Scotland budget announcement 2020/21

The Scottish Government announced its budget for 2020/21 live from Holyrood yesterday. The budget, delivered by Minister for Public Finance Kate Forbes MSP, addressed government spending plans in response to the climate emergency and in areas such as public services, health and affordable housing.

The budget is significant in the timing of its delivery. The Scotland budget, usually announced after the UK budget, this year comes a full month earlier, meaning that MSPs have had to draw up estimated spending plans; in some cases these plans may change depending on later announcements from Westminster. All will be revealed when Sajid Javid, the Chancellor of the Exchequer, announces the UK budget on 11 March.

Supply2Gov outlines the key findings from the Scotland budget 2020/21 below, which will help to shape public sector procurement in Scotland over the coming years.

Scotland budget – key findings and statistics

Climate emergency and greener initiatives

  • A total of £461.8 million will be spent on the environment, climate change and land reform – an increase from £426.6 million.
  • Spending on environmental services will go up from £134.1 million to £157.1 million.
  • A new £120 million Heat Transition Deal and a total investment of £151 million in energy efficiency.
  • £1.8 billion of capital investment in specific products to reduce carbon emissions. This is an increase of £500 million compared with last year.
  • The Scottish Government has committed £250 million to peatland restoration over the next ten years, to be spent on large restoration projects which will enhance biodiversity in some of the most important habitats in Europe and generate more jobs in rural communities. This includes £20 million in 2020.

There are numerous other spending allocations to address the climate emergency, including investing more in sustainable methods of transport such as cycling, electric buses and electric cars.

Of these proposals to the environment, Kate Forbes MSP said:

“These measures alone represent a substantial plan of action for the year ahead, but we must, and we will, go further. The climate emergency demands immediate action, but it also requires genuine long-term commitment if we are to deliver against our statutory emissions reduction targets.”

Public services

A crucial area of the budget, the Scottish Government has stated investment in public and health services will increase to over £15 billion for the first time ever to protect and improve services. The primary announcements are:

  • Investment of £9.4 billion in health and social care partnerships.
  • £117 million investment in mental health services for all ages and stages of life.
  • A real-terms increase in resource funding for local government, with total overall support given through the settlement of £11.3 billion.
  • Delivering an increase of nearly 60% in targeted funding to reduce harm from alcohol and drugs.
  • £72 million investment for Police Scotland, which is above the increase the Scottish Government had promised, in order to effectively maintain officer numbers.
  • An increase in overall funding for rail and bus services of £286 million, bringing total investment in 2020/21 to £1.55 billion.

Finance, business and affordable housing

  • A Scottish National Investment Bank is intended to be operational in 2020, supported by the £150 million Building Scotland Fund and a further £220 million in direct investment in 2020/21.
  • Total spending on finance, economy and fair work will increase from £5,336.8 million to £6,271.6 million.
  • Infrastructure investment will grow to nearly £1 billion in the first year of the National Infrastructure Mission.
  • Affordable Housing Supply programme spending will increase to £843 million.
  • A commitment of more than £800 million to help the Scottish Government continue to progress towards the target of building 50,000 affordable homes by 2021.
  • Scottish income tax is expected to drive £12 billion of investment.
  • No Scottish taxpayer will pay more income tax than they did last year. According to the budget, 56% of Scottish taxpayers will pay less income tax than if they lived elsewhere in the UK.

If Scotland’s budget, put forward by the Scottish National Party (SNP), is approved, the changes will come into effect from 6 April 2020.

Find out more information on what the Scotland budget 2020/21 means for your business on the Scottish Government website.

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