Deputy First Minister Responsibilities, Economy and Gaelic
The first item of business is portfolio questions. I remind members that questions 1 and 3 are grouped together and that I will take any supplementaries on those questions once they have both been answered.
United Kingdom White Paper on Immigration (Impact on Economic Growth)
To ask the Scottish Government what assessment it has made of the potential impact on Scotland’s economic growth of the UK Government white paper on immigration. (S6O-04672)
The UK Government immigration white paper completely fails to account for Scotland’s distinct demographic or economic needs. Scotland’s public services, communities and economy all benefit from inward migration.
The decision to end international care worker recruitment and the planned changes to the graduate visa and skilled worker visa schemes are short-sighted and will prove damaging to sectors that necessarily rely on international talent.
The Scottish Chambers of Commerce has stated that UK Government plans for immigration present a serious challenge for Scotland’s economy and workforce. The Labour Government’s rhetoric is demonising friends, neighbours and loved ones who have made their home here and are a valued part of Scottish society. Given that business leaders and public services have warned that the reforms will cause labour shortages and undermine business confidence, has the UK Government provided any assurance to Scottish ministers about its plans?
Yesterday, the First Minister met representatives from social care, education, the rural economy, tourism businesses and local government to discuss the implications of the UK Government’s immigration white paper. We continue to engage urgently with the UK Government, highlighting the potentially deeply damaging impact that its measures will have on public services, communities and the economy. Other stakeholders have backed up much of what has been said about that potential impact in the press.
Scotland’s working-age population is growing only because of migration. We call on the UK Government to recognise Scotland’s distinct migration needs and to work with us to deliver tailored migration solutions for Scotland.
United Kingdom Immigration Policy (Impact on Labour Market)
To ask the Scottish Government what assessment it has made of the potential impact on Scotland’s labour market of the Prime Minister’s recent statement on immigration policy. (S6O-04674)
We expect the United Kingdom immigration white paper to have a damaging effect on Scotland’s economy, because it fails to account for Scotland’s distinct demographic or labour market needs. Our ambition is to ensure that immigration delivers for Scotland as well as for the rest of the UK.
Our working-age population is growing only because of migration, so we want a tailored migration solution for Scotland.
The Deputy First Minister mentions other parts of the UK. Has she had any discussions with other parts of the UK? The last time that I was in the lake district, restaurants and shops were closing early, presumably because they did not have enough staff. Has she pointed out to the UK Government that other countries, such as Canada and Australia, have regional or state-specific migration policies?
Not only have we pointed out the fact that other countries allow for distinct immigration solutions on a state basis, but we have pointed out the comments from stakeholders about their particular needs. John Mason mentioned the hospitality industry; the same could be said for the food and drink industry and the care sector.
Previously, we worked with stakeholders in rural and island Scotland to design a rural visa pilot proposal that would reflect the needs of communities and economies. There is on-going disappointment, particularly from businesses, that that potential solution continues to be ignored.
Over the past few years, net inward migration to the United Kingdom has been at record levels. Contrary to expectations, it has more than doubled since Brexit. However, relatively few of those new migrants come to settle in Scotland compared with other parts of the United Kingdom. Why does the Deputy First Minister believe that to be the case?
The figures show that payrolled employments of non-European Union nationals in Scotland have been rising since 2020. When it comes to tax rates, the most recent data from His Majesty’s Revenue and Customs shows that, across different tax thresholds, we continue to see, on average, just over 4,000 more people moving in than leaving. That demonstrates that Scotland is an attractive place to work.
The point that we are making—which I think that Murdo Fraser also hears from businesses—is about a tailored approach. Particular sectors have repeatedly called for a tailored migration solution—soft fruits was one obvious sector, in the aftermath of Brexit—so that businesses and industry can recruit individuals to meet specific needs. They are currently restricted in doing so because of salary thresholds or other measures that are imposed by the UK Government.
Glenfield care home in Greenock is earmarked for closure, citing recruitment issues and the national insurance hike as primary reasons. Another care home manager, at Campbell Snowden House, warned that other care homes in my region will follow. He also admonished politicians for using language such as “low-skilled workers” when it comes to the care sector, saying that they are highly-skilled jobs and that it is a very respectable career. What is the Scottish Government’s plan B if the white paper comes to pass? How do we ensure that vital lifeline sectors, such as the care sector, will have the staff that they need in order to survive?
