)being increased from 2013-14 levels, rising by £2.5m to £35.5m (a small nod to our SUWN campaign…)

Money for Discretionary Housing Payments is being increased from £63.2m to £71.8m, plus a further £2m for “care leavers”. (We campaigned for an increase in these payments too.)

Further details of the many Social Security developments (and a link to the Scottish Budget) can be found here

Thanks to Ian Davidson for this analysis