Summary

  • Finance Secretary Kate Forbes has outlined the Scottish government's budget plans for the coming year.

  • Ms Forbes confirmed that income tax rates will remain unchanged next year although the higher and top rate thresholds will be frozen..

  • The government has also said that the council tax freeze will end, with local authorities being given "full flexibility" in setting rates.

  • Other spending plans focus on business recovery from Covid, alongside the transition to "net zero" carbon emissions and tackling child poverty.

  • The Scottish economy is now predicted to recover to pre-pandemic levels by the summer - two years earlier than previously forecast.

  • The plans are effectively guaranteed to pass through Holyrood, with the SNP and their Green partners holding a majority of seats.

  • Opposition parties say the proposals do not go far enough towards helping the country recover from the pandemic

  • It comes after Scottish Conservative leader Douglas Ross used FMQs to accuse the Scottish government of showing contempt for people employed in the North Sea oil and gas industry.

  • Mr Ross highlighted comments by Scottish Greens co-leader Patrick Harvie - a government minister - who said it was now only the "hard right" who back the industry.

  • The first minister responded by saying she supports a "just transition" from fossil fuels to renewable and low carbon energy.

  • The session comes amid concern about rising numbers of Omicron variant Covid cases.

  1. What about tourism and enterprise?published at 16:03 Greenwich Mean Time 9 December 2021

    edinburgh tourists

    Labour shortages, rising costs and inflationary pressures are to be tackled by investing in skills and employability and making "catalytic investments" to boost regeneration.

    A national strategy for economic transformation is to be published.

    Ms Forbes announces:

    • more than £205m for the Scottish National Investment Bank - to help it support Scotland’s transition to net zero, build communities and promote equality and innovation.
    • £51m for rural services and islands, including activities linked to the National Islands Plan and introducing a new Islands Bond Fund
    • £225m to Skills Development Scotland to support national training interventions
    • nearly £2bn for Scotland’s universities and colleges

    She signals £370m for enterprise agencies and nearly £50m to VisitScotland.

  2. Your Questions Answered

    Where does the Scottish government get its money from?published at 15:59 Greenwich Mean Time 9 December 2021

    Philip Sim
    BBC Scotland political correspondent

    The Scottish government receives a block grant - a share of the UK-wide budget calculated via the Barnett Formula - to spend on day-to-day matters.

    In 2022-23, it will be £35bn.

    That can be topped up through the year via "Barnett consequentials", effectively Holyrood's share of cash committed to devolved areas by the UK government, which Scottish ministers can spend as they like.

    In recent years income tax revenues raised in Scotland have played an increasingly large role in ministers' spending plans.

    Since 2018, Scotland has had a separate system of income tax rates and bands to the rest of the UK.

    In both 2019-20, external and 2020-21, external, Scotland raised about £13bn in income tax.

  3. Funding for health, education and tackling inequalitypublished at 15:56 Greenwich Mean Time 9 December 2021

    teacher and pupilsImage source, teacher and pupils

    Ms Forbes says her budget provides record funding of £18bn for health and social care.

    This funding package includes £1.2bn for mental health

    Education is also a priority, she says, with investment to support the recruitment of at least 3,500 teachers and 500 classroom assistants over this parliament.

    There is also funding to deliver a £10.50 minimum wage for adult social care staff, she says.

    Ms Forbes says the budget includes:

    • £200m to tackle the poverty-related attainment gap
    • £4bn across social security and welfare
    • £110m to fund free bus travel for young people from January
    • £72m to expand free school lunches for all P1-5 pupils
    • £544m for free funded early learning and childcare
    • £831m for affordable housing

    Ms Forbes says a key anti-poverty measure will be the already announced doubling of the Scottish Child Payment to £20 a week, from April 2022.

  4. Rates relief for business to continue for three monthspublished at 15:49 Greenwich Mean Time 9 December 2021

    thurso

    Onto tax, and Ms Forbes says she will publish Scotland’s first "Framework for Tax" later this month.

    She says that her 100% rates relief during the pandemic has saved businesses in Scotland around £1.6bn through the rates system alone since 1 April 2020.

    She announces that she will phase the return of rates liabilities, while rates relief for the retail, hospitality and leisure sectors will continue at 50% for the first three months of 2022-23, capped at £27,500 per ratepayer.

    Ms Forbes says this will "prevent a cliff edge" for businesses in those sectors, saving them a further £56m next year.

    Non-domestic rates will be 49.8p in the pound, "delivering a below inflation uplift for the fourth year in a row".

    Small businesses with a rateable value of less than £15,000 on Scottish high streets, will continue to pay no rates for all of next year, irrespective of what sector they are in, through the Small Business Bonus Scheme.

    New builds will pay no rates for the first 12 months after occupation, through the Business Growth Accelerator. This is "directly seeking to revitalise our high streets".

