Official Report 547KB pdf
Deputy First Minister Responsibilities, Economy and Gaelic
Good afternoon. The first item of business is portfolio questions. The first portfolio is Deputy First Minister responsibilities, economy and Gaelic. I remind members that questions 5 and 7 are grouped together, so I will take any supplementaries on those questions after both have been answered.
Real Living Wage
To ask the Scottish Government what action it is taking to encourage businesses to implement the real living wage, in light of reports that Scotland’s level of real living wage employers is, proportionately, five times that of the United Kingdom as a whole. (S6O-05155)
The Scottish Government has a long-term funding partnership with Living Wage Scotland to support the roll-out of the real living wage accreditation scheme. The number of accredited employers has increased from 14 in 2014 to more than 4,000 today, with at least 72,000 workers in Scotland receiving a pay rise as a direct result of their employer being accredited. That has made Scotland the best performing of the four UK nations: it has the highest proportion of workers aged 18 and over who are paid the real living wage or more. That level is now 88.7 per cent against a UK average of 85.4 per cent.
The payment of the living wage is a huge step in tackling in-work poverty. Will the minister join me in acknowledging the businesses in Clydebank and Milngavie that are paying the living wage?
Furthermore, businesses are looking to the UK budget that is on the horizon. Last time, Labour hammered businesses. Will the minister join me in calling for a budget that reverses Labour’s previous punitive approach?
I join Marie McNair in acknowledging those businesses in Clydebank and Milngavie that are paying the living wage. In this day and age, with the cost of living, it is more important than ever that they do that.
The member rightly highlights the importance of the UK budget not only to workers’ wages but to employers. The less money that employers have, the more difficult it is for them to pay the higher wages that they would perhaps wish to see. National insurance contributions and other measures are also an important part of the debate. The Scottish Government continues to try to have the best possible engagement with the UK Government on that, which is not always the easiest thing to do. The UK Treasury could be a lot more helpful with that engagement. We will continue to apply pressure to the UK Government in the run-up to the UK budget.
The latest data shows that, actually, the number of people receiving the real living wage in Scotland is in decline and has been for years. In 2022, the figure was 90.6 per cent; it has now dropped to 88.6 per cent. The numbers are going downwards and not upwards. Rather than congratulating itself, will the Scottish Government take some action to support businesses that want to employ people and pay them the real living wage but are struggling to do so at the moment due to Scottish National Party policies?
As I said in my initial answer, the number of accredited employers has increased from 14 in 2014 to more than 4,000 today, and 72,000 workers benefit from that. We will continue to support the living wage agenda, which Conservative Party members have not always been the most enthusiastic about. It is perhaps a bit ironic that they are calling for more people to get the real living wage when it is not a policy that they have necessarily supported in the past. It is important that the UK budget and Scottish Government measures continue to support the promotion of the real living wage.
Workers Camps (Highlands and Islands)
To ask the Scottish Government what economic assessment it has undertaken of the potential impact of proposed workers camps in and around communities across the Highlands and Islands. (S6O-05156)
I am aware that a number of applications have been submitted to Highland Council for accommodation for temporary workers. Primary responsibility for determining the outcomes of planning applications rests with the council, as the planning authority, and the Scottish Government has not undertaken any separate economic assessment of those proposals. However, application outcomes must be determined in accordance with the development plan, unless material considerations indicate that it should be otherwise. It would not be appropriate for the Scottish Government to comment on live or proposed planning applications.
Last month, the application for one of two proposed worker accommodation sites near Broadford in Skye was withdrawn. However, new locations are being considered and a 450-bed site is still being proposed for Ashaig. Only last year, Kate Forbes rightly said:
“It is absolutely vital that big corporations do not just steamroll in and then steamroll out again leaving locals with nothing but memories of disruption, devastation and anger.”
However, that is exactly what is happening not just on Skye but right across the Highlands and Islands, where massive energy infrastructure projects that have been steamrollered through by ministers and officials here in Edinburgh are leaving local communities paying the price for Scottish National Party targets on renewables.
Is the Scottish Government aware of the locations that are being considered as alternatives to the Torrin Road site, the application for which has now been withdrawn? How will the Scottish ministers ensure that the interests of local businesses are protected and that the concerns of local communities are heard?
