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Swinney details council tax deal Swinney details council tax deal
(about 6 hours later)
Scotland's Finance Secretary John Swinney has given details of a working deal with local government body Cosla over a council tax freeze. A deal for a council tax freeze next year has been struck with councils, the SNP government has confirmed.
He said the "historic agreement" would mean that councils could freeze the levy for the next three years. The announcement from Finance Secretary John Swinney came as he delivered the Nationalists' first budget and three-year spending plans.
In his address to the Holyrood parliament, Mr Swinney admitted he was unable to deliver all SNP pledges. Efficiency saving targets will also be raised, amid the "tightest financial settlement since devolution".
Labour's Scottish leader Wendy Alexander said the budget was filled with "broken promises". Rival parties attacked the minority administration for shelving a key manifesto pledge to scrap student debt.
She added: "Today is day one, let the government tell us what they are doing, today is a day of broken promises. Ministers will also cut P1-3 class sizes to no more than 18 - another pledge which opposition parties repeatedly called on the SNP to deliver - but the move was uncosted in the budget document and without a clear timescale.
"There is no commitment to skills, there is not enough on infrastructure and we will be the highest taxed part of the UK given the SNP plans for a local income tax." The planned tax freeze came in an agreement with local authority umbrella group Cosla, and can expect to get a total of £34.7bn over the next three years - although they will not be able to confirm the plan until they set their tax levels in February.
Mr Swinney told MSPs on Wednesday: "Unlike previous budgets in Scotland, this budget will match our spending with our overarching purpose of government.
"It is a major step forward in aligning the whole of the public sector in support of our key objectives.
READ IN FULL Scottish Budget - Spending Review 2007 [833KB] Most computers will open this document automatically, but you may need Adobe Reader Download the reader hereREAD IN FULL Scottish Budget - Spending Review 2007 [833KB] Most computers will open this document automatically, but you may need Adobe Reader Download the reader here
"We will invest explicitly in making Scotland wealthier and fairer; smarter; healthier; safer and stronger and greener with the overall purpose of increasing sustainable economic growth. Mr Swinney also promised "record" spending in public transport, while outlining funding for green energy projects and community regeneration and cuts in business rates for 150,00 small firms from next April.
"As part of this transformation we are freeing local government to succeed, removing ring-fencing and enabling councils to allocate resources according to local priorities and in line with a new performance framework." He told the Scottish Parliament: "This is a budget to set Scotland on the route to growth. It heralds a new era of optimism, opportunity and delivery for all of Scotland.
He also told MSPs that from April next year, 150,00 small firms would see their business rates reduced - "and, in due course, for many removed". "With investment in our public services, matched by lower and fairer tax, I believe this budget meets the aspirations of the people."
Other key announcements included;Other key announcements included;
  • £97m to phase out prescription charges
  • £97m to phase out prescription charges
  • £1.6bn investment in housing and regeneration
  • £1.6bn investment in housing and regeneration
  • £350m of new money on health improvement and better public health
  • £350m of new money on health improvement and better public health
  • More than 20,000 new teachers in training
  • More than 20,000 new teachers in training
  • 570 hours of nursery provision for 100,000 three and four year-olds
  • 570 hours of nursery provision for 100,000 three and four year-olds
  • Investment of £5.24b over three years to the further and higher education sectors
  • Investment of £5.24b over three years to the further and higher education sectors
  • An average of £120m a year capital investment in modern prisons
  • An average of £120m a year capital investment in modern prisons
  • £126m to local authorities for flood defences
  • £126m to local authorities for flood defences
    • But Mr Swinney's statement on the 150-page budget document disclosed that at least one key pledge - scrapping student debts - was being shelved. Mr Swinney said the ambitious spending plans came despite the tightest UK spending settlement since devolution, while also disclosing that a target of 1.5% annual efficiency savings for the public sector would increase to 2%, to free up £1.6bn.
    He told MSPs: "I know there is insufficient parliamentary support for student debt servicing or for loans to grants, and we must therefore prioritise funding on policies that we can deliver and which will be supported by parliament." He also said that no contingency cash had been set aside for emergencies, but insisted that a prudent approach would see the government through.
    He also disclosed that a target of 1.5% annual efficiency savings for the public sector was to be increased to 2%, in order to free up £1.6bn. "The achievement of this target will be a significant challenge and I make it clear that everyone in the public sector must play their part in delivering the clearer and simpler government that will make these savings," he said.
    While plans to scrap student debt were shelved, there will be a gradual move from loans to grants and total investment in higher and further education of £5.24bn over three years.
    Mr Swinney said there was a lack of parliamentary support to "service" student debt.
    But Labour finance spokesman Iain Gray said: "For 18 months the SNP told Scottish students that it would write off their debt immediately," Mr Gray said. "This pledge took Mr Swinney 18 seconds to ditch."
    BUDGET PROCESS 14 November - Finance Secretary John Swinney's statement to HolyroodNovember/December - Holyrood subject committees scrutinise relevant portfolio areas19 December - Subject committees report back to finance committee16 January - Finance committee makes recommendations20 January at latest - Scottish Government lays budget bill before parliamentLate January - MSPs asked to endorse bill general principlesLate January/early February - Bill returns to finance committee for further scrutiny.Early February - Parliament decides, in a final vote, whether to pass the budget.BUDGET PROCESS 14 November - Finance Secretary John Swinney's statement to HolyroodNovember/December - Holyrood subject committees scrutinise relevant portfolio areas19 December - Subject committees report back to finance committee16 January - Finance committee makes recommendations20 January at latest - Scottish Government lays budget bill before parliamentLate January - MSPs asked to endorse bill general principlesLate January/early February - Bill returns to finance committee for further scrutiny.Early February - Parliament decides, in a final vote, whether to pass the budget.
    "The achievement of this target will be a significant challenge and I make it clear that everyone in the public sector must play their part in delivering the clearer and simpler government that will make these savings," said Mr Swinney. Mr Gray claimed the budget was one of "broken promises", adding that Mr Swinney had been "desperate" to sign a deal on a council tax freeze with Cosla.
    The minority Nationalist administration needs the support of rival parties to get the budget plans through Holyrood. "Gambling everything on being able to come here with a piece of paper - the Neville Chamberlain of Scottish politics - claiming a council tax freeze," he said.
    Labour, the Lib Dems and the Tories have already accused the SNP of breaking a manifesto pledge over delivering new police officers. Liberal Democrat leader Nicol Stephen said Mr Swinney should have admitted that the SNP's sums did not add up instead of promising "everything to everyone".
    Labour claimed the SNP had so far put off at least 60 decisions. "That would've been difficult, but it would at least have been honest," Mr Stephen said.
    The Treasury announced in October that Scottish Government spending would go up by an average annual rate of 1.8% over the next three years, an increase of between £1.2bn to £3.7bn each year. "Instead this is a budget of sham promises, shifty auditing, a budget of deception, spin and half-truths."
    Following Mr Swinney's address Green MSP Patrick Harvie said he was disappointment at the overall lack of commitment to social and environmental justice. Tory finance spokesman Derek Brownlee said the public would welcome a council tax freeze, but called for the "political heat" to be taken out of how the level of increase was decided.
    However, he said he welcomed the multi-million pound climate challenge fund and the scrapping of government support for new air routes from Scotland. He added: "If we and the voters had an independent assessment of what level of local authority funding is required to maintain service levels at any given level of council tax increase."
    Green MSP Patrick Harvie welcomed measures to make agriculture, housing and energy use lower carbon, but added: "It's a step or two in the right direction compared with the last lot, but measures to tackle climate change still account for less than a third of the spending on motorways."