Finance Secretary Katie Forbes, Labour’s Jackie Baillie and Greens’ Patrick Harvie.
By Bill Heaney
The eligibility criteria for business support for cash-strapped businesses are too tight and not all the existing money is being spent by the SNP government, according to interim Labour leader Jackie Baillie, the MSP for Dumbarton.
She told the Holyrood parliament: “For example, 57 per cent of the coronavirus restrictions fund was allocated, but 4,000 applications were rejected. Will the cabinet secretary [Katie Forbes] urgently review the criteria for business support funds, so that more businesses get help?”
Ms Forbes was updating the Budget in order “to give as much early clarity to businesses, public bodies and communities as I can and to be as transparent as possible.”
She maintained: “This is a budget for the nation. It reflects the challenges that face each family and business. However, to deliver certainty, the Parliament must pass the budget.
“I have met every party, individually and collectively, to help reach an agreement on the 2021-22 Scottish budget. We are still in the throes of a national emergency, and it is important that the Parliament works together to respond to it.
“In advance of final allocations in the spring budget revision on 25 February, I can confirm that further 2020-21 non-recurring Covid support will be made available.
“There will be £275 million for local government for support that is needed due to pressures from Covid, including in relation to lost income. Councils will have the freedom and flexibility to decide how that money is deployed to support the range of Covid-related pressures that they face, ensuring continuity for the critical services that they provide
“There will be £40 million for local government to support the on-going deployment of safety mitigations in our schools. That builds on the £50 million that we previously committed and provides certainty to local government as we proceed with the phased reopening of schools and early learning and childcare settings.
“There will be £60 million for further and higher education, which includes £40 million of resource funding to help colleges and universities maintain research activity, protect jobs and help students, and £20 million of additional capital to boost research and knowledge exchange.
“There will be £25 million to tackle poverty and inequality. Taken together with projected under-spends on wider measures, that will enable us to make two key investments. First, there will be a further £100 Covid hardship payment for children and young people who receive free school meals on the basis of low income. The funding offered will also be extended to children who receive free lunches in early learning and childcare settings.”
She added: “We know, however, that families with children are not the only people who are struggling financially. Therefore, we will increase by an additional £20 million the funding that is available to councils to tackle financial insecurity in their local areas.
“Last but not least, there will be £5.7 million to relieve Covid pressures on forestry.”
According to Ms Forbes, the United Kingdom Government confirmed this week that we will be provided with a further £873 million in resource, £236 million in capital and £41 million in financial transactions for the financial year 2020-21. Those sums are on top of the previously guaranteed £8.6 billion.
She added: “That is welcome. Due to our being at a late stage in the financial year, that money can and will be carried over into 2021-22.
“The following funding proposals are subject to parliamentary approval of the budget and will be taken forward in the event that our 2021-22 budget assumption of an additional £500 million of Covid consequentials is realised and that requisite funds are available via the Scotland reserve. The fact that the funding is likely to be non-recurring constrains what it can be used for.
When I presented the budget last month, I made it clear that, if resources allowed, I would extend 100 per cent non-domestic rates relief for properties in the retail, hospitality, leisure and aviation sectors to cover all of 2021-22.
“I am now in a position to provide businesses with that certainty. That meets the number 1 ask of the business community and demonstrates our commitment to supporting the economy. So that resources can be targeted at those who need them most, we are working with councils to ensure that the application process will be live before bills are issued.
“In addition to extending 100 per cent rates relief for those sectors, we will continue to give newspaper publishing 100 per cent non-domestic rates relief in 2021-22, with careful consideration of the conditions set out by the National Union of Journalists. We will also defer the removal of charitable rates relief from mainstream independent schools to 1 April 2022.
“The impacts of Covid will continue beyond this academic year and we must continue to support a longer-term programme to enable children to catch up on missed education. Therefore, we will provide a further £60 million to support and accelerate that process. That money will be available for purposes that include ensuring that schools have sufficient teaching and support staff to meet the needs of children and young people across Scotland.
“We are aware of the financial impact that the pandemic has had on households and want to provide support during this time. I confirm that we will invest an additional £100 million in 2021-22 to help low-income households. We will announce more details of that investment after it has been fully discussed with the Convention of Scottish Local Authorities.
“I want to ensure that the UK Government does not claw back any of the support that we provide, for example through reduced benefit payments, and will therefore ask UK ministers to help us help people in hardship during this difficult time.”
The Minister said: “I have two further points to make. To support a sustainable economic recovery, I am now proposing an additional £50 million in capital for town centres and 20-minute neighbourhoods. That will bring this year’s investment for the place-based investment programme to £105 million and will support regeneration in local communities.
“We know that the tourism sector has suffered deeply due to the pandemic, and we want to support its strong return so that, when the time is right, we can all enjoy the world-class offerings that Scotland has to offer. I am therefore pleased to be able to provide a further £10 million in capital funding specifically for tourism infrastructure in our rural communities next year. That is separate from the doubling of the rural tourism infrastructure fund, as already published in the budget.”
Jackie Baillie told Ms Forbes: “I whole-heartedly welcome the extension of non-domestic rates relief for many businesses for all of the next financial year—that was a key ask in Labour’s budget priorities—which provides certainty for businesses in the period ahead.
“I also welcome the additional funding for health services, particularly the funding for mental health. However, it falls well short of what is required. In England and Wales, mental health spending is more than 11 per cent of the overall health budget; by comparison, in Scotland it is about 8 per cent of the health budget.
“In the light of the increased demand for mental health services for people with existing conditions, never mind those with new mental health problems, will the cabinet secretary commit to a greater percentage share of NHS funding being allocated to such services, as the Royal College of Psychiatrists has called for?”
Katie Forbes said: “Jackie Baillie referred to the additional funding for mental health services, which I heard her welcome. She knows that, if she believes that those services should have a greater percentage share, I am open to hearing all and any proposals.
“However, Labour will need to prioritise its proposals on matters that currently range from the pay gap to local government, and now mental health. However, I will be more than happy to work with her on those.”
Patrick Harvie said his Green Party welcomed the additional funding for energy efficiency, “which will ensure that a green recovery can be carried out in a way that will save people money in their household budgets.
“However, there is a need to go further on achieving such savings much sooner—especially given that there have been fewer than half as many applications for the Scottish child payment as there are eligible children. Is the cabinet secretary continuing to examine other ways in which we can expand eligibility for universal benefits, such as free bus travel and free school meals?”
Kate Forbes replied: “I have appreciated the constructive and on-going discussions that we have had with Patrick Harvie and the Scottish Greens on where the budget could go further.
“Budget negotiations are normally conducted behind closed doors, but I think that it is important to update Parliament on these matters. I look forward to continued discussions with the Greens on their priorities, particularly on anti-poverty and energy efficiency measures.
“I say unequivocally that I am absolutely happy to continue our discussions on universal benefits, including free bus travel.
“Patrick Harvie will know that the relevant instrument has already been laid to give effect to the proposal that was made in last year’s budget negotiations to secure free bus travel for under-19s. I want to continue to negotiate and to work constructively on where we might go further.”