Small underspend helping COVID-19 response

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Kate Forbes

By Democrat reporter

New figures show that prudent budget management is enabling the Scottish Government to maximise its response to the coronavirus (COVID-19) pandemic.

The 2019-20 Provisional Budget Out-turn reveals a 0.7 per cent underspend on a total budget of £34.6 billion – down from 0.9 per cent the previous year – with all of the £258 million underspend carried forward and most having already been deployed.

Borrowing was £45 million less than originally planned and the £717 million collected from the Scottish Landfill Tax and the Land and Buildings Transactions Tax was the highest since the taxes were fully devolved, despite COVID-19 affecting revenues in March.

Finance Secretary Kate Forbes, pictured above,  said:  “The provisional out-turn demonstrates that the Scottish Government spent more than 99 per cent of our budget in 2019-20 on the delivery of public services and supporting the economy.

“Our sensible financial management has provided us with additional flexibility to deal with the effects of COVID-19 and the sustained and damaging post-Brexit economic uncertainty.

“We will continue to maintain a firm grip on Scotland’s public finances and do all we can to protect Scotland’s economy and ensure that, as a country, we are back on our feet as quickly and as safely as possible.

“We have very limited room for manoeuvre within our budget, which is why I will continue to make the case to the UK Government for both an increase in funding and flexibility to allow the Scottish Government to respond fully to the COVID-19 crisis.”

Under the current devolution settlement the Scottish Parliament is not allowed to overspend and attempting to spend the exact amount contained in the budget carries a significant risk of breaching the Treasury’s budget cap.

Meanwhile, still on matters of finance, with 15,500 unprocessed applications pending and £324m of unclaimed funding for the Small Business Grant Scheme and the Retail, Hospitality and Leisure Business Grant Scheme, the Scottish Government must reassure businesses about its decision to close applications early, Scottish Labour has said.

Businesses across Scotland are under unprecedented pressure due to the coronavirus pandemic and many are now reliant on government support for survival.

Despite this, the Scottish Government has instructed Local Authority Finance Directors to bring forward the closing date for applications to the 10th of July. Previously, businesses had until the end of the financial year to apply.

With a substantial number of applications still pending and £324m not yet passed on to businesses, Scottish Labour is urging the government to ensure businesses, the workers they employ, and local communities don’t miss out as a result of bringing forward the closing date.

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Jackie Baillie MSP

Scottish Labour finance spokesperson Jackie Baillie said: “Businesses across Scotland are under unprecedented pressure at the current moment.

“We are facing an economic tsunami and it is the duty of the government to protect businesses, the workers they employ and local communities through this crisis.

“Local government has worked hard to get the money out the door. By bringing forward the closing date for applications the Scottish Government must be sure that business will not be disadvantaged and that all outstanding applications are processed.

“£324m is a substantial amount of money and it is imperative that it is fully utilised to support the wider economy. If there is no further demand from business for existing schemes the government should work with Councils to redeploy the money to critical areas such as education and the wider Scottish economy.

“We cannot let the businesses and workers of Scotland down. It is time for the Scottish Government to be bold.”

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