Jamie Greene is right to identify the double hit of the immigration white paper and the hike to national insurance contributions, both of which could have devastating impacts on the care sector. That is not just my view—it is also the view of Donald Macaskill and others who work in the sector. The data is stark, and the evidence is clear. We have enough qualitative anecdotal evidence to illustrate what the impact could be. Jamie Greene is also right in his comment about the use of “low-skilled workers”, because we know how critical it is that we have a workforce in the care sector. Few things are as important to us, as a society, as the care of vulnerable people.
Scottish Child Abuse Inquiry
To ask the Scottish Government whether it will provide an update on the Scottish child abuse inquiry. (S6O-04673)
The Scottish child abuse inquiry is investigating abuse experienced by children who were in care in Scotland between 1930 and 2014. The inquiry has reviewed a wide range of care settings and, to date, has completed eight phases of investigation. It has now commenced phase 9, which is focusing on healthcare and specialist schools. When the inquiry concludes, it will publish a final report that could make recommendations to improve practice, policy and legislation. We are committed to carefully considering the inquiry’s findings and recommendations.
I have heard several harrowing experiences of historic abuse from constituents who were placed in care as children. Will the cabinet secretary advise members what steps the Scottish Government is taking to ensure that survivors of such abuse receive adequate support following their participation in the Scottish child abuse inquiry, as they find their voices to relive their horrific childhood experiences, the toll of which has haunted many of them throughout their adult lives?
Elena Whitham raises a really important issue. Having engaged directly and personally with survivors, I recognise the importance of the point that she makes, and I acknowledge the courage of survivors who have shared their experiences with the inquiry. Recognising the impact of trauma, which she identifies, the inquiry follows a trauma-informed approach to ensure dignity and respect, and to seek to minimise retraumatisation. The Scottish Government is supporting survivors through initiatives such as the Future Pathways service and the survivors of childhood abuse support fund, which fund trauma-informed services. We want to work with partners and survivor-led organisations to ensure that those services are accessible, responsive and person centred.
Export and Investment Support Policies
To ask the Scottish Government what assessment it has made of the effectiveness of its current export and investment support policies. (S6O-04675)
The Scottish Government subjects its export and inward investment policies to regular evaluation. The most recent independent review, which was conducted by Aston University, has been published on the Scottish Government’s website.
Our export and inward investment programmes are measured and tracked through robust data and analysis from a range of sources, including HM Revenue and Customs, “Export statistics Scotland” reports, Scottish Enterprise and EY.
Our evidence-based approach to export promotion and inward investment has generated £1.6 billion of additional overseas sales over three years and has maintained Scotland’s position as the most attractive location outside London for inward investment over the past nine years.
The Scottish Government has attacked the recent deal with the European Union, which it says does not go far enough. However, in the same breath, the Scottish Government says that it welcomes the progress on sanitary and phytosanitary checks, energy co-operation, youth mobility, and trade in services and steel. Now that the United Kingdom Government is finally delivering for Scottish exporters by cutting red tape on food exports, among other things, will the Scottish Government hit its target of ensuring that, by 2029, 25 per cent of gross domestic product will be made up of exports?
I might advise the member to speak to the Scottish fishing industry about its view of the deal that has been struck with the European Union.
Of course, the deal includes elements that we welcome, because we welcome any reduction in barriers to trade with the EU, which is Scotland’s biggest export market. We are still waiting for the UK Government to provide full details of the deal, but nothing that has been achieved in it will make up for our lost membership of the EU.
The target that has been set for exports from Scotland is indeed ambitious. Since it was set in 2019, we have faced a number of global challenges, including Covid and Brexit, as well as conflicts around the world and other turbulent issues that have affected the ability of Scotland and other countries to engage in international trade.
Of course, the programme for government included a lot more support for increasing exports, because we recognise the importance of achieving the export target. For example, more resources are being provided to Scottish Chambers of Commerce for its trade missions, and we now have the six-point export plan. We are confident that we will make very good progress towards that target, which is why we addressed that important issue in the programme for government.
