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News Policy

Scotland’s draft budget – initial analysis

Adam Lang
Written by Adam Lang

Yesterday afternoon, the Cabinet Secretary for Finance unveiled the draft Scottish Government Budget for 2018/19. This was a more significant event than usual as it was the first Scottish Government Budget since devolution to have significant tax raising powers, beyond just the usual spending powers of Holyrood and St Andrew’s House. As such, it is the issues of changes to income tax that have dominated today’s media reporting, but this does not do full justice to what was a comprehensive and complex budget with major and notable announcements in other key policy areas, not least for housing and homelessness issues.

The key points from Shelters Scotland’s point of view:

  • £756m in 2018/19 as part of the established £3bn commitment over this parliament for investment in affordable housing
  • Re-announcement of the £50m Ending Homelessness Together Fund with £10m to be spent in in 2018/19
  • A commitment to £100m in 2018/19 to mitigate the worst effects of welfare reform – notably the continued mitigation of the Bedroom Tax, DHP funding and ensuring the continuation of Housing Benefit entitlement for 18-21 year olds in Scotland
  • On Scotland’s Residential Land and Building Transaction Tax (LBTT), there will be a new zero rate threshold for first time buyers of £175,000 – the residential and non-residential rates and bands for LBTT will remain unchanged
  • A £50m fund for tackling child poverty
  • £4bn of funding for infrastructure (rail, road and connectivity)
  • £600m and the commencement of procurement for the Reaching 100 (by 2021) programme to ensure every home and business will have access to superfast broadband by 2021
  • An initial £70m of a new £150m Building Scotland Fund to unlock new housebuilding, develop new low-carbon commercial property and support research and development

So, some positive headline numbers and a lot to digest and lots more to understand in relation to how some of these funds will be allocated and the detail beneath the headlines. Notably, as the SNP is a minority government, it will be interesting to follow the negotiations and what gets added or amended as they seek to secure a parliamentary majority at Holyrood in support of these proposals.

One other notable area to pick up on, having now had some time to review the Budget document, is that within the Communities portfolio, funding for Local Government and funding for the Third Sector are both currently facing real terms cuts, as detailed below:

These proposals give some cause for concern. We know that it is the third sector and local authorities that will be asked to provide the help and support for those impacted by the forthcoming full roll-out of Universal Credit in Scotland and it has been well documented that this is expected to put a major strain on charities and local services. This, coupled with our frontline experience of some local authorities already failing to deliver their statutory duties due to limited resources, paints a worrying picture for future provision of vital housing advice and support services.

If local authorities are not properly resourced then they will not be able to provide the vital services needed to help those facing or at risk from homelessness. While the £50m Ending Homelessness Together Fund is a welcome development, it should not be seen as a full alternative to well-resourced and better joined-up working from local authorities that have a statutory duty to provide a home for those experiencing homelessness.

Shelter Scotland will continue to engage with the Scottish Government and all political parties on these issues as the Budget progresses through Holyrood. There is still opportunity to seek clarification on these issues and make the case for greater investment in and protection of funding for our vital services that form the core of Scotland’s Housing Safety Net.

About the author

Adam Lang

Adam Lang

Adam is Head of Communications and Policy at Shelter Scotland.