The Scottish Budget

  • Debra Lowndes
  • 29 January 2021 16:18

Scottish Finance Secretary, Kate Forbes delivered her 2021/22 Draft Budget on 28 January 2021, with a spending agenda to deliver a fairer, stronger, greener Scottish economy and a focus on jobs, health and equality.


The spending plans are ambitious, given that spending proposals to support ongoing business, public services and health needs are in part based on the anticipated release of £500 million of additional funding from the UK Government's £21 billion COVID-19 reserve, which has not yet been confirmed.


Add to this, an inflationary increase to the starter, basic and higher rate bands but no changes in the Income Tax rate, which will result in Scottish taxpayers seeing a slight reduction in the tax paid based on their current income, but no additional Income Tax funds to support the spending plans.

The Scottish budget prioritised a national mission for skills and employment opportunities with a £100 million Green Jobs Fund and a commitment to establish a Green Jobs Workforce Academy.

With lifelong health and wellbeing also a priority, the Budget included a £68 million Scottish Child Payment intended to lift an estimated 30,000 children out of poverty and funding of £145.3 million for tackling alcohol abuse and reducing drugs deaths.

With an additional £150 million allocated for woodland and forestry through a low carbon fund, a promise to invest £2 billion to decarbonise travel and the heating of buildings and support for new, green Scottish industries – the future certainly looks greener.

Together with a commitment to extend the current 100% non-domestic rates relief (available to properties in the retail, hospitality, leisure and aviation sectors), for at least the first three months of the new financial year, local councils who choose to freeze their council tax at 2020/21 levels will receive compensation which equates to a 3% increase in council tax.

In addition, almost £100 million has been set aside for improvements in digital connectivity, to ensure continued funding for the Reaching 100% programme and improved mobile coverage through delivery of 4G and 5G infrastructure.

An ambitious spending programme which may require some tweaking following Rishi Sunak’s Budget announcements on 3rd March, we will watch that space.


Mercia can not only help with your communication to your clients on Scottish Budget but also have a range of packages reviewing the Chancellors Budget, these will enable you and your clients to be fully aware of the impacts and opportunities of the UK Budget.  Rishi Sunak will deliver his budget on 3 March 2021, make sure you check out our Budget Summary page today.

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