Does the minister agree that, during such turbulent economic times, it is more important than ever that we champion our world-class Scottish products, such as salmon and whisky? Will he outline how measures in the programme for government, such as the Scottish Government’s new six-point export plan, will assist with that?
Colin Beattie raises an important point, which is that now is the time to give more attention to global trade, rather than pull back in response to the current challenges. He is right to highlight the amazing food and drink products that we have in this country, which include Scottish salmon, Scottish seafood and Scotch whisky.
In the past few weeks, I returned from a trade mission to Japan, where there has been an increase in seafood imports from Scotland—there has been a dramatic increase in the amount of Scottish mackerel that goes to the Japanese market. We are also promoting Scottish salmon and whisky exports. There seems to be an ever-increasing appetite for Scottish produce in the Japanese market, and we are finding that that story is being replicated around the world.
Colin Beattie is right to say that we have great produce and that we must provide more support than ever to exporters—indeed, we discussed that very issue at the reception that the Scotch Whisky Association hosted last night in the Parliament.
What assessment has the minister made of the possible impacts on trade and investment of the imposition of a hard border between Scotland and the rest of the UK?
Trade with the rest of the UK is very important to Scotland, and we want that to continue. However, trade with the European Union is also very important. The EU is our biggest export market. Although the US is the country with our biggest export market, our biggest overall export partner is the EU. Therefore, we must ensure that we export as much as possible to the European Union and minimise the barriers to that trade. At the same time, we must continue the very healthy trade that we have with the rest of the UK.
The minister will have seen this week’s reports about the court appeal of Sanjeev Gupta’s group to fend off an attempt to close down its steel mills, particularly in England. In my view, that raises concerns about the group’s investments in Scotland. What communications is the minister having with GFG Alliance in relation to the Alvance British Aluminium plant and Liberty Steel Dalzell? Those are important plants but, so far, I have heard nothing from the Government.
I assure Willie Rennie that we pay close attention to those issues all the time, and we will continue to do so.
Analysis that the Scottish Parliament information centre produced late last year shows that the value of international exports from Scotland remains below the Scottish Government’s target of 25 per cent, and that the rest of the UK still accounts for most of Scotland’s services and manufacturing exports. In the light of that, what action is the minister taking to strengthen our vital internal export market? How is he working with the Department for Business and Trade to ensure that Scottish products have access to competitive international markets?
I very much welcome the focus on increasing Scottish exports. We have to be clear that the exports target of 25 per cent of gross domestic product is for 2029, but we are only in 2025. As I mentioned earlier, we are putting a lot of measures in place to achieve that ambitious target, hence the additional emphasis on supporting exports and global trade in the programme for government that the First Minister recently published—which I hope the member welcomes. The additional resource that Scottish Chambers of Commerce is getting has been warmly welcomed. We have to work flat out to make the most of our export opportunities, and that should be our best response to the current turbulence in global trade.
Grangemouth Oil Refinery (Closure)
I remind members of my voluntary entry of trade union interests in the register of members’ interests.
To ask the Scottish Government what assessment it has made of the economic impact of the closure of the Grangemouth oil refinery. (S6O-04676)
A robust and independent analysis of the economic contribution of the Grangemouth refinery was conducted by PwC, and the findings of that assessment were published in August 2024. Our analysis notes that the economic value of the Grangemouth refinery, its supply chain and employee spending was estimated to be £403.6 million in 2023. However, the economic contribution of the refinery would not have been possible without the dedicated and highly skilled workforce, and I wish once again to pay tribute to them and to confirm my support for them at this difficult time.
Today’s inaugural Grangemouth investment task force meeting is welcome, but the next set of refinery workers are due to leave the site, their jobs declared redundant, by 31 May. The cabinet secretary knows that time is of the essence so, to accelerate the chances of retaining work and jobs, will the Government push for an immediate independent review of the assets at the refinery? Will the cabinet secretary update Parliament this afternoon on the 66 potential investors, who were previously named, and will she outline what can be done to speed up the investment process?