With regard to the proposal for a site near Ashaig, I hope that the planning authorities are ensuring that there is proper engagement between the applicant and the communities, and that they are fulfilling their role, too. That is the planning process that is in place, and it should be followed.
The rolling out of infrastructure to promote renewables in the Highlands and Islands is very important to the future economic wellbeing of the region. A few years ago, I read a book called “The Hydro Boys” by Emma Wood, which is about the roll-out of hydroelectricity in the Highlands. I wonder whether the Conservative Party would have opposed that initiative at the time, which brought electricity to the people who were living there.
With massive infrastructure projects, there are occasions when temporary accommodation is required. The planning process is there to ensure that all voices are heard and that planning applications are dealt with appropriately.
The minister alluded to the fact that many of Scotland’s biggest economic opportunities are in its most remote places. One of the ideas in Professor Anton Muscatelli’s recent report on regional economic growth is that we need to have strategic master plans, which would address some of the legacy issues that Jamie Halcro Johnston asked about. Is it time to look at such measures to ensure that we have a lasting legacy in infrastructure such as housing when investments such as the ones that have been mentioned take place?
We are always open to new ideas. A major economic transformation is under way in the Highlands at the moment, which will create many well-paid, good jobs across the whole of that part of the country.
In relation to Professor Muscatelli’s report, although we are always open to new ideas, there are many issues over which we do not have control in this Parliament, such as transmission charges and other factors that influence how such major infrastructure projects are rolled out across the country. There is also the issue of the related community benefits. In theory, we would always want to support such ideas, but we do not have all the tools in the box that we would require to ensure that the process was done properly.
Ferguson Marine (Payments)
To ask the Scottish Government how much in total has been paid from the public purse to Ferguson Marine since the award of the contracts for both the Glen Sannox and Glen Rosa. (S6O-05157)
The contract payments from Caledonian Maritime Assets Ltd to Ferguson Marine Engineering Ltd, or FMEL, for the Glen Sannox and the Glen Rosa were £83.3 million. The Scottish Government loaned £45 million to FMEL prior to its going into administration. Between the nationalisation of Ferguson’s and September 2025, the Scottish Government provided £152.1 million for the Glen Sannox and £143.8 million for the Glen Rosa.
That is really selective use of the figures. We know how much money has been paid. The other day, CMAL told me that £450 million had been paid, but I think that, by the time we add in the loans and the non-recoverable expenses, the figure is close to £700 million. If we take off the true cost of the ferries—£120 million—that leaves £580 million. If each of the workers at the yard was given £1 million, that would leave £280 million, which would be enough to order another six ferries for CMAL. Surely that would have made better sense than the investment that the Government has made.
I gave Edward Mountain the breakdown of the figures that have been provided. I think that, if he adds them up, he will recognise the figure as the accepted figure. I tried to do some quick calculations while he was speaking, but it sounds as though the total figure is similar to the CMAL one that he mentioned. It is therefore a bit unfair to suggest that I was being selective.
Ultimately, we took the approach that we took, first, to ensure that the two vessels were delivered for the islanders and, secondly, to safeguard the yard for the future. We have protected the jobs at the yard. That was critical, which is precisely why the Government stepped in.
In that answer, there was not one word of apology for the hundreds of millions of pounds that have been spent on the two ferries, which are late in being delivered for the islanders and which have embarrassed the workers as a result of the leadership of the Scottish Government. Can the Deputy First Minister tell us whether any further consideration has been given to the repeated calls for someone to pay the price for this disaster? Is any minister finally going to resign for it?
In the light of Willie Rennie’s request, I am more than happy to repeat the apology that I have previously given from this desk in the chamber to all the islanders who have not been able to access a sustainable route because of the delay on the two vessels and because of the project being over budget.
CMutual and Maiden Life Försäkrings (Family Protection Plan Withdrawal)
To ask the Scottish Government whether it will provide an update on its engagement with the Financial Conduct Authority and other organisations regarding the impact on policyholders of the withdrawal of the family protection plan by CMutual and Maiden Life Försäkrings. (S6O-05158)
The Scottish Government has engaged with the Financial Conduct Authority, which has confirmed that it is working with relevant parties to understand the background to the decision and the options for replacement cover. Its priority is to ensure that consumers are appropriately informed and have sufficient opportunity to consider options.