  5. Economy 'will recover to pre-pandemic levels by next summer'published at 15:40 Greenwich Mean Time 9 December 2021

    Ms Forbes gives out figures produced by the Scottish Fiscal Commission (SFC) which provides independent analysis of the Scottish economy.

    The SFC calculates the long-term economic damage of the Covid pandemic will be about minus 2%

    But the commission forecasts the Scottish economy will recover to pre-pandemic levels by April–June 2022.

    This is almost two years earlier than was previously forecast in January.

    The SFC expects unemployment to peak at 4.9% at the end of this year - again much lower than previous estimates.

  6. UK government has 'hindered' Scottish planspublished at 15:40 Greenwich Mean Time 9 December 2021

    business ownerImage source, Getty Images

    The finance secretary says that the UK government’s spending review hindered rather than helped her on her mission.

    She says that with Covid funding removed, day-to-day funding next year is "significantly less" at a time when we need to invest in the economy and help public services recover.

    She says there are areas where she would have wished to go further.

    But she says her budget will address key priorities, target resources for low income households, and pave the way for future investment.

    Ms Forbes believes in a budget of choices she has "made the right choices".

  7. Income tax rates next year will remain unchanged, Kate Forbes sayspublished at 15:37 Greenwich Mean Time 9 December 2021
    Breaking

  8. Your Questions Answered

    Is the government likely to put up income tax?published at 15:34 Greenwich Mean Time 9 December 2021

    Philip Sim
    BBC Scotland political correspondent

    There are two extra tax rates in Scotland - one just below the basic rate, providing a break for low earners, and just one above it, to squeeze a little more from those who earn above the median wage.

    Meanwhile, the higher and top rates of tax are both a percentage point higher than elsewhere in the UK, in what the finance secretary terms a "progressive" move to bolster local services.

    Income tax bands

    It seems unlikely the government will make big changes again, with the SNP having pledged in May's election manifesto that it would "freeze income tax rates and bands".

    Finance Secretary Kate Forbes could potentially tinker with the thresholds - the point at which the various rates kick in. The Fraser of Allander Institute reckon , externalthat freezing thresholds, rather than raising them in line with inflation, would generate an extra £140m of revenues.

    However, this would constitute a tax increase, which may not be popular at a time when National Insurance Contributions are also going up.

  9. Budget supports Scotland at 'point of transition'published at 15:34 Greenwich Mean Time 9 December 2021

    Ms Forbes says the budget will support Scotland at a point of transition - balancing the response to Covid and the cost of living crisis.

    She says it will help people, businesses and services get back on their feet.

    Ans she does not want to "leave anybody behind" in her determination to increase prosperity.

    The Scottish government cannot deliver on these ambitions alone, Ms Forbes adds, so it will harness a collaborative approach across all areas of Scottish life – public and private, national and local – building on the renewed approach to partnership seen through the pandemic.

  10. Scottish Budget 'for climate, recovery and equality'published at 15:32 Greenwich Mean Time 9 December 2021

    kate forbes

    Kate Forbes begins by saying her budget will help tackle the climate emergency, support economic recovery and reduce inequalities.

    She says it comes at a crucial time for Scotland and delivers on key commitments made in the Bute House Agreement with the Scottish Greens.

    This budget "redoubles" efforts to meet emission reduction targets and harnessing opportunities for green jobs, the finance secretary adds.

  11. Coming uppublished at 15:25 Greenwich Mean Time 9 December 2021

    Finance Secretary Kate Forbes is in place and ready to deliver the Scottish government's budget.

    Stick with us here for full coverage, reaction and analysis.

  12. Analysis

    How do you spend £40bn?published at 15:20 Greenwich Mean Time 9 December 2021

    Douglas Fraser
    Scotland business & economy editor

    The Scottish government has about £40bn to spend next year - but much of it is already spoken for.

    Commitments on public sector pay, building projects and promises already announced such as raising the new children's benefit from £10 to £20 will soak up a lot of that figure.

    In the past, minority governments have kept some money in reserve for negotiations with other parties to secure the budget gets passed - but the SNP-Greens power sharing deal means things should go smoothly this time.

    Some of the things to watch out for in Kate Forbes' budget are:

    • How much support goes to business as business rates holidays are wound down
    • Tensions with Westminster over support for tackling the Covid pandemic
    • Will she use the Scottish government's income tax powers to raise funds, for instance by not raising some thresholds in line with inflation.

    Read more analysis from Douglas Fraser here

  13. Your Questions Answered

    Send us your questions about the Scottish Budgetpublished at 15:13 Greenwich Mean Time 9 December 2021

    Do you have any questions about today's budget?

    Maybe you'd like to know how Kate Forbes' decisions will affect the amount of money in your wallet?

