Managing Scotland’s Public Finances: A Strategic Approach

The Child Poverty (Scotland) Act 2017 sets out targets to reduce the proportion of children in poverty by 2030. As such, child poverty has been a priority of the Scottish Government for a number of years, although there is a change from 'reduce' to 'eradicate'. The Additional Child Poverty Analysis 2024 suggests that statistics have not improved. Finding ways to move families out of the 'benefit trap' and encouraging economic activity - whilst at the same time perhaps reducing benefits and increasing tax revenues is still worthwhile.

The population of Scotland is ~5.5m of which ~3.5m (64%) are aged between 16 and 64. Of this group 23.3% are economically inactive (per Nomis statistics). Given growing aging population: ~1.1m aged 65 and over; the large 'shoulder' in the census between 50 and 54; and slower population growth it is difficult to see where the manpower resources will come from to Grow the Economy. Together with the declining Oil and Gas (and related) industries, and almost complete disappearance of manufacturing (ship building for example), it is difficult to see where growth will be sustainable. Tourism is only viable with infrastructure and people to deliver the experiences that encourage visitors to return; renewable energy will not replace older carbon energy sources. Continually raising personal taxes is not the long term answer. Nor is finding inventive ways to charge others (infrastructure levy, or tourist levy, for example). We do not disagree with the sentiment, but it may be a time to consolidate.

Scotland, and the Scottish Government, has been an example to other nations with the progress it has made. Further work is required in Scotland, however unless other - larger - economies than ours do not make the same progress our efforts are not making the difference. Being at the forefront of technological development in renewables and the increasing role out of on and off-shore developments is still important, and the Scottish Government should continue to support and make the speed of transfer away from Oil and Gas as easy as possible for developers - whilst at the same time ensuring that the income earned from these developers (and taxes charged on their profits) remains in Scotland.

As a local authority which has seen significant real terms cuts in funding over a number of years, it is difficult to read "deliver better public services." The real terms cuts have resulted in significant cuts and 'efficiencies', closures and reductions in services. Improvements, after many years of austerity, cost of living crisis, etc., are unlikely to be affordable without significant and meaningful improvement in local government services. Similarly NHS bodies appear to be equally pressed. One area which might help is to introduce some kind of control on agency workers: locum doctors started a trend and it has spread throughout health and care (and wider). Agency costs - admittedly required to maintain services - are unsustainable. Another area is the reduction in bureaucratic process of multiple returns which have helped create the wrong split between managers and staff across public services.

Review of Council Tax and NDR is required; review of exceptions and discounts applied to both. Rates are charged on historic house values - a re-banding of charges would likely generate additional funds for local authorities.

Continually increasing personal taxes is not the answer. Scottish workers face a higher burden than colleagues across the UK.

Focus on service delivery not service reporting.

Focus on increasing economic activity not benefits to climb out of poverty.

Focus on consolidating existing services not inventing new priorities.

Focus on Local Government services.

I see no reason that by focusing on these priorities cannot provide opportunities for all groups of society. It may involve educating, or increased access, or communication links.

Progress has been slow.

Quickest way to finish something is to start it. There is a lot of work to be done in this area.

Any pay rises in Local Government need to be fully funded by the Scottish Government. There is no slack in Local Government resources to pay for any public sector pay rise - budgeted or not. Any increased revenues are budgeted against real terms cost increases in other cost areas - transport, materials, insurance, IT, etc.

Without full funding for pay Local Authority budgets will continue to be squeezed resulting in further service reductions and closure of facilities.

A review of Council Tax and NDR is required. Some of the interaction between the two taxes creates elements of unfairness - i.e. holiday accommodation below rateable value and not liable for Council tax.

Council tax bands and or house valuations are also significantly historic and could be reviewed (consider 3-year review of NDR values vs CT.)

Increasing the personal tax burden on Scottish workers is not sustainable.

Changes to the system should encourage new and small businesses.

Changes should encourage economic activity from individuals.

Would a national NDR and CT system rolled out to LAs be more efficient?

Reduce benefits for individuals who choose to be economically inactive.

Reduce higher tax thresholds for those who may choose to work into a higher tax bracket.

Speed up investment in renewables transition.

Increase investment in renewables technologies and roll out of renewables transition.

There is significant investment in housing. This should continue.

Investment in renewables transition and technologies.

Increase GCG to Local Authorities to sustain existing infrastructure, including roads, buildings and vehicles.