The FCA is also examining the conduct of firms against its requirements, and any decision to intervene will be guided by its statutory objectives and enforcement principles. The Scottish Government will continue to work with stakeholders to understand the implications for credit unions and their members.
Thousands of people—mostly elderly, some very elderly—have been abandoned and left in funeral poverty. Some of them join us in the public gallery today. Each of them took out the funeral policy and paid into it in good faith—many for more than 20 years—so that they could die with the dignity of knowing that their families would not face huge bills. Meanwhile, the greedy directors of the insurance broker CMutual have looted more than £3 million in dividends over the past five years.
Will the minister join me today in urgently pressing the Financial Conduct Authority to take out a section 166 order under the Financial Services and Markets Act 2000? Will the Government continue its dialogue with the coalition of United Kingdom credit unions until all those affected by the scandal secure justice? [Interruption.]
Richard Leonard—
Minister, could you resume your seat for a second?
I say to our guests in the gallery that you are welcome, but we do not encourage clapping, because we are in the middle of our parliamentary process. However, you are most welcome to observe our proceedings. Thank you for your understanding.
Richard Leonard outlines a very serious situation. The Scottish Government and ministers share his concerns, which he has eloquently outlined to the chamber. I add my welcome to the visitors in the chamber who are facing that awful predicament. It is a very distressing time for the policyholders, especially as we approach winter. I am very much aware of the serious issues that we are discussing today.
Yesterday, the Cabinet Secretary for Finance and Local Government and I had a productive meeting with Elaine Rae, the chief executive officer of NHS Credit Union, who told me that she represents 14 credit unions in Scotland. She was joined by Paul Sweeney, who is the deputy convener of the cross-party group on credit unions. That was a valuable meeting; it was helpful for ministers to understand the issues. If I get an opportunity to say hello to some of the people in the gallery after this session, I will take it.
We will continue to put pressure on the FCA. Although it is, of course, an issue that is reserved to the UK Government, the finance secretary is writing to UK ministers about it. We will do all that we can to ensure that policyholders are not left in the lurch and that those who are responsible fulfil their obligations; I know that members across the chamber would like to see that happen. It is a very important issue and it is causing a lot of distress—Elaine Rae expressed that very well when we met her yesterday. We will continue to stand up for the policyholders.
Can any more be said about the Scottish Government’s work with stakeholders to ensure that all those affected receive clear information about their options for reparation and have the appropriate support that they require?
Various parties involved in the debacle are exploring a number of options. We are keen for all policyholders to be kept up to date with those options once they become a bit clearer. As I said, matters related to the FCA are reserved to the UK Government, but we will continue to have a dialogue with the authority and to press home that very important point. We will also continue to engage with stakeholders in Scotland so that we can stay abreast of their concerns as the situation develops over the coming weeks.
I welcome yesterday’s meeting with the minister; it was very productive. However, I will press him on the urgency of the timescale. We have 12 days until people are cut off, so we need urgent action. Will the minister confirm that the Government will write to the FCA to press the need for the section 166 order to be served before policies expire at the end of the month? Will he also give a timescale on convening that working group with the credit union coalition so that we can work collaboratively to ensure that people are not left particularly vulnerable at this time of year?
We absolutely will continue to press the FCA to take appropriate and tough action to make sure that policyholders are not left in the lurch. We will continue to engage with stakeholders. Yesterday’s meeting was very productive, and I thank Paul Sweeney for his role in making sure that that meeting happened quickly. We recognise the urgency of the issue, and I hope that he gauged from the finance secretary’s comments that she, too, recognises that there is a short-term challenge. I notice that she has just entered the chamber. The issues are being taken very seriously.
Shared Prosperity Fund and Pride in Place Programme
To ask the Scottish Government what engagement it has had with the United Kingdom Government regarding the UK shared prosperity fund and pride in place programme. (S6O-05159)
There has been a concerning lack of engagement from the United Kingdom Government on the pride in place programme and the local growth fund, which is replacing the UK shared prosperity fund. Despite a clear commitment from UK Government ministers at the start of the year to engage meaningfully on new funding programmes, we have not yet been given details on funding and delivery, although the Welsh Government was given significant clarity and responsibility for funding more than a month ago. That is completely unacceptable. My colleague Shona Robison has raised that point, as have I, and it would be nice to get some clarity.
