Scottish Budget 2021 to 2022

Chapter 3 Pre-Budget Scrutiny by Parliamentary Committees

This chapter details how the Scottish Budget 2021-22 has been informed by pre-budget scrutiny from the Scottish Parliament's committees.

Culture, Tourism, Europe and External Affairs Committee

The Culture, Tourism, Europe and External Affairs Committee's pre-budget scrutiny focused on the impact of COVID-19 on the culture and tourism sectors. A number of evidence sessions were held, including with representatives across Scotland's venues and arts spaces, to discuss strategic long-term funding for the culture sector.

The committee requested that the culture budget be focused on responding to the pandemic while seeking to build a sustainable industry which meets the longer-term aspirations of the culture strategy. There was a particular request that consideration is given to ensuring organisations and individuals are supported with recovery from the pandemic and that there is continued investment in skills. To help address this, the Scottish Government is maintaining levels of funding to key priority areas in the culture budget, such as Screen Scotland and Youth Music Initiative, both of which provide opportunities for freelancers, which the committee noted played a vital role within the creative industries. Continued funding for Creative Communities will enable community organisations to provide local access to culture to groups across Scotland, as we move out of the pandemic.

Economy, Energy and Fair Work Committee

The Economy, Energy and Fair Work Committee's 2021-22 pre-budget scrutiny covered the impact of COVID-19 on businesses, workers and the economy. The Committee also welcomed the alignment across local economic development agencies in response to the crisis but noted there is still work to be done on longer-term strategic alignment.

There was a focus on economic recovery and the government's response to the Advisory Group on Economic Recovery (AGER) report and performance and outcomes linked to the National Performance Framework. The Committee raised a number of concerns covering the impact of COVID-19 on the labour market including on young people, women, graduates and apprenticeships. The Scottish Government shares these concerns and has provided an additional £125 million support for the Young Person's Guarantee, Employability and Skills provision. This funding will help deliver the Young Person's Guarantee and continue investment in wider training and skills opportunities, like the National Transition Training Fund and the Flexible Workforce Development Fund. The funding recognises the increasing challenges we are likely to see in the Labour Market this year, whilst also contributing to our national mission for new green and good jobs, alongside our Fair Work and equality commitments.

The Committee noted that the launch of the Scottish National Investment Bank (SNIB) would support the economic recovery of Scotland and agreed it should maintain its long-term focus. The Committee also considered the level of flexibility of the enterprise agencies' budgets, their ability to respond to unforeseen circumstances and how the annuality of their budgets can be challenging, particularly in relation to capital commitments. The Scottish Government recognises the difficulties an annual budget presents and to address these issues and to provide further confidence and stability to capital planning we are publishing our five-year Capital Spending Review and, following consultation, a strategic five-year Infrastructure Investment Plan in February 2021.

Education and Skills Committee

Pre-budget scrutiny from the Education and Skills Committee highlighted the important role that our colleges and universities will play in Scotland's economic recovery and focused on funding for those sectors. The Scottish Government recognises the impact the pandemic has had on learners in Scotland's schools and those continuing their learning into our colleges and universities.

Colleges and universities are key to Scotland's economic recovery, including through upskilling and reskilling and in ensuring our young peoples' future is not damaged by the pandemic. They are also central to the delivery of our commitment to support young people as part of our Young Persons' Guarantee. We are therefore increasing funding available to colleges and universities to fund additional places, ensuring that no learner is disadvantaged by COVID-19 impacts on the 2020 exam diet; to support the delivery of our foundation and graduate apprenticeship programmes and wider skills qualifications; and to support college sustainability by increasing funding towards college pay and pension obligations. In addition we recognise the pandemic has impacted not only student learning but also, for many, their finances. This budget will therefore increase the support available to students.

Environment, Climate Change and Land Reform Committee

The Environment, Climate Change and Land Reform Committee's pre-budget scrutiny focused on the alignment of spending plans to the delivery of strategic goals on green recovery, climate change and the ecological crisis. The report was published alongside its report on Green Recovery and the reports complement one another.

The Committee articulated that a green, just and resilient recovery requires substantial effort from all economic sectors and society, and clear Scottish Government leadership. The Committee recommended that the Scottish Government use the 2021-22 Budget to set such a pathway and through other multi-year spending plans ensure that capital is invested in a way that supports recovery and delivers green jobs. The Committee is keen to ensure the long-term carbon impact of spend is assessed and reported.

The Scottish Government is fully aligned to the Committee's ambition on this and through the Climate Change Plan update has set out a green recovery from COVID-19. Alongside the commitments set out in the Programme for Government, this will protect biodiversity, create good, green jobs and accelerate our just-transition to net-zero.

Equalities and Human Rights Committee

The Equalities and Human Rights Committee's pre-budget scrutiny reflected a wide cross-section of policy commitments, including interrogation of the budget-setting process; how equality and human rights considerations are taken into account when making budgetary decisions; and scrutiny of third sector funding. The Committee also looked at the range of support that was put in place to support community-led responses to the pandemic.