With regard to the second question, which was on the progress on the 60-plus interests, I suggest that I take that offline to give Richard Leonard and other MSPs an update on progress. This is obviously quite a fast-moving situation, and I do not want to give Mr Leonard out-of-date information.
We have pushed for an independent review of the asset. It has been one of the big asks from the union, and we are pushing for it, too.
On the first question, which was about time being of the essence, because of the impending deadline of 31 May, the member is absolutely right. We are therefore keen to look for opportunities through project willow that can be delivered as quickly as possible. As he will know, and as I have said before, we think that the closure of the refinery is premature.
A key element in securing a green industrial future for the Grangemouth site is the development of carbon capture in Scotland, so it is vital that the United Kingdom Government provides support not only for carbon capture projects in England but for the Acorn project, too. Does the Deputy First Minister agree that it is essential that the UK Government takes swift and urgent action to support Acorn, which in turn will help us deliver the future that Grangemouth deserves?
I agree. We are still awaiting a final decision on Acorn and confirmation of the full funding package and timeline. There are so many issues that are contingent on Acorn getting the green light, including Grangemouth’s future, as well as other issues related to meeting our climate change targets and the energy transition.
We urge the Chancellor of the Exchequer to green light the project in the upcoming spending review, which is only a matter of weeks away. That would unlock more than £80 million, as committed by this Government’s First Minister in the most recent programme for government.
Visitor Levy (Highlands)
To ask the Scottish Government what discussions the economy secretary has had with ministerial colleagues regarding the potential impact on businesses and residents in the Highlands should a visitor levy be introduced. (S6O-04677)
I am answering the question as the minister responsible for the visitor levy.
The Visitor Levy (Scotland) Act 2024 requires local authorities to prepare and publicise an assessment of the impact of any proposals to introduce a visitor levy, including on local businesses and residents. I regularly discuss a range of issues with my ministerial colleagues, and I hope to meet Ms Forbes shortly, in her capacity as an MSP, as well as Highland Council representatives to discuss the possible introduction of a visitor levy in the Highland Council authority area, as detailed in the act that was passed last year.
I understand that Ivan McKee is the minister responsible for this, but given the portfolio team that is in front of us, it is disappointing that a question about the Highlands was answered by the only minister who does not represent a part of the Highlands.
Does Ivan McKee accept the severe criticism about the potential for a visitor levy, including from the Highland Hotels Association, which only this week warned that it is “exceptionally frightening” for a tourism tax to be introduced in the Highlands? Does he also accept that that will impact not only on tourists who visit the area, but on local residents who have to travel from rural areas for overnight stays and potential early-morning hospital appointments? They should not have to rely on clawing that money back—they should be exempt from the very beginning.
First, the reason why Ms Forbes did not answer the question is that she has a constituency interest—I think that Douglas Ross will understand that situation. Also, I am the minister responsible for the visitor levy.
I am well aware of the concern that has been raised in the Highlands, in particular, and elsewhere. Indeed, I have had a series of meetings with the Scottish Tourism Alliance, the Association of Scotland’s Self-Caterers and others with regard to the issues that the levy can raise for small businesses in particular.
As the member is aware, the responsibility for implementing a levy lies with each local authority, and there is a range of provisions in the act to allow the local authority to design a system that is able to cater to the needs of local businesses. I am keen to continue to engage with members, local authorities and industry representatives as we seek to take the legislation forward, and as councils seek to implement it in their local areas.
All four ministers know that I have opposed the tax from the outset, and that I voted against it. It is a percentage tax on which additional VAT will be payable—in other words, it is two sets of tax.
The minister knows that I have argued that the tax is uncollectible and that it will lead to a fiasco, that nobody has worked out how to collect it and that the information technology systems that will be necessary to administer it do not exist. Does he agree that it might be the death knell of many hard-working and excellent bed-and-breakfast establishments in the Highlands and throughout the country? He has been told that again and again. Will he call a halt to this outrageous and poorly designed tax?
The member will be aware that it is up to local authorities to choose whether to implement the tax. Highland Council proceeded with a consultation, and it is now reflecting on the response.
As I have said, I will meet Highland Council representatives shortly to discuss where the council is in that regard and the options that are available to it. The tax is set out in legislation, as the member is aware, and the City of Edinburgh Council is the first council that intends to implement it; it will do so next year. As I have said, we will continue to engage with other councils, as we learn from that implementation, to understand what their plans are in their local areas.
