Concerns have been raised about the Government’s budget plans for 2024-25.
The Scottish Government has been urged to provide figures for multi-year funding alongside their upcoming budget by a Holyrood committee.
In its budget report, Holyrood’s Finance and Public Administration Committee has made recommendations regarding the choices of the Scottish Government, including on taxation and funding provided by the administration.
The Scottish Government published its 2024/25 draft budget in December, outlining the SNP-Green administration’s spending plans for next year.
The plans included little mention of the sector, with just fleeting mentions of “Fairer Funding” for the third sector, and no detail on other planned overhauls of funding for voluntary organisations and charities.
Despite a pledge from First Minister Humza Yousaf that the budget “absolutely will include”, a greater number of at least two-year grants, no mention of proposed overhauls to sector funding was made.
Writing in the report, the committee’s convener, SNP MSP Kenneth Gibson, urged the government to go further on measures that would support the sector, referencing evidence provided by the Scottish Council for Voluntary Organisations (SCVO) that underlined the pressures facing charities and voluntary organisations.
SCVO told the committee they are unclear from the figures in the Scottish Budget 2024-25 about the level of funding they can expect to receive, an issue exacerbated by a lack of detail and funds coming from different budget lines.
The committee wrote: "The Committee notes that the Scottish Government only receives funding for one year. Nevertheless, we agree with the Scottish Fiscal Commission that the Scottish Government should set out multi-year spending plans to support planning and scrutiny. Despite the uncertainties ahead, we believe that it was possible for the Scottish Government to provide some indicative figures for future years alongside the Scottish Budget 2024-25 as intended.
"We seek assurances and certainty that it will publish multi-year spending plans with the next Medium-Term Financial Strategy in May 2024.
"We further ask the Scottish Government to consider how it can resolve inconsistencies in the presentation of budgetary information and provide greater clarity to organisations at an earlier stage about the level of funding they will receive. We would in particular like to see consistency in relation to how public private partnership payments are set out in the budget.”
The committee said the Scottish Government’s budget for 2024/25 has been set amidst a context of persistently high inflation, low growth and high interest rates amidst deep cuts to capital funding.
The report added: "The Scottish Government has said that its taxation and spending plans have been prioritised to deliver its three Missions of Equality, Opportunity and Community. However, the committee is unclear from the information provided that a rounded strategic approach has been taken to assess and prioritise those areas of spend that will make most impact in delivering these Missions. In future years, it would be helpful to see a more detailed explanation of the Scottish Government’s assessment of spend against its overall priorities, along with the trade-offs it has had to make.
"Over the next three months, it will agree a shared approach, working with local government, the public and third sectors “to align, enable and deliver”, and require all Scottish Government portfolios to set out their savings and reform plans by the end of the financial year.”
Finance and Public Administration Committee Convener Kenneth Gibson said: “Significant pressure on Scotland’s public finances have presented difficult tax and spending decisions in the budget. Everybody recognises that.
“The Scottish Government priorities are based on delivering its three ‘missions’ of equality, opportunity and community. However, there was a great divergence in views from witnesses on what those priorities should be, with the focus understandably in areas where budgets will be reduced rather than increased.
“The committee is unclear how spending has been prioritised towards a fair, green and growing economy.
“Regarding taxation, there is uncertainty about the behavioural impact on taxpayers earning more than £75,000 per year and when there will be a fundamental review of the council tax.
“The Scottish Government needs to deliver long-term financial planning. At present it gives the impression that it’s procrastinating on important decision-making that would help the sustainability of Scotland’s public finances, albeit in the medium and longer-term.
A number of issues were also raised with the government with regard to taxation, with charities calling for “substantial investment”.
Jamie Livingstone, head of Oxfam Scotland, said: “Scotland faces significant social challenges: a stubbornly high poverty rate, yawning inequality, under investment in care, and a string of missed climate targets. Tackling these challenges will require substantial investment, both now and in the future.
“We simply can’t afford for Ministers to continue pressing snooze on the common sense, fair tax reforms we need to see; instead, they must wake up and build cross-party consensus behind the bold changes we need to see in order to build the fairer, greener, more equal Scotland we all want to live in.”