Scottish Budget presents huge challenges for SNP | Global News Avenue

Scottish finance minister Shona Robison is under pressure to embark on wide-ranging reforms as she prepares to set out next year’s draft budget.

Spending watchdog Audit Scotland has warned the NHS is unsustainable in its current state and local authorities need more cash and autonomy, with unions saying education is threatened by a lack of teachers.

There have also been calls for the SNP to replace council tax with a new system and limit access to “freebies” such as state-funded university tuition fees.

Robinson said the budget would focus on ending child poverty and “tacking on the climate emergency”, while improving public services and growing the economy.

Her tax and spending bill will be scrutinized in the Scottish Parliament this winter before a vote in February, when she will need support outside the SNP minority government to make it law.

British government stated Robinson could get an extra £3.4bn for this budgetcovering 2025/26, is the result of decisions taken by Chancellor Rachel Reeves in the October Budget at Westminster.

This is because the largest share of Scottish Government funding comes from an annual one-off grant from the Treasury, known as the block grant, calculated as The formula for design in the 1970s Presented by Labor politician Joel Barnett.

But the Scottish government’s decision to raise wages for public sector workers, who are more numerous per head and “on average “Wages are higher in Scotland” than elsewhere in the UK.

The institute’s annual budget report It said that despite the increase in funding, the solution for 2025/26 “remains tricky” and the finance minister has “limited room for maneuver”.

Other pressures include the Scottish National Party’s decision to fund Partial reversal of Reeves’ restrictions on winter fuel payments For pensioners, and the impact of Labour’s decision Increase employer’s National Insurance contributions.

There have also been calls for Robinson to spend around £220 million replicating the business rates (a property tax) cut announced by the Chancellor for retail, hospitality and leisure companies.

“Given that the challenges on both sides of the border are no different, we believe the Scottish Government does have a duty to reduce the 40% rate,” said Stacey Dingwall, Scotland’s head of policy and external affairs for Scottish small businesses.

Ms Dingwall said the Scottish Government also needed to keep its commitments to rebuild relationships with business after the pandemic. Scottish small businesses suffer net loss of 20,000 2023.

Scotland’s total budget last year was approximately £60 billion. british government It said the block grant in 2025/26 would be £47.7bn.

Ms Robinson must balance the books every year because the devolved governments have limited powers to borrow money.

The rest of her budget is raised by taxes administered by Edinburgh, such as income tax, land and buildings transaction tax (formerly known as stamp duty) and business rates.

Since devolution in 1999, the Scottish Government has been responsible for a wide range of public services, including health, education, policing, justice and housing.

The British government still controls defence, foreign affairs, currency and immigration.

However, in the quarter-century since the modern Scottish Parliament was founded, additional powers for welfare and taxation have been transferred from London to Edinburgh.

This has seen devolved social care spending jump from £192m in 2018/19 to £5.1bn in 2023/24, according to the Fraser Alland Institute.

The biggest disagreement with Westminster welfare policy is the introduction in 2021 of a weekly benefit for low-income families, currently worth £26.70 per child, called the Scottish Child Benefit.

“It’s definitely going to have an impact,” said Chris Birt, deputy director of the Joseph Rowntree Foundation. He hopes the budget will include more investment in social housing; funding for social care and more funding for childcare; and council tax reform.

“Most people are not going to help if the UK Government, Scottish Government, health boards, councils etc. provide services, they just want support,” Mr Burt said.

“We definitely need to have a more thorough discussion about how to support people rather than how to worry about our institutions.”

As well as disagreements with Westminster over benefits, there are also Shifts in tax policy.

Currently, anyone in Scotland earning more than £29,000 a year pays more income tax than their English compatriots.

Those earning below that threshold pay slightly less, and the system is now more complex than anywhere else in the UK.

Ms Robinson will also have to consider what to do with council tax after then-First Minister Humza Yousaf made the shock decision last year to refreeze council tax collections.

It would be a bigger surprise if the freeze on this year’s budget is extended, which would plunge Yusuf’s successor, John Swinney, into a bitter battle with local authority leaders.

Therefore it is considered unlikely.

The SNP’s 17 years in power at Holyrood have also maintained and expanded a range of state-funded benefits, including personal care for older people, university tuition fees, prescription drugs and public health care for the youngest and oldest Scots. car travel.

Some critics, including Alison Payne, research director at Reform Scotland think tank, said it was a poor use of limited cash.

“With tight budgets and dwindling resources, you need to have conversations about whether it’s best to target support to those who need it most,” Ms Payne said.

But the biggest headache for Robinson is the NHS. Not only did it take up 40% of her budget, but it was also under tremendous pressure.

Public spending watchdog Audit Scotland says the country’s current healthcare delivery model Unsustainable“deteriorating financial condition” and “ongoing performance issues.”

There are calls not just for more funding or changes to existing policies, but also for fundamental reforms and possibly even the discontinuation of some services.

Ahead of the budget, Scottish Labor said “every institution in Scotland” was “made weaker by the SNP’s mismanagement and waste”.

The Scottish Conservatives accused the SNP of “setting Scotland up by making people pay more and get less”.

Scottish Lib Dem leader Alex Cole-Hamilton said the SNP “must do whatever it takes” to persuade the party to support the budget.

The Scottish Greens said they wanted to see “a progressive budget that invests in tackling the climate crisis and lifting children out of poverty”.

The Alba Party urged Swinney to reject proposals from any party “that wants to tear up the social contract that Alex Salmond established during his time in office”.

Overall, it represents a huge challenge for Robinson and her boss John Swinney, who has pledged to lead Scotland out of a “long, dark winter” into a “warmer spring”.