The Scottish Government welcomes the important points raised in the Committee's pre-budget scrutiny, in particular the recognition that equality and human rights considerations are central to policy and financial decisions across government, and the increased importance of these considerations throughout the COVID-19 pandemic.

In the Scottish Budget 2020-21 the Promoting Equality and Human Rights budget line increased to £30.2 million. This was a significant increase from the 2019-20 budgetary position, and has been increased by a further six per cent to £32.2 million for the 2021-22 budget, signalling the Scottish Government's commitment to this work. In this exceptionally challenging year the budget prioritised support for those most at risk from the pandemic, extending existing funding streams to provide clarity and consistency to our funded organisations and enable them to provide flexible support to communities. In 2021-22, we will deliver streamlined funding streams - Delivering Equally Safe and Embedding Equality and Human Rights - that will more closely align our funding with the National Performance Framework outcomes, in line with the Committee's recommendations, and will encourage and support partnership working to tackle some of the more entrenched issues of inequality across our society.

Finance and Constitution Committee

The Finance and Constitution Committee's pre-budget scrutiny report recognised the enormity of the economic and fiscal challenges facing the Scottish Government in preparing the Budget, and highlighted the need for transparency and collaborative working between the Parliament and government to meet these challenges. While welcoming the funding guarantee provided by the UK Government, the Committee also considered whether the current Fiscal Framework is appropriate, and whether it strikes the right balance between protection against UK-wide shocks and the ability of the Scottish Government to tailor its response and recovery interventions to Scottish priorities.

The Scottish Government welcomes the findings of the Committee's report, and agrees that it is essential that the Government and Parliament work together closely to tackle the unprecedented challenges that COVID-19 presents. We remain committed to transparency and working with Parliament to ensure it can undertake effective scrutiny of the public finances. The Scottish Government has been clear that in order to meet the ongoing challenges of COVID-19, as well as support economic recovery, it is critical that the UK Government provides additional fiscal flexibilities. We therefore welcome the Committee's recommendation that the UK Government should provide greater access to borrowing in emergency situations. Beyond this, the Scottish Government is advocating a suitably wide scope for the review of the Fiscal Framework so that it supports a fair funding outcome and delivers much greater fiscal flexibility for Scotland.

Health and Sport Committee

Pre-budget scrutiny from the Health and Sport Committee highlighted the importance of understanding and addressing the impact of COVID-19 on the health and care system, on those it serves and on how care is delivered.

This budget will prioritise our work in embedding a world-class public health system, with a focus on improving population health and tackling inequalities. In responding to COVID-19, we will continue our focus on the vaccination and Test and Protect programmes, and take forward our work on remobilisation, recovery and re-design. In recognising non-COVID harms, our Framework for NHS Mobilisation sets out how we will ensure a safe, phased reintroduction of elective care and manage the unscheduled care pathways in an optimal manner.

We will continue to drive long-term reform to support safe, effective and faster care at home or in the community by building on innovation achieved during the pandemic. We will also shortly be receiving the report from the Independent Review of Adult Social Care - Scottish Ministers will then consider the recommendations for improvements along with options to ensure that policy developments are appropriately funded.

We will revisit the performance and financial assumptions underpinning the Medium Term Health and Social Care Financial Framework, which considers the health and care system as a whole, along with our expectations of demand and future resourcing. This will set out the anticipated next steps in securing a sustainable and balanced health and care sector and supporting delivery of world-class, sustainable services.

Justice Committee

The pre-budget scrutiny from the Justice Committee and the Justice Sub-Committee on Policing focused on the impact of the COVID-19 pandemic across the justice system.

The Scottish Government welcomes this approach. The Justice Committee rightly recognises the significant work that has been undertaken across the justice system to adapt to the challenging circumstances that it continues to face - as reinforced by the Lord President's recent decision to reduce court business in line with public health advice. The Scottish Government continues to work closely with the Justice Board and Criminal Justice Board to support the recovery, renewal and transformation of the justice system.

As acknowledged by the Sub-Committee, Police Scotland has dealt with extraordinary circumstances this year and continues to have a key role in the response to the COVID-19 pandemic, working alongside partners in local authorities and health. The Scottish Government will continue to work closely with the Scottish Police Authority and Police Scotland to support the ongoing policing response to COVID-19, and to ensure a modern police service fit for the 21st century, through supporting transformation as outlined in the Joint Strategy for Policing.

Local Government and Communities Committee

The Local Government and Communities Committee's pre-budget scrutiny focused, on a range of predominantly COVID-19-related issues including: the resilience of local services as we head into winter; our position and approach to evictions; homelessness, rough sleeping and the use of temporary accommodation; as well as the affordable housing supply programme.

The Scottish Government continues to work closely with partners, including local government and COSLA, to assess and mitigate the harms caused by the COVID-19 pandemic, and has committed over £500 million of investment in social protections, including for the winter period.

During its scrutiny, the Committee raised a number of important points about how best to support tenants who are struggling to pay rent and how to ensure people experiencing homelessness are helped into permanent accommodation. The Committee will be aware that in 2020-21 the Scottish Government made a further £8 million available for discretionary housing payments and provided a £5 million boost to help local authorities accelerate their rapid rehousing transition plans.

