Chamber and committees

The Scottish Government has taken a progressive approach to the overall arrangements for Land and Buildings Transaction Tax, prioritising support for first-time buyers and home movers while raising vital revenue to support public services.

The Scottish Fiscal Commission has forecast that increasing the rate of the Additional Dwelling Supplement will raise an additional £32m in 2025-26. The Scottish Fiscal Commission assume that half of those Additional Dwelling Supplement transactions which do not proceed will be replaced by first-time buyer and home mover transactions in 2025-26 and that this will increase to three-quarters from 2026-27 onwards.

The priorities set out in the Tax Strategy will enable us to deliver tax policy which considers the whole tax system, informed by a programme of evidence, evaluation and engagement.

Local Authorities are democratically accountable to their local communities for the service outcomes they deliver. As independent corporate bodies, local authorities are responsible for managing their own budgets and allocating the total financial resources available to them on the basis of local needs and priorities in line with their statutory obligations and a small number of jointly agreed national priorities.

The Local Government Benchmarking Framework (LGBF) is a high-level benchmarking tool designed to support senior management teams and elected members to ask questions about key council services. The LGBF, which is run by the Improvement Service on behalf of the Society of Local Authority Chief Executives and Senior Managers (SOLACE) (Scotland), helps councils compare their performance against a suite of efficiency, output and outcome indicators that cover all areas of local government activity.

All new policy commitments or changes to existing policy, that have a financial impact on local government, must be approved through the formal financial governance process which requires agreed recommendations from the joint Scottish Government and COSLA Officers’ Settlement and Distribution Group and political agreement from Scottish Ministers and COSLA political Leaders.

The Scottish Government also publish the Scottish Local Government Financial Statistics (SLGFS) annually that provides a comprehensive overview of financial activity of Scottish local authorities based on authorities audited accounts.

VAT is a reserved power of the UK Government. Under the Barnett formula the Scottish Government is not entitled to a proportion of revenues raised by the UK Government under reserved powers. Changes to the Block Grant are calculated by reference to UK Government spend in devolved areas.

The UK Government had initially indicated that funding raised from the removal of the VAT exemption on independent schools would be ring-fenced and applied to the budget for the Department of Education in England to increase teacher numbers in England.

Under this arrangement the Scottish Government would effectively have received a population share of the total funding raised under the Barnett formula.

Following discussions with HM Treasury we have now been advised that there is no ring-fencing being applied to this funding stream by the UK Government. While additional funding was applied to the Department for Education as part of the UK Government’s Autumn Budget, on which Barnett consequentials were received, we cannot confirm the extent to which this has been funded by the removal of VAT on independent schools.

I refer the member to the answer to question S6W-34982 on 26 February 2025. All answers to written Parliamentary Questions are available on the Parliament's website, the search facility for which can be found at https://www.parliament.scot/chamber-and-committees/written-questions-and-answers

Shona Robison: The Scottish Government respects the independence of Local Government and has no formal role in pay negotiations for non-teaching staff; these negotiations are undertaken through the Scottish Joint Council (SJC) which is a bilateral body formed of COSLA and recognised trade unions. The Scottish Government is a constituent member of the Scottish Negotiating Committee for Teachers (SNCT) which is a tripartite body alongside COSLA and recognised trade unions representing teachers.

The Scottish Government Public Sector Pay Policy for 2025-26 was published in December 2024 and sets out decisions taken by Scottish Ministers regarding pay for most public sector staff in Scotland. This policy is clear that, for Local Government employees, pay and other employment matters are delegated to local authorities. As such, the policy does not apply directly to Local Government and local authorities have flexibility to manage their own budgets and workforce accordingly. Like all employers, Local Government decisions on pay likely consider a range of factors including other public sector pay offers in Scotland and across the UK.

Scottish Ministers have been consistent in their recognition of the valuable contribution that Local Government workers make to delivering essential public services across the country and have worked constructively with Local Government to support a fair and sustainable pay position, including through providing additional funding where necessary. For example, the Scottish Government provided an additional £77.5 million for Local Government pay in 2024-25 and this has been baselined into the 2025-26 Local Government settlement. Similarly, the Scottish Government provided an additional £29 million to Local Government in 2024-25 to support the pay deal for teachers, with the full year cost of £43 million baselined.

Further, the Scottish Government supports local authorities to manage wider pay-related issues relating to delivery of shared priorities across both national and local spheres of government. For example, the draft 2025-26 Scottish Budget includes an additional £9.7 million for local authorities to deliver the Programme for Government commitment to increase the pay of Early Learning and Childcare workers in the private and third sectors delivering funded hours. Building on recurring investment of £16 million in 2024-25, this will ensure that staff delivering funded early learning and childcare are paid at least the Real Living Wage and demonstrates our commitment to the Fair Work agenda.

Local authorities have statutory responsibility for education in their area. Officials have met with education leads within local authorities to understand the impact on the Scottish state sector to date. Scottish Government has received assurance from local authorities that they have the capacity to support increased school rolls.

Scottish Government continues to engage with local authorities and the independent school sector, including the Scottish Council of Independent Schools (SCIS), to understand the impacts of the UK Government policy since its implementation. The independent school sector has conducted its own assessment of financial impact, which is available here: Economic-Impact-of-SCIS-Member-Schools-in-Scotland-2022-23-8Feb24.pdf.

The Government's four priorities, eradicating child poverty, building prosperity, improving our public services, and protecting the planet, are aligned with the current National Outcomes in the National Performance Framework (NPF). The recent decision, in response to the Parliamentary inquiry, to reform the NPF aims to improve and further strengthen its role in policy, budget and decision making.

As part of the Scottish Government’s work with HMRC to develop the evidence base analysis on intra-UK migration has been published by HMRC, showing movements by tax band and age band. This is available at:

Intra-UK migration of individuals: movements in numbers and income - GOV.UK

Both the National Records of Scotland (NRS) and the Office for National Statistics (ONS) publish official statistics on migration between Scotland and the rest of the UK. However, these aim to measure total migration (where the HMRC analysis considers only the subset of people who were taxpayers before and after moving). As these figures are not concerned with taxpayers specifically they do not contain information about incomes or tax bands.

There are currently 36 operational Business Improvement Districts (BIDs) in Scotland. A full list can be found on the Scotland’s Improvement Districts (SIDs) website - Who they are - Scotland's Improvement Districts