When the pride in place programme was announced in September, it was described by the UK Labour Government as “new funding”. We now know that that was not true. What was sold as new investment in communities is a repackaging of the shared prosperity fund. Not only is there no new money, but some areas are worse off than before. Even Glasgow City Council’s Labour group leader was shocked by that.
Does the Deputy First Minister agree that Scotland’s communities deserve better than that sleight of hand from an increasingly desperate and chaotic UK Labour Government?
It will come as no surprise that I agree whole-heartedly. Communities are the beating heart of Scotland. They are key to anchoring local wealth and creating resilient places where people can flourish.
Following up communication from Shona Robison to HM Treasury, I wrote to the Secretary of State for Scotland, because the pride in place programme does not align with our approach to regeneration, and it is concerning that the UK Government’s approach will leave many communities and local authorities worse off. I hope that the UK Government will recognise the impact of its approach and rethink that.
Pride in Place Programme
To ask the Scottish Government what its response is to the United Kingdom Government’s pride in place programme in relation to its impact on devolved issues. (S6O-05161)
We welcome all investment in Scotland’s communities, but it is disappointing that we were not informed of the pride in place plans. We are opposed to the use of the United Kingdom Internal Market Act 2020 to fund activity in devolved areas in Scotland, as that bypasses democratic scrutiny and accountability and does not make best use of public funding.
Pride in place funding for Scotland should have been allocated through the Barnett formula. That would have ensured a clear policy landscape and would certainly have ensured that the approach for the Welsh Government was not different to that for the Scottish Government.
The Welsh Government has been allocated more than £0.5 billion of local growth funding, which it has been told that it can manage and distribute. Meanwhile, considerably smaller funding allocations have been made to Scottish local authorities through pride in place funding, completely bypassing the devolution settlement. What actions is the Scottish Government taking to challenge that gross imbalance in the treatment of devolved Parliaments?
The last time that public funding went to one part of the United Kingdom and bypassed the Barnett formula was in Theresa May’s day. It is very strange that the Welsh Government has received a commitment that it will deliver the local growth fund directly but we have not had even the opportunity for a meaningful discussion on the delivery of the fund in Scotland. It is worrying that devolved Governments are being treated differently, which raises significant questions about the politicisation of public funding.
The Government has raised the issue with UK Government ministers both in writing and in person, and there is an opportunity for the Parliament to ask some questions about why the Welsh Government has received its commitment. It will have responsibility for determining how the money is spent, whereas we do not have such a commitment.
Stirling and Clackmannanshire City Region Deal
To ask the Scottish Government whether it will provide an update on progress with delivery of the Stirling and Clackmannanshire city region deal. (S6O-05160)
The Stirling and Clackmannanshire city region deal, which was initially estimated to bring £214 million of investment overall, is driving economic growth, productivity and prosperity.
To date, more than £35 million has been used of the total £90.2 million commitment by the Scottish and United Kingdom Governments, and progress continues to be made by regional partners across the deal. Employability support is being offered through the lone parent programme and the regional skills and inclusion programme. Innovation continues through the national aquaculture technology and innovation hub, which is due to open soon. Work on the Stirling digital hub is under way, and the regional joint committee recently approved business cases for Stirling’s city park and a digital hub in Callander.
The Deputy First Minister will know that the heads of terms agreement for the Stirling and Clackmannanshire city region deal sets out an ambition to unlock £640 million of private sector investment and deliver more than 5,000 new jobs across the region during its 10 to 15-year lifespan.
However, in June, in response to a written question, it was confirmed that the private sector investment secured to date stands at just £476,000, with 82 jobs created. In the spirit of supporting delivery and maximising the benefits of the partnership for local communities, will the Deputy First Minister set out how the Scottish Government, working with the UK Government and local partners, intends to accelerate progress and what revised milestones and performance measures are in place to ensure that communities—Clackmannanshire, in particular—see the level of investment and job creation that was originally promised?
We are committed to working with all the partners to maximise the benefits of the deal, which is now in its sixth year of delivery. Covid-19 delayed initial progress, but funding was reprofiled to safeguard the £90.2 million of Government investment. Inflationary pressures have also resulted in us working with partners to ensure that outstanding projects remain viable. We have been encouraging value engineering, where possible, and have been exploring other funding streams.
Beyond that, officials from both Governments meet staff of the programme management office fortnightly to ensure that momentum is maintained. That is in addition to annual conversations with all partners to monitor progress.