Visitor levies are very common in many parts of the world, including 21 European countries, and they bring benefits to visitors and residents alike, especially in high-traffic tourist destinations. Will the minister say more about how the decision to empower local government could benefit communities and businesses across Scotland?
The 2024 act gives local government the most significant new powers in that regard since devolution. It has provided businesses with the opportunity to work with their local council in order to generate funds for enhancing facilities that are frequently used by visitors and residents alike.
Funds can also be used to promote culture and heritage events, extend the tourist season and drive more business and economic activity. Many businesses and organisations recognise the value that the levy can bring, and it will help sustain and enhance the visitor experience by making destinations more attractive and competitive.
National Strategy for Economic Transformation (West Scotland Economy)
To ask the Scottish Government whether it will provide an update on what impact the national strategy for economic transformation is having on the economy of the West Scotland region. (S6O-04678)
Our national strategy for economic transformation outlines our vision for economic growth, and includes a programme to make Scotland’s regions and communities more productive, innovative and prosperous. Reports on progress are made annually.
We have committed to providing £628 million of funding to the three regional growth deals across the west of Scotland, and we are enabling the region’s economic partnerships to create jobs and help make the area an attractive place to live and work. That includes committing £2 million in 2025-26 to meet the Glasgow city region’s skills needs in the maritime and engineering skills sectors.
North Ayrshire has the lowest job density in Scotland. Does the minister believe that the Scottish Government is doing enough to prioritise North Ayrshire, given those poor job density levels? What more can be done to encourage investment and well-paid jobs in the area?
We want to support measures that will help create jobs and prosperity in the area; indeed, we will all have that as a priority. With regard to the Ayrshire growth deal, the specific North Ayrshire capital projects include the £9.5 million marine tourism programme, which will deliver step-ashore facilities for Arran and Cumbrae, and the £9 million greater harbour project, which will reinvigorate Irvine’s maritime mile. We must always look for more examples, and the member raises an important issue in that respect.
We have the strategy, and the programme for government contains a number of measures, too. I hope that we can make good progress on helping the people in North Ayrshire.
Question 8 has been withdrawn.
Finance and Local Government
Question 1 was not lodged.
Employer National Insurance Contributions Increase (Local Government Finances)
To ask the Scottish Government what engagement it has had with the United Kingdom Government regarding the impact of the increase to employer national insurance contributions on local government finances. (S6O-04681)
I am grateful to the Convention of Scottish Local Authorities and individual local authorities for their support in urging the United Kingdom Government to fully fund the tax increase. We are deeply disappointed that the UK Government has failed to recognise that the Scottish Government has prioritised investment in our public services and public sector workers. We are now, in effect, being punished for those decisions, but we have provided an additional £144 million of funding, and we will continue to work in partnership with local government to mitigate the impact of the UK Government’s decision on front-line services.
The City of Edinburgh Council will see a £19 million increase in employer national insurance contributions because of the Labour Government’s decision to increase that jobs tax. Does the cabinet secretary agree that the Labour Government must act urgently and agree to fully fund the public purse for those additional costs, and will she join me in calling on Scottish Labour MSPs to stand up for Scotland and put pressure on their Westminster Labour colleagues to reverse that ill-thought-through decision that is impacting on the delivery of public services?
On matters for which the cabinet secretary has responsibility.
I agree with that. We have consistently made it clear that the UK Government must fully fund the additional costs. However, it has confirmed that it intends to provide only a Barnett share, which would fail to reflect Scotland’s larger public sector per person than the rest of the UK. It has confirmed that we will receive £339 million for the additional costs of increased employer national insurance, which is, of course, far short of the more than £700 million bill that we estimate public services will face.
We face the challenge of having to divert money from front-line services to cover those additional costs, which is an outcome that I am sure no one in this Parliament wants.
The finance secretary reverts to type and blames Westminster. Despite the negative consequences of the national insurance increase, the financial crisis that councils face is nothing new. It stems from years of sustained underfunding from this Scottish National Party Government.
