Commenting on the Scottish Budget, Jenny Stewart, KPMG’s head of infrastructure, Government and Healthcare, said:
“The resignation of Derek Mackay may have dominated the headlines leading to today’s Scottish Budget announcement but the timing of this year’s tax and spending plans has also proved a challenge for the Scottish Government, coming ahead of the delayed UK Budget.
On balance, the Scottish Government has assumed an overall real terms increase of 1.8% in their budget. They have built in September’s pre-announced uplift in their day to day spending totals of 2.1% from UK Government; made assumptions about receiving additional capital, given UK Government election pledges; but then also made downwards adjustments for tax receipts being lower than forecast in 2018/19 – a £207m hit – along with low economic growth forecasts for 2020/21. The Scottish Fiscal Commission’s forecasts published today forecast growth of only 1% in 2020.
“The key theme of the budget was that the Scottish Government is looking to address the climate crisis head-on. The key areas which produce the largest levels of emissions are transport; heating our buildings; and agriculture. There were welcome initiatives in all these areas. They included new funding to speed the pace to decarbonise heating in buildings and an £83m Future Transport Fund including low emission and electric buses, bus prioritisation measures and investment in electric vehicle charging points. It was also good to see additional funding for tree planting – essential in capturing more carbon; and a significant increase in funding for peat restoration – not just for this year; but a commitment to funding for 10 years.
“While today’s politicians can’t bind their successors, the more we can see long term planning and funding, the more helpful the Budget process is – particularly when it comes to infrastructure spend. Another one year budget makes it difficult for the rest of the public sector to plan and – with a comprehensive spending review shortly underway at UK Government level, which will cover spending totals for the following 5 – 6 years, next year’s budget should be set against a background of greater multi-year certainty.”
Jenny Stewart