The bottom line for Keith Brown’s constituents is that we will take on board the queries that he has raised today and ensure that they are taken into account in planning for the future of the deal.
The Stirling and Clackmannanshire deal is a 10-year programme, and we are now operating in year 6. The Government promised that 5,000 jobs would be created. In June, it celebrated and defended the creation of only 82 jobs and claimed that projects were still at an early stage. Does the Deputy First Minister really think that, six years on, people in Stirling and Clackmannanshire will find that explanation anything but disappointing? Real progress and real job opportunities for the people of Stirling and Clackmannanshire are needed.
I agree with the spirit of Alexander Stewart’s question, in that we want progress to be as rapid as possible. Growth deals are a unique way of delivering economic prosperity in Scotland because of the tripartite approach: the UK Government, the Scottish Government and local government are involved, and there is an opportunity for all of us to accelerate progress. The money has been committed and is protected, and it will be spent. We want to ensure that it delivers as many jobs as possible, so we will work cross-government to ensure that that is done.
Glasgow City Regional Economy (Covid-19 Lockdown Impact)
To ask the Scottish Government what action it has taken to improve Glasgow city’s regional economy, in light of the economic effect of the Covid-19 lockdown on the city. (S6O-05162)
As Glasgow celebrates its 850th anniversary, we continue our support across numerous initiatives to improve regional economic growth. Our £500 million commitment to the successful Glasgow city region deal has delivered the new Govan to Partick bridge and the M8 crossing at Sighthill, and we will continue to invest in projects for another 10 years.
We transferred leadership of the Clyde mission to regional partners—an issue that Pauline McNeill is very interested in—alongside £26.5 million of funding. This year, we committed a further £2 million towards engineering and maritime skills. We established the investment zone in partnership with the United Kingdom Government and are actively working with partners to identify opportunities for further regional empowerment.
Anton Muscatelli, in his report on regional economic development, said that Greater Manchester, which is a city of comparable size to Glasgow,
“has been more successful than Glasgow in growing its economy.”
Glasgow has had many successes, as the Deputy First Minister alludes to, but Glasgow city centre has struggled to recover from the pandemic. In May, footfall was 7 per cent lower than it was in May 2019, before Covid. In addition, on the ways that people get into the city, Glasgow now has among the highest parking charges in Europe. Given the on-going challenges with reduced footfall and the impact that that has had on businesses, what specific action can the Scottish Government take to encourage an increase in visitor numbers and to support business?
We all want every part of Scotland to perform as successfully as possible and be as prosperous as possible. A week or so ago, I engaged with the economic delivery board for Glasgow, on which, as Pauline McNeill will know, there is representation from the university sector, businesses and local leadership. We are keen to work with the board to deliver on its ambitions for Glasgow.
The point about Manchester is frequently raised. It is my reflection that Manchester has excelled at being able to deliver quickly on planning and so on. Its reputation precedes it everywhere we go, considering that we talk about it a lot. There is good learning there on how to support all parts of Scotland, but it sometimes does not require as much structural change as we think to unlock economic prosperity.
That concludes portfolio questions on Deputy First Minister responsibilities, economy and Gaelic. There will be a short pause before we move to the next item of business to allow front-bench teams to change positions, should they so wish.
I do not see anybody moving, so we will go straight to the next portfolio, which is finance and local government.
Finance and Local Government
Scottish Aggregates Tax (Contribution to Circular Economy)
To ask the Scottish Government how the new Scottish aggregates tax, due to be introduced in April 2026, will contribute to creating a circular economy. (S6O-05163)
The Scottish aggregates tax will form part of the Scottish Government’s broader support for the circular economy agenda and drive towards net zero. It will complement other measures to promote circular construction practices and is intended to help encourage the minimum necessary use of primary aggregates, maximise the use of recycled and secondary alternatives and incentivise innovation in alternative materials.
Will the minister commit to utilising public procurement to support the uptake of recycled aggregates, and if so, what are his plans for that?
Maurice Golden will be aware that Scotland has a very proactive approach to public sector procurement. The information that we publish on that is extensive and the tracking of performance against the Government’s objectives is thorough. Net zero is one of the drivers of our procurement activity. If the member wants to follow up on that, I am happy to discuss it with him, but he can rest assured that we use all the levers at our disposal, including procurement, to help us to deliver on the Scottish Government’s circular economy and net zero objectives.