    Or how the government plans to help the economy recover from Covid?

    Send us your questions and we'll select a few to be answered by our business and economy editor Douglas Fraser and our political reporter Phil Sim.

    Just click on the red box at the top of the page and fill in the form.

  14. What can we expect?published at 15:10 Greenwich Mean Time 9 December 2021

    Ms Forbes will set out her tax and spending plans for next year.

    She has already said business recovery is one of three areas to be prioritised, alongside the transition to "net zero" carbon emissions and tackling child poverty.

    Measures such as the doubling of the Scottish child payment have already been announced but will be included in the address.

    The draft budget is effectively guaranteed to pass through Holyrood, with the SNP and Greens holding a majority of seats.

  15. Forbes prepares to unveil Scottish Budgetpublished at 15:07 Greenwich Mean Time 9 December 2021

    Kate Forbes

    Attention now moves to the Scottish Budget, which is due to be delivered by Finance Secretary Kate Forbes in the chamber at about 15:25.

    We will bring you live coverage of her statement, reaction and analysis. Ahead of the speech, we will also look at the likely announcements.

    We will answer some of your questions on the Scottish Budget throughout the session.

    Watch the live stream from Holyrood at the top of this page.

  16. Headlines from FMQspublished at 13:15 Greenwich Mean Time 9 December 2021

    • Scottish Conservative leader Douglas Ross accused the Scottish government of showing contempt for people employed in the North Sea oil and gas industry.
    • Scottish Labour leader Anas Sarwar again raised deaths linked to infections at the Queen Elizabeth University Hospital in Glasgow with concerns over how often an oversight board is meeting.
    • Cervical cancer screening rates in NHS Greater Glasgow and Clyde are among the lowest in the country, Scottish Conservative MSP Jamie Greene told the chamber
    • Nicola Sturgeon said Boris Johnson should resign over the deepening Christmas parties row.

    That's all from the FMQs live page but join us here later when Finance Secretary Kate Forbes sets out her tax and spending plans to MSPs at 3.25pm.

  17. Will the government withdraw the 'sex survey'?published at 13:11 Greenwich Mean Time 9 December 2021

    Scottish Conservative MSP Megan Gallagher asks whether the Scottish government will withdraw its health and wellbeing census.

    The questionnaire has sparked controversy as it asks teenagers aged 14,15 and 16 a series of questions about their sexual activity.

    Ms Sturgeon said 24 local authorities had confirmed they would be taking part in the census but she stressed it was not mandatory.

    Parents can ask that the survey is not given to their children and young people can opt out of answering some, or all, of the questions.

    Ms Sturgeon said it was important to collect the information so the government could provide the services that young people need.

    Quote Message

    Either we can bury our heads in the sand and pretend that young people are not exposed to the issues or the pressures that we know they are exposed to. Or we can seek to properly understand the reality that young people face and provide them with the guidance, the advice and the services they need to make safe, healthy and positive decisions. I choose the latter.

    Nicola Sturgeon, First Minister

  18. Sturgeon calls for Johnson to quitpublished at 13:04 Greenwich Mean Time 9 December 2021

    Nicola Sturgeon says it is time for the Prime Minister Boris Johnson to resign.

    Asked by Green MSP Gillian Mackay MSP if she thought it was “time for this corrupt prime minister to go?”, Ms Sturgeon says "yes I do".

    She later adds, "I don’t think it is simply a corrupt incumbent of Number 10 that has to go, I think it is time for Scotland to get rid of the broken, corrupt Westminster system that is holding us back."

    The first minister says Mr Johnson has "many questions to answer" over the Christmas parties row.

  19. Concerns raised about Glasgow's economic recoverypublished at 12:59 Greenwich Mean Time 9 December 2021

    GlasgowImage source, Getty Images

    Scottish Labour MSP Pauline McNeill raises the concerns about Glasgow's economic recovery from the pandemic.

    She says the city suffered the longest and harshest Covid restrictions in the country, one in 12 office workers have not returned to Glasgow city centre, and thousands of small businesses have ceased trading.

    Ms McNeill says Glasgow needs a "fairly resourced recovery plan" co-ordinated by a specialist team.

    Ms Sturgeon says she agrees with the MSP's sentiments and pointed to support that businesses in Glasgow have already received, including rates relief for retail and aviation.

    She says she hopes there will be more in the budget for businesses to welcome.

  20. Long treatment wait for heart disease patientspublished at 12:53 Greenwich Mean Time 9 December 2021

    Reports that patients with heart valve disease are having to wait up to seven months for NHS appointments is raised by Rachael Hamilton.

    The Tory MSP points out it is a “treatable condition and can be fatal”.

    Nicola Sturgeon says the NHS recovery plan “sets out how we will address the backlog in care” that has been created by the Covid pandemic.