Cost of living support to be outlined in Scottish budget debate

Support for people impacted by the cost of living crisis will be outlined by Finance Secretary Kate Forbes.

10 February 2022

Support for Scots impacted by the cost of living crisis will be outlined by Finance Secretary Kate Forbes as MSPs look set to pass the Scottish budget.

The Budget (Scotland) Bill – the first since the powersharing agreement between the Scottish Government and the Scottish Greens that secured a parliamentary majority – looks all but guaranteed to pass Holyrood on Thursday as it is debated at stage three.

One of the provisions not yet included in the Bill is how consequentials sent north from Westminster as a result of a £2 billion relief package will be allocated.

After Ofgem last week announced a rise in the energy price cap by £693, First Minister Nicola Sturgeon said last week she would spend “every single penny” on mitigation measures.

Kate Forbes being interviewed by broadcasters
Finance Secretary Kate Forbes will lead the stage three debate of the Bill on Thursday (Jane Barlow/PA)

But on Wednesday, the Finance Secretary said on Twitter the £290 expected in consequentials was not new money.

Referring to a similar accusation by Welsh First Minister Mark Drakeford, Ms Forbes said: “This echoes the position for Scotland.

“Nevertheless we will honour our commitment to allocate £290 million to deal with the cost of living crisis in Scotland, with details announced tomorrow.

“It will require us to revise the latest budget position I set out to the Scot Parl last week.”

But the accusation was rejected by chief secretary to the Treasury, Simon Clark, who said: “The Welsh Government will receive £180 million of Barnett consequentials as a result of the council tax rebate announced by the Chancellor.

“Exceptionally, we have given the Welsh Government the flexibility to choose whether they spend this money in this financial year or next in order to make the biggest impact on the cost of living.”

Ms Forbes said she plans to outline the spending during the Thursday afternoon debate, as well as the final tranche of business support as part of a £300 million package to aid firms impacted by Covid-19.

She said: “While this budget is focused on tackling our recovery from Covid, we are acutely aware that the pandemic is not yet over.

“That is why we will provide further details to Parliament on how we are supporting businesses and measures to assist people with the cost of living crisis.”

Ms Forbes has already outlined an extra £120 million in funding for local government, money she said last month amounts to a 4% rise in council tax, meaning there should be no need for “inflation-busting” increases.

Local government funding has proven to be among the most contentious areas of this year’s budget process, with council body Cosla saying ahead of the £120 million boost they were in line for a £371 million real terms cut.

That assertion was rejected by ministers, who said the estimate did not take into account cash allocated to other areas that would filter through to councils.

Meanwhile, £197 million was announced to double the Scottish Child Payment to £20 a week from April.

The budget also allocates “at least £2 billion” in investment to support green jobs and work towards achieving net-zero emissions, Ms Forbes said.

She added: “This budget provides a platform to accelerate our recovery from the pandemic, tackle inequalities, invest in the economy and public services and continue a just transition to net-zero.

“Our bold, ambitious and progressive funding package provides record levels of funding to help to restore public services – including £18 billion for health and social care.

“The Scottish Government is firmly focused on ensuring we can seize Scotland’s economic potential and secure a just transition to net-zero.

“Initiatives like our Green Jobs Fund are helping companies such as Autonomous iOt, a fast growing North Lanarkshire business I visited yesterday and which is winning orders from across the UK for its solar and wind powered intelligent lighting products.

“Our £243,000 grant will help the company ramp up its manufacturing and research and development activities, creating new, skilled jobs.

“I hope all MSPs will support the Scottish budget and back our plans to build a fairer, greener and more prosperous Scotland.”

A Scottish Government spokesperson said the sum of £290 million was “not likely to be additional to previous consequential funding,” adding: “Despite this reduction in our estimated overall funding, the Scottish Government will provide £290 million to help households struggling with the cost of living.

“The Cabinet Secretary for Finance and the Economy will set out plans to further tackle the cost-of-living crisis as part of tomorrow’s Stage 3 Budget Bill proceedings.”

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