Summary of draft budget: Key points at a glance

14 December 2017

Finance Secretary Derek Mackay has delivered the Scottish draft budget for 2018-19. Here are the key points from his speech.

Income tax and wages

The basic rate of income tax has been frozen at 20p, but a new intermediate rate of 21p will be established for those earning between £24,000 and £44,290
A new Scottish starter rate will be introduced, meaning earnings between £11,850 and £13,850 will be taxed at 19%
The higher and additional rate of tax will be increased by a penny to 41p and 46p, respectively
Combined, these changes mean those earning under £26,000 will pay marginally less tax than elsewhere in the UK, while tax will not change for those earning less than £33,000
Public sector pay will increase by 3% for those earning less than £30,000, while those earning more than that will see a 2% increase.
A cap of £1,600 will apply to pay increases for those earning over £80,000 in the public sector

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Health resource funding will increase by £400m, bringing the total to £13bn
£110m for primary care
Mental health investment will increase by £17m, with a pledge to deliver 800 new mental health workers
£550m to support social care delivery via integrated joint boards and NHS funding

£243m is to be allocated to help deliver 1,140 hours of free childcare - £150m in capital funding and £93m in resource funding
The attainment Scotland fund will increase to £179m, with £120m going to the pupil equity fund and £59m in targeted support for children and young people from the most deprived households
An additional £10m is available to support children and young people with complex support needs
Local government will be given £88m to maintain the pupil-teacher ratio
University tuition remains free and £1.8bn will be given to colleges and universities via the Scottish Funding Council

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The economy, jobs and fair work portfolio will be given £270m more
£18m will go to the new national manufacturing institute
£122m more for city region deals
Business research and investment will see a 70% uplift and £10m will be provided for the new south of Scotland enterprise agency
The business rates relief package will total £720m, including the continuation of the small business bonus scheme
The poundage rate inflation will be capped at CPI next year, rather than at RPI
£340m has been allocated to the establishment of the Scottish national investment bank, with £150m over the next two years to go to a building Scotland fund while the bank is set up
Procurement for the Reaching 100 superfast broadband programme begins immediately, supported by £600m over the next four years

Land and buildings transaction tax (formerly stamp duty) will not apply for first-time buyers for properties under £175,000
£756m will be allocated as part of the wider £30bn investment for building affordable homes
£137m will be given to support energy efficiency and heat decarbonisation measures
An initial £10m has been allocated to an ending homelessness fund, with £50m to be provided over the next five years
The bedroom tax will continue to be mitigated

£1.2bn for transport infrastructure, including road and rail developments
A transition to electric vehicles, including green buses, is supported by £20m
£4bn worth of infrastructure for active and sustainable travel as part of a £20bn investment plan over the lifetime of this parliament

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The Scottish Fiscal Commission published its first economic and fiscal forecasts, external
The economy is predicted to grow 0.7% this year and next, and 2.2% in 2022
Wages will increase by 2%, 2.3% and 3.1% in 2017, 2018 and 2022, respectively
Employment is forecast to grow 1.6% this year, but will slow to 0.6% in 2018 and 0.1% by 2022
Productivity growth will remain slow this year (0.2%), before speeding up slightly to 0.5% in 2018 and 1% in 2022

Core funding for councils will increase by £94m - resource budgets are to be protected in cash terms, while capital budgets are increased in real terms
£20m of additional investment will go to the police to protect revenue budgets
A specific figure has not been attached to the new benefits yet, but there was a pledge to provide in-year funding for the new carers allowance to begin in summer 2018