Councils across Scotland face budget shortfalls amounting to well over half a billion pounds, with 10 per cent council tax increases the norm and many councils raiding what is left of their reserves. Why does the cabinet secretary still blame others and continue to defend her Government’s record when we all know that the cash crisis that councils face is down to the SNP Government?
In relation to the substantive question, cabinet secretary.
The responsibility for the hike in employer national insurance contributions is Westminster’s. The decision was made by the UK Government—that is a fact. It is not about trying to shift blame—it is a statement of fact that, in his next breath, Craig Hoy criticises the hike in employers’ national insurance contributions.
With regard to council funding, the £1 billion unfunded tax cuts that Craig Hoy wants would impact negatively on that. Yet again, the Tories come to the chamber demanding more money for local government, and then they oppose measures such as the visitor levy, which will help local authorities to raise much-needed revenue—[Interruption.]
Let us hear the cabinet secretary.
There is no consistency whatsoever from those on the Tory benches, but we should not be surprised by that.
Additional Support for Learning Provision (Midlothian and East Lothian Council Budgets)
To ask the Scottish Government, regarding its decisions on local authority budget allocations, what discussions it has had with Midlothian and East Lothian councils regarding any impact on their budgets as a result of providing support in schools for additional support needs. (S6O-04682)
The Scottish Government continues to meet regularly with the Convention of Scottish Local Authorities and individual local authorities to cover a range of topics, including current and future budget pressures.
The 2025-26 budget provides an additional £29 million of funding for local and national programmes to support the recruitment and retention of the additional support needs workforce.
Given the rise in ASN demand across the country, has the Scottish Government considered any changes to the local authority funding formula to better reflect and support local authorities with that rise?
The local government needs-based formula that is used to distribute the funding that is available for local government uses the most up-to-date data available to ensure that changes in circumstances are accurately reflected as quickly as possible. The formula is kept under constant review through the settlement and distribution group.
Of course, the Scottish Government is always open to suggestions to improve the funding formula, but proposals must come through COSLA in the first instance.
I have spoken to many concerned parents and teachers who have said that after-school care for children with additional support needs is almost impossible to find, adding an extra layer of stress to the lives of parents and children.
After-school care providers have neither the capacity nor the budget to fund the specialist staff who are required to look after children with additional needs. We cannot ignore the needs of those children. Councils need to be properly funded. Will the cabinet secretary wake up to reality, look those parents in the eye and tell them why the Government is failing future generations?
I will say a couple of things to Pam Gosal. First, we recognise the important services that local authorities provide, which is why they have received record funding of more than £15 billion—something that is put at risk by Pam Gosal’s support for £1 billion of unfunded tax cuts, which would affect local government funding—[Interruption.]
The Tories do not like to hear the facts, but I will not stop repeating them, because facts matter—[Interruption.]
Let us hear the cabinet secretary.
Pam Gosal’s point about after-school care is important, and that is why we have provided an additional £29 million of funding on top of the existing funding for special needs provision that local government has. How each local authority decides to spend that money is down to councils themselves, and if they want to prioritise after-school care for children with special needs, they can do that.
Energy Infrastructure (Cost of Planning Applications and Appeals)
To ask the Scottish Government what it estimates the cost to local authorities has been since May 2021 of dealing with planning applications and appeals relating to new energy infrastructure, such as wind farms, pylons and battery storage facilities. (S6O-04683)
The Scottish Government does not hold that specific information, but I fully recognise the financial and capacity pressures on the system. That is why I raised planning fees last December, with further increases coming into effect next month.
When applications for energy developments are made to the Scottish Government under the Electricity Act 1989, planning authorities receive half the fee to cover the cost of their input. In addition, the national planning hub offers support to authorities, including capacity and access to expertise, to help them to determine applications for renewable energy and housing projects.
I am surprised that the minister does not have a figure for that. We know that too many of our councils are struggling under the weight of planning applications for energy infrastructure, and it is becoming an increasing drain on their resources. It is also a massive challenge for those local residents and communities who face having those developments right on their doorstep.