Community Asset Transfer Scheme
To ask the Scottish Government what support is being provided to groups and people to make use of the community asset transfer scheme. (S6O-05164)
The Scottish Government funds the community ownership support service to provide expert asset transfer advice and support for community groups that want to make use of community asset transfer legislation. The Scottish Government also provides financial support through the Scottish land fund for communities across Scotland that wish to own and manage land, including asset transfers. Between 2021 and 2026, more than £32 million has been provided in that regard to 249 organisations.
As the minister knows, I have written to him about the current situation of Airdrie and Coatbridge Harriers, a fantastic local group based at the Coatbridge outdoor sports centre that has supported thousands of young people across the area for more than 30 years. The group recently appealed the council’s decision to reject its application for a community asset transfer for the sports centre, but that was rejected as it was outwith the agreed timescales.
As the minister knows, I find that situation ludicrous, because it was the council, in its official letter to the group, that, as the minister noted, outlined the timeline for appealing. I find it unacceptable that our policies in this area have no commonsense safeguards built in to account for such situations, in which honest mistakes are made and groups miss out on real opportunities. What more can the minister do to support the group, and would his officials be willing to meet me, the group and the council to try to find a way forward?
I am aware of the situation that the member raises with the Airdrie Harriers asset transfer request. It is deeply regrettable, and I have responded in writing to the member on the matter. The situation now is that all those who are involved, including the authority and community organisations, must follow the asset transfer legal process, and ministers have no power under the Community Empowerment (Scotland) Act 2015 to amend or extend that process.
However, the 2015 act is there to enable groups such as Airdrie Harriers to realise their aspirations for ownership of local assets. My officials have spoken to North Lanarkshire Council about that regrettable situation so that lessons are learned, and I expect the council to do everything in its power to support the group. There is no reason why a solution cannot be found outwith the confines of the legislation, and I urge the local authority to work with Airdrie Harriers to ensure the continued provision of sporting facilities in the area. I will also write to Jim Logue, the leader of North Lanarkshire Council, on the matter, and I am happy to meet the group if required, subject to my availability.
High initial costs such as maintenance and insurance, lack of experience and funding are all still major obstacles to community asset transfers taking place. What is the Scottish Government doing to remove those obstacles and support communities?
As I indicated in my earlier answer, the Scottish Government has provided more than £32 million, which has enabled 249 organisations across the country to take advantage of the community asset transfer legislation that was introduced by this Government. The Government continues to look for opportunities through our broader work to build capacity in local organisations to enable them to take advantage of that legislation. I recognise that some groups will be more able than others to take advantage of it, and we will continue to engage with local groups across the sector to support their development as best we can to enable them to take advantage of those opportunities.
United Kingdom Budget (Scotland’s Public Finances)
To ask the Scottish Government whether it will provide an update on its engagement with the United Kingdom Government regarding the upcoming UK budget and any implications for Scotland’s public finances. (S6O-05165)
I wrote to the Chancellor of the Exchequer two weeks ago seeking an urgent meeting, and the First Minister hoped to meet the Prime Minister, but the UK Government has not agreed to those meetings. The mixed messages and speculation on what the UK Government may do in its budget have been unhelpful as we consider the implications for our own fiscal position.
When I met the Chief Secretary to the Treasury last month, I stressed the importance of the UK Government speaking to us about the impact of its plans on Scotland and our finances. I am very concerned that, yet again, Scotland will be treated as an afterthought.
The UK budget will be delivered on 26 November, which is a month later than last year. What impact will that have on the Scottish Government’s ability to plan effectively for 2026-27? Would the cabinet secretary agree that Scotland needs greater borrowing powers in order to smooth potential shocks that may be created by the UK budget?
The late UK budget means that I am not able to deliver the Scottish budget until January. The uncertainty and lack of engagement from the UK Government has also been very unhelpful as we try to anticipate the impact on our own budget.
Under the current arrangements, we are managing considerable challenges and volatility with limited powers. It is clear that we need greater fiscal flexibilities to support effective budget management, and I have urged the UK Government to work with us to provide that. Although the chancellor has not accepted a meeting, I expect to speak to the Chief Secretary to the Treasury before the budget, and I will continue to press Scotland’s case.
