Call for Clarity on the impact of the Block Grant Adjustment on the Scottish Budget

12.01.2015

The UK and Scottish Governments have been urged to reach agreement on the size of the Scottish block grant in a report issued today by Holyrood's Finance Committee. This comes ahead of the introduction of the Land and Buildings Transactions Tax and Scottish Landfill Tax in April.

In its report on the Scottish Government’s budget proposals for 2015-16, the Finance Committee has stated it is “unacceptable that the Parliament is being asked to consider the Draft Budget without knowing what impact the block grant adjustment may have on the Government’s spending proposals.”  

The Committee also emphasises the need for greater transparency from both governments about future block grant adjustments arising from the devolution of further fiscal powers.

Committee Convener, Kenneth Gibson MSP said: 

“The Parliament’s committees have carried out detailed scrutiny of the Scottish Government’s budget, but it is of concern that, with two new taxes coming into existence in April, we still don’t know how these taxes will impact on the block grant.  

“The situation is particularly imperative as we ready ourselves for the devolution of additional tax powers following on from the Smith Report. I urge the UK and Scottish Governments to resolve the outstanding issue of the block grant settlement as a matter of urgency. 

“Any adjustment to the block grant certainly needs to be finalised before the Parliament votes on the budget in February.” 

Other matters addressed in the Committee’s report are— 

  • The proposed rates and bands for both Land and Buildings Transaction Tax and Scottish Landfill Tax
  • The readiness of Revenue Scotland to start collecting taxes from 1 April 2015
  • Delivery of a “decisive shift” to prevention, which the Committee supports but notes that “there is little evidence of the essential shift in resources taking place to support a preventative approach.” 

 

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