On Saturday afternoon, I met residents who will be impacted by the proposed Scottish and Southern Electricity Networks substation at Fanellan. Some are already looking to move away, but they are being told that interest in their homes will be impacted by the development. Others want to stay and fight the development, but they feel that they do not have the resources or expertise to do so. Does the Scottish Government provide any support for local communities to access legal and regulatory advice, or does it expect local people to foot the bill to protect their homes and their local communities?
The member will appreciate that I cannot engage in discussion about any specifics, including the case that he has raised. Every Conservative member who has spoken this afternoon has called for more resources for local government or tax cuts and, in some cases, for both. [Interruption.] I can get back to the member with the detail that is available on his question.
Inverclyde Council (Funding)
To ask the Scottish Government how much additional funding Inverclyde Council has received since 2016, over and above its annual funding allocations. (S6O-04684)
Funding such as that awarded in city and region deals is often allocated to regions and therefore not attributable to individual local authorities, even where all local partners benefit directly from the investment. In 2025-26 alone, almost £867 million of funding will be provided to local government over and above the record funding settlement. Inverclyde Council will receive a share of that funding. In recent years, it has benefited from funding to expand the quayside and build a new visitor centre to further expand the Greenock ocean terminal, alongside investment in the learning estate, such as the development at Kilmacolm primary school and St Patrick’s primary school.
The cabinet secretary’s reply certainly demonstrates that the Scottish Government has provided additional funding to Inverclyde Council over and above the budget settlement, which I warmly welcome. The Inverclyde socioeconomic task force, which I co-chair, has presented a range of projects to the Scottish Government, which have the potential to benefit the community. Will the cabinet secretary give an assurance that those projects are being considered, notwithstanding the financial challenges that the Scottish Government is facing?
I recognise the importance of the task force’s work. As Stuart McMillan will be aware, the Minister for Employment and Investment has participated in meetings of the task force. The Scottish Government is aware of the project funding requests that have been made by the task force and will consider any proposal that has the potential to drive growth and create high-quality employment opportunities.
Income Tax Policy (Impact on Median Income)
To ask the Scottish Government what its position is on the impact of its Scottish income tax policy on the median income in Scotland, in light of this being estimated to be £29,750 in 2025-26, based on its current policy. (S6O-04685)
Anyone in Scotland who has an income of less than £30,000 will pay less income tax than they would if they lived elsewhere in the United Kingdom. That accounts for more than half of Scottish income tax payers.
The median salary in Scotland is projected to be £29,750, which is well below the UK figure of £37,480. That is a significant gap. However, Scottish workers face higher taxes if they try to earn more. The cabinet secretary needs to learn that low pay is not a virtue and that taxing aspiration is no route to growth. Does the cabinet secretary accept that Scotland’s income tax policy unfairly burdens working people, discourages ambition and undermines our competitiveness by making it harder for individuals and families to get ahead?
It is refreshing to hear a Tory say that he does not support low pay, given that Stephen Kerr’s Tory Government at Westminster based its whole economic strategy on low pay, which, of course, this Government has addressed—
Rubbish!
Let us hear the cabinet secretary.
We have addressed that with our support for the real living wage, which has driven up wages in Scotland. It is also important to consider the package of support that we are providing in the round. Households that are in the lower half of the income distribution are, on average, around £450 per year better off than they would be under the UK’s tax and social security policies.
By having lower pay.
Perhaps Stephen Kerr should occasionally listen to the answers—he may even learn something.
But it is nonsense.
Mr Kerr, I ask that, when you have put your question, you listen with courtesy.
It was wrong!
Mr Kerr!
National Resource Allocation Formula
To ask the Scottish Government, in relation to the setting of budget allocations, what discussions the finance secretary has had with national health service boards regarding the national resource allocation formula. (S6O-04686)
The NRAC formula is an objective measure of the need for healthcare services across Scotland. The formula, which is updated annually, provides target shares for regional national health service boards and has been in use since 2009-10. The Cabinet Secretary for Finance and Local Government has not had any specific conversations with NHS boards regarding the formula. The approach that has been taken by the Scottish Government has been to move boards towards parity gradually over a number of years. Since 2012-13, more than £4 billion of additional funding has been committed to those NHS boards that are below their NRAC parity levels.