Last year, Labour broke its promise to workers that it would not increase tax by introducing a jobs tax, which has undermined jobs and investment and impacted growth. The Scottish National Party, across two of its budgets, has also broken its manifesto pledge, which has resulted in what the Auditor General for Scotland has pointed to as a £1 billion shortfall in the tax take and undermined growth in the process. Is it not the case that both Labour and the SNP have broken their pledges to the Scottish people on tax? Is it not time that both Governments focused on doing the right thing by Scotland, which is to focus on the tax take and not simply increase tax at every opportunity?
First, revenues that are raised from tax are essential for public services. Of course, under the Tories’ plans, £1 billion would come out of public services because of tax cuts that cannot be afforded. We have set out our intentions for taxation in our tax strategy. The tax policy for 2026-27 will be announced in the budget on 13 January.
Local Authority Funding
To ask the Scottish Government whether it will provide a response to COSLA’s request for additional funding to support local authorities in the forthcoming budget. (S6O-05166)
I welcome the meaningful budget engagement between the Scottish Government and the Convention of Scottish Local Authorities that has taken place throughout the year, including during my meeting with the new COSLA resources spokesperson at the COSLA conference on Friday 14 November. The outcome of the 2026-27 local government finance settlement will be announced as part of the Scottish budget on 13 January.
In May this year, the Accounts Commission forecast a £528 million revenue budget gap for 2026-27. As a result, increasingly difficult decisions are being made by councils to meet their legal obligations to balance their budgets. In its recent correspondence with the United Kingdom Government, COSLA set out the case for additional funding to the Scottish Government to facilitate a sufficient local government settlement, highlighting the acute pressures in social care and housing.
With the fiscal framework having been published, can the cabinet secretary outline how she will work with COSLA to ensure that there is effective delivery of the necessary budget provision, bearing in mind that the UK Government has delayed the autumn budget, which has seriously undermined the timescales that are available for the Scottish Government to publish its budget?
The Scottish Government has a long history of working with local authorities and COSLA to ensure that council finances are sustainable. With our partners and local government, in the context of the recently agreed fiscal framework, we will continue to ensure that the budget challenges that are facing both spheres of government are properly understood. Despite a decade of UK Government austerity measures, the total local government finance settlement increased by almost 50 per cent between 2013-14 and 2025-26. The Scottish Government will continue to ensure that the people of Scotland receive the high-quality public services that they expect and deserve.
United Kingdom Fiscal Decisions (Impact on Scottish Budget and Local Government Funding)
To ask the Scottish Government what assessment it has made of the impact of UK fiscal decisions on the Scottish budget and the certainty of local government funding. (S6O-05167)
We are considering the implications of all possible United Kingdom budget outcomes for the Scottish budget, but the lack of any meaningful engagement from the UK Treasury is not helpful. I appreciate that that will also have implications for local government. As I said earlier, we have a history of working with local authorities and the Convention of Scottish Local Authorities to ensure that council finances are sustainable. We will continue to work with our partners across the public sector to ensure that communities across Scotland receive high-quality public services.
Across my constituency of Banffshire and Buchan Coast, public services are under real pressure. The Conservative-led administrations in Moray and Aberdeenshire have been making decisions that are harming some of our most vulnerable people, while passing the buck to the Scottish Government. Can the cabinet secretary set out what multiyear certainty and flexibility will be available in the next Scottish budget and the new deal for local government, given late and tightening UK fiscal events, so that my constituents can be confident that, regardless of local and UK decisions, the Scottish Government is doing all that it can to protect our public services?
On 13 January 2026, I will set out the Scottish budget and the spending review, which are being developed against the backdrop of a late and highly uncertain UK Government budget. I confirm that the budget will protect and build on the substantial investments that the Scottish Government has already delivered for the people of Scotland. We will continue to work with our partners across the public sector to provide additional certainty and to address any budget challenges, including on how we operate and collaborate on reforming public services to ensure that they are sustainable and people centred.
Question 6 has been withdrawn.
“Scottish median incomes fact sheet”
To ask the Scottish Government what assessment it has made of the Scottish Fiscal Commission’s recently published “Scottish median incomes fact sheet”. (S6O-05169)
The Scottish Government welcomes the Scottish Fiscal Commission’s fact sheet. Its estimates of net median income in 2024-25 and 2025-26 show that a majority of taxpayers in Scotland are expected to pay less than taxpayers in the rest of the United Kingdom. That demonstrates that our commitment to ensure that the majority pay less than is paid elsewhere in the UK is being delivered.