Evidence given to the committee in September from the housing sector emphasised the importance of keeping up the momentum on building affordable homes. We have since made a forward commitment in the draft Infrastructure Investment Plan to the Affordable Housing Supply Programme, and ahead of the Scottish Budget the interim funding available for the Programme in 2021-22 was increased from £300 million to £500 million, providing greater funding certainty for local authorities, housing associations and the construction sector.

Having taken the decision to announce the Scottish Budget before the delayed UK Budget for the second year in a row, the Scottish Government has listened carefully to representations made by COSLA on behalf of local government about the damaging impact any further delay would have on vital local services. During these discussions COSLA made the case for a fair financial settlement for 2021-22 particularly in recognition of the contribution made by local authorities in dealing with the ongoing pandemic.

Again, due to the lack of future funding figures from the UK Government and unreasonable constraints to the timetable for producing Scottish Budget 2021-22, the Scottish Government has no option but to provide local government with a single-year settlement, a position COSLA understands and accepts. However, the Scottish Government remains committed to providing local government with long-term financial certainty and will continue to work on this with COSLA, and press the UK Government to carry out a multi-year spending review to ensure that long-term financial certainty can be provided to our partners in local government at the earliest possible opportunity.

Rural Economy and Connectivity Committee

The Rural Economy and Connectivity Committee's pre-budget scrutiny focused on a range of issues including: the impact of COVID-19 and EU Exit on the rural economy and the critical role businesses have in both a blue and green recovery from the pandemic; financial support for transport operators during the pandemic; and the use of future budgets to lock in the shift towards active travel.

Funding for farmers, crofters and land managers is critical in ensuring that producers are able to remain viable. The Scottish Government has established industry-led groups to help us develop and define practical measures to change farming and food production for the better. The outputs from the groups will support action on climate change, contribute towards biodiversity targets and build resilience.

The Committee welcomed the commitment to develop a Blue Economy Action Plan, noting that annual funding will be required now that Scotland and the rest of the UK no longer have access to the European Maritime Fisheries Fund.

We recognise the ongoing uncertainty around the impacts of the pandemic and how long they will persist. Funding will support rural areas, businesses and the creation of new green, fair jobs as part of longer-term recovery plans across Scotland's hardest hit sectors.

COVID-19 continues to have a significant impact on the demand for public transport. The budget reflects initial continuing support for public transport modes and this will be reviewed as we transition from responding to the pandemic and see the benefit of the vaccine roll-out. This support is needed to ensure that public transport remains in place during the pandemic for those who need it, consistent with relevant restrictions and to retain a viable public transport system. This is crucial to the post-pandemic recovery, delivery of the national transport strategy and the achievement of climate change targets.

Transport Scotland identified significant uncertainty in future transport demand, which has now intensified due to COVID-19 and a range of factors such as the extent of continued home working, future public attitudes to public transport use and the viability of commercial operators.

This budget builds on the shifts towards active travel and supports the associated long-term Programme for Government commitment, with over £100 million designated for active travel in 2021-22 alongside continued investment in the Bus Priority Fund. The budget also provides for continued investment in low carbon transport programmes and initiatives to support a green recovery with significant transport measures within the Climate Change Plan update (CCPu).

The Scottish Government welcomes the Committee's input on these issues and will keep the committee and Parliament informed on developments.

Social Security Committee

The Social Security Committee commented on a range of issues in its pre-budget scrutiny report including the Scottish Child Payment (SCP), reserved benefits, the Scottish Welfare Fund and benefit take-up strategy.

The SCP has been described as a game-changing intervention in tackling child poverty. It opened for applications on 9 November 2020, with the benefit starting on 15 February 2021, and the Scottish Parliament has agreed a duty to uprate annually from April 2022. The Scottish Government's ambition remains to roll out SCP to under-16s by the end of 2022; however there is a critical dependency on the UK Department of Work and Pensions (DWP) to provide the data needed for 6-16 year olds in order to make top-up payments. We cannot proceed without it.

The Scottish Government has continued to call for the retention of the £20 uplift to Universal Credit and Working Tax Credits, and to extend this to legacy benefits, as well as fixing the other well-known issues with Universal Credit such as the five week wait for first payment, two child limit and benefit cap.

We remain absolutely committed to maximising the take-up of Scottish benefits, which is both a legal and moral duty. We will continue to lead calls for DWP to adopt a more considered and collaborative approach to maximising benefit take-up across the reserved and devolved benefits systems.

The Scottish Government will continue to work closely with local authorities and COSLA to ensure we understand how the Scottish Welfare Fund is meeting the needs of people across Scotland. We will also ensure that awareness of the Fund is considered as part of a wider income maximisation and financial support campaign in the coming months.

Further Pre-Budget Scrutiny Responses

In addition to the content above, following the publication of the Scottish Budget, each Cabinet Secretary or relevant Minister will provide a written response to each individual committee on their pre-budget scrutiny reports. These will be provided within five parliamentary sitting days of the publication of this budget.