Autumn Budget Revision 2024-25: supporting document

Introduction

1. This booklet provides information for the Parliament and others in support of the ‘Budget (Scotland) Act 2024 Amendment Regulations 2024’ – the Autumn Budget Revision. The Order is a Scottish Statutory Instrument laid before the Scottish Parliament by the Scottish Government in October 2024. The booklet itself has no statutory force – it is produced as an aid to understanding the Order.

2. The purpose of the Autumn Budget Revision is to amend the Budget (Scotland) Act 2024, which authorises the Scottish Government’s spending plans for the financial year 2024-25.

3. The main changes to the Scottish Government’s spending plans, as set out in the supporting document to the Budget Bill, are explained below:

i) Funding changes to reflect deployment of available resources to portfolios (total net increase to the budget of £1,066.2 million);

ii) technical adjustments (net increase to the budget of £42.2 million);

iii) Whitehall Transfers and HM Treasury allocations to the Scottish Government (an increase of £18.1 million); and

iv) the transfer of resources between Scottish Government portfolios (net nil).

4. In total these changes will increase the Scottish Government budget by £1,126.6 million from £59,322.5 million to £60,449.0 million.

5. The purpose of the Autumn Budget Revision is to seek Parliamentary approval for these changes.

Restructuring of Portfolios

6. Following his appointment on 7 May 2024 the First Minister announced a restructured Cabinet with a number of changes to portfolio responsibilities. Table A provides a reconciliation between the previous portfolio budgets, as outlined in table D.02 of the 2024-25 Scottish Budget, and the new portfolio structure.

7. Most portfolios were either not impacted by the reshuffle or the changes were relatively modest. There were fundamental changes to other portfolios with an additional Cabinet role created and the responsibilities for the Wellbeing Economy, Fair Work and Energy and Deputy First Minister and Finance portfolios now split across three portfolio.

* opening budgets have been amended to remove a small number of NDPB non-cash items which should be excluded from the SG presentation.

Funding Changes

8. Following the completion of the 2024-25 Scottish Budget additional funding has become available. This funding has come from a number of sources. These include:

• £293 million of underspends, as set out in the 2023-24 Provisional Outturn have been carried forward in the Scotland Reserve to be utilised in 2024-25.
• Additional Barnett consequentials were confirmed at the UK Spring Statement (£293 million) and UK Main Estimates exercise (£436 million)
• Funding from Scotwind and in-year savings, with further details set out below.

9. On the 3rd of September the Cabinet Secretary for Finance and Local Government gave a Fiscal Update Statement to the Scottish Parliament where she set out the challenging financial position and the choices that have been made to ensure a balanced budget can be achieved in 2024/25.

10. As part of the statement £188.4 million of in-year savings were set out. Where these savings have been finalised they are reflected in the funding changes outlined as part of the Autumn Budget Revision. The remaining savings will be included within the Spring Budget Revision. 11. In addition £224 million of unallocated ScotWind revenues have been deployed here. This means that £424 million is currently set against the budget, with £236 million held to be utilised in-year as required. As set out in the fiscal update, work is on-going to minimise usage of Scotwind as far as possible. £54 million of INTOG income is anticipated to be realised in 2024-25 but there remains some uncertainty on the exact timing of this income crystallising.

12. The largest element of funding deployed in the budget revision is being provided to Health and Social Care portfolio - £1,058 million of additional resource. £864 million is to support Health services. The remaining £194 million of funding is a direct allocation of Barnett consequentials provided for additional costs of enhanced employer pension contributions.

13. Local Government will receive an additional £155.9 million in funding as part of the Autumn Budget Revision. This £86.2 million of consequential funding for additional costs of enhanced employer pension contributions for Teachers, £62.7 million of funding to councils freezing council tax and the £4 million Island Cost of Living Fund both of which the Cabinet Secretary confirmed to CoSLA and council leaders on the 15^th of April. A further £3 million is being provided to support the council tax freeze following engagement with CoSLA (on top of the £147 million provided at Budget Bill).

14. £35 million has been provided to the Justice and Home affairs portfolio to fund additional costs of Police and Fire Pensions. This primarily relates to the impact of the costs of enhanced employer pension contribution rates. Scottish Courts and Tribunals Service are receiving £4 million of funding for the same purpose.

15. £20.2 million of capital funding is being provided to Ferguson Marine within the Deputy First Minister Economy and Gaelic portfolio to fund additional costs of the building of vessels 801 and 802. This additional budget requirement is included within the costings which were outlined in the letter sent to the NZET committee on 26 February 2024.

16. Funding for the Social Justice portfolio is being reduced by £160 million. £148 million of this reduction reflects the estimated change to Scottish Government funding following the UK Government’s own decision to limit eligibility for Winter Fuel Payment and the Scottish Government decision to replicate this for Pension Age Winter Heating Payments (PAWHP).

17. Ordinarily Social Security benefit expenditure budgets are not adjusted at the Autumn Budget Revision but is done so here given the fundamental change to eligibility for the benefit. The remaining budget is an interim figure pending receipt of the Scottish Fiscal Commission forecast for PAWFP using the new qualification criteria. Funding will be updated at the Spring Budget Revision to reflect the new forecast.

18. The balance of £12 million relates to Social Security programme savings outlined in the Fiscal Statement for reduced costs of workforce and delivery of the PAWHP.

19. Within the Transport portfolio, £26.5 million of Financial Transaction income from the Low Carbon Transport Scheme is included as a saving. Savings as a result of not making permanent the peak fares pilot or progressing the concessionary fares extension to asylum seekers pilot are not included within the budget revision as funding would require to be provided to the portfolio or additional savings taken forward to continue with the schemes.

20. Within the Net Zero and Energy portfolio £19.6 million of savings outlined in the fiscal statement have been included, the largest of which is the £16 million of additional income in respect of Scottish Water Interest on Voted Loan that was highlighted. The additional £3.6 million relates to reduced forecast on the Zero Waste programme, £1 million of savings from Nature Restoration and £0.1 million relating to Air Quality.

21. Within the Education budget £6.9 million of savings have been included. The largest of which is the £6 million forecast reduction in expected demand for Higher Education Student Support.

22. While significant savings within the Health and Social Care portfolio were set out in the fiscal statement these amounts are not reflected as a reduction in the portfolio budget. Rather these savings are being repurposed with the portfolio to meet expected pressures.

In addition, any further forecast reductions as a result of emergency spend controls across Government which impact the budget will be set out as part of the Spring Budget Revision.