Once again, Scottish ministers have repeatedly told us about their interpretation of forecasts. Just for once, can we have an admission based on what has actually happened? The facts, as presented by the SFC and His Majesty’s Revenue and Customs for outturn year 2023-24, show that median Scottish taxpayers paid more than their counterparts in the rest of the UK. Will the cabinet secretary finally accept the facts and stop misleading the public?
Again, the SFC fact sheet, which was released on 11 November, shows that, after accounting for deductions from taxable income, most Scottish taxpayers are expected to pay less income tax than they would in the rest of the UK in 2024-25 and 2025-26. Accounting for deductions such as pension contributions is required to reflect the tax that is actually paid by taxpayers.
The fact sheet demonstrates that our commitment to ensure that the majority pay less than elsewhere in the UK is being delivered. For the remainder of the session, we will maintain the commitment that more than half of Scottish taxpayers will pay less income tax than they do in the rest of the UK. [Interruption.]
Members, when a member has the floor it is only showing courtesy and respect to listen to them.
Whatever the Government’s interpretation of the figures, I think that the cabinet secretary has to accept that many people feel that they are paying higher taxes and that Scotland has a reputation as a high-tax country, with no discernible improvement in public services. Will the cabinet secretary reflect that in future decisions about taxation?
First, I acknowledge something that Willie Rennie said. People are feeling the pressure of the cost of living crisis. They feel that their income is not going as far, given the cost of food, utility bills and their mortgages, all of which are putting pressure on household incomes. I recognise that, but the Government’s tax policies have raised important additional funding for public services.
As I said in an earlier answer, we set out in our tax strategy our position with regard to what we want to see going forward. Of course, we will have to see what next week’s UK Government budget brings, but we recognise the importance of the issue to people’s household incomes, and we have taken measures to help to sustain them. We will continue to do what we can in that spirit.
A77 (Road Safety Improvements)
To ask the Scottish Government how much it has allocated in its budget for the improvement of road safety on the A77 trunk road. (S6O-05170)
Since 2007, the Scottish Government has delivered five major A77 improvements, totalling £64 million, including the £29 million Maybole bypass. In addition, approximately £425,000 has already been budgeted for road safety work on the A77 this year. We are working with local people through the south-west roads focus group and the A77 campaign group to develop recommendations for further targeted improvements on the A77.
The cabinet secretary clearly knows the concerns of local people regarding those roads, and I thank the Cabinet Secretary for Transport for meeting community campaigners to hear their concerns.
Given the key economic importance of the A77 not only to the south-west of Scotland but to the whole country, does she believe that the figure that she mentions is enough to significantly address the problem and ensure that it will deliver an economic benefit to the south-west?
I am pleased that Carol Mochan recognises the Cabinet Secretary for Transport’s engagement with local people. The Government recognises the strategic importance of the A77 to Scotland’s economy. We value the critical link that it provides to the wider trunk road network and to the markets in the rest of the United Kingdom and Europe.
Making improvements to the A77 is one of the 45 recommendations that are included in the second strategic transport projects review, which was published in December 2022. The Government is committed to engaging with interested parties on strategic transport matters and supporting the users of the A77.
I know that the Cabinet Secretary for Transport will continue to listen to the views of local people.
Although I welcome any funding for those vital upgrades, we have just learned that the Scottish Government has increased its own staffing costs by £53 million in 2024-25. Can the cabinet secretary tell communities from Maybole to Cairnryan why Government bureaucracy costs can rise by tens of millions of pounds a year, yet the A77 still receives nowhere near the focused investment that is needed to make it safe?
I have just set out the investments that are being made in the A77, and major investments are happening in other parts of the trunk road network. I am sure that the member will be aware that the financial sustainability delivery plan, which was published in June alongside the public service reform strategy, set out a very clear direction of travel for reducing staffing numbers, particularly in corporate costs. That shows that we very much recognise the importance of diverting as much funding as possible to front-line services, and that is what we will continue to do.
That concludes portfolio questions on finance and local government. There will be a short pause to allow everybody to be in position for the next item of business.