In recent years, MSPs and MPs from all parties have heard from NHS Lothian that, with the poor financial allocation, it is consistently seeing under-level performance with regard to the national resource allocation formula. That situation means that our health board here, in Lothian, is consistently losing out, with the result that it is now the lowest-funded health board per head of population in Scotland.
What actions is the Scottish Government taking specifically on NHS Lothian, given that the area is experiencing the highest level of population growth anywhere in the country? Will the cabinet secretary and the minister agree to meet a cross-party group of MSPs and representatives of NHS Lothian to discuss the board’s concerning financial sustainability issues and the fact that we need a population-based funding model if we are going to deliver the services that Lothian will need in the future?
The NRAC formula, which is updated regularly, takes into account population growth and a range of other factors in its calculation. With regard to NHS Lothian, we have seen the board’s funding move closer and closer to parity in each of the years since the matter came under consideration by the Government. Indeed, NHS Lothian has seen additional parity adjustments of almost £130 million in the past 10 years or so.
As I said, the formula is in place and the Government’s policy is that we move boards towards parity over time. That is what is happening with NHS Lothian, as it is with other NHS territorial boards.
NHS Fife had a £55 million overspend in the past financial year after attempts to bring the budget under control failed. Why does the Scottish Government boast repeatedly about being able to balance its budgets when it has direct control over NHS boards and is repeatedly unable to do so in that regard?
Obviously, NHS boards are responsible for managing their own funds, and I have already indicated the basis on which the funding is allocated to them. The member should recognise that the NHS in Scotland is receiving record funding from the Scottish Government as a consequence of the priority that we give to funding our health and social care services.
I have already indicated that the Scottish Government balances its budget in the round, and the funding that we give to NHS boards through the NRAC formula is at record levels.
Highlands and Islands Enterprise estimates that, over the next decade or so, 18,000 additional jobs, mostly in the renewables sector, will be created in the region, which will add around 40,000 more people to its existing population. Will the finance secretary give that fair consideration in relation to the NRAC formula, given that NHS services in the Highlands are bursting at the seams as it is?
I have already indicated that the NRAC formula will take into account population shifts over time, along with a range of other factors, including, in the case of NHS Highland, the rural nature of the area that it covers. The member can rest assured that that shift in population will be factored in to NHS funding and the NRAC formula.
Argyll and Bute Health and Social Care Partnership (Funding)
To ask the Scottish Government whether it plans to allocate additional funding to Argyll and Bute Council, in light of reports of Argyll and Bute health and social care partnership’s funding deficit. (S6O-04687)
We, of course, appreciate the pressures that health and social care face, which is why we provided record funding for health boards and local government in 2025-26. I understand that the chief officer and chief finance officer of Argyll and Bute’s integration joint board are preparing a recovery plan, which will be presented to the IJB at the end of May, and I welcome the fact that the council is actively discussing all available options to support the partnership and ensure the continued delivery of critical services.
The Scottish Government will continue to work with all partners to ensure that the people of Scotland continue to receive the high-quality public services that they expect and deserve.
The cabinet secretary will be aware that Argyll and Bute Council still has to find £4.2 million to fill the gap in health services, while £500,000-worth of social work savings must also be found.
Islanders face challenges in accessing health and social care services. Research has shown that there is a worrying prevalence of certain health conditions in rural Scotland. Those include Huntington’s disease, of which the north of Scotland has one of the highest rates in the world—five times the global average—yet there is no specialist service in the Highlands for that condition.
What discussions has the cabinet secretary had with her Cabinet colleagues about the forthcoming islands plan and whether it can be used to allocate additional funding to support island health and social care services?
I am happy to write to Rhoda Grant with a bit more detail. She makes an important point about the role of the islands plan, which has helped to lever in additional funding to some of our island communities.
We continue to look at the issues that she highlights, particularly those that are specific to more remote and rural communities, and we try to reflect that rurality through some of the formulas for allocating funding through health and local government to our health and social care partnerships.
To address some of the pressures that the sector faces more generally, we are taking forward the new social care financial viability response group, which has met weekly since February. It comprises Government and sector representatives, to make sure that we are working together to ensure the sustainability of services.
I will write to Rhoda Grant with more detail specifically on the islands plan point.
That concludes portfolio question time.