Campaign groups have hit out after the plans failed to live up to their proposals.
Campaigners and charities from across the third sector have hit out at the “short-term budget sticking plasters” offered by the Scottish Government in its draft fiscal plans.
On Tuesday Deputy First Minister of Scotland and Cabinet Secretary for Finance, Shona Robison, delivered her government’s draft budget for 2024/25, which outlined the “social contract with the people of Scotland” she said the administration held.
Ms Robison, speaking to her first budget since taking on the role earlier this year, said that decisions were being made in “turbulent circumstances”.
The Scottish Government, the Cabinet Secretary said, was asking the top earners in society to pay a bit more to help carry the burden of the funding black hole facing the country.
Ms Robison said: “At the heart of this budget is our social contract with the people of Scotland where those with the broadest shoulders are asked to contribute a little more.
“When public services need investment and protection from UK Government cuts - this government does believe that those with the broadest shoulders should pay a higher tax rate.
“And, to be clear, by the broadest shoulders, I mean the top earning taxpayers.”
However despite these promises, the disappointment from third sector organisations was clear as they responded to the financial plans for next year.
Children’s charities joined together to lament the lack of uplift in the Scottish Child Payment, which saw just an inflationary increase.
Groups had called for a much more significant rise from the previous rate of £25 to deal with the ongoing cost of living crisis in Scotland, criticising the decision to award a freeze in Council Tax, which some said would benefit the more wealthy in society.
Director of the Child Poverty Action Group (CPAG) in Scotland, John Dickie, said: “The First Minister said during his leadership campaign that he wanted to see the Scottish child payment rise to £30 per week in his first budget.
“It is bitterly disappointing for struggling families that he has failed to deliver. We know he had to make difficult choices but having chosen to fund a council tax freeze that financially benefits better off households it is hard to understand why his government couldn’t choose to boost the incomes of our hardest up families.”
Others noted their disappointed that Humza Yousaf previously campaigned to increase the Scottish Child Payment to £30, and today’s uplift only reaches £26.70.
Fiona Steel, national director for Scotland at Action for Children, added: “We understand the pressure the Scottish Government are under, and welcome Scottish benefits being increased in line with inflation, but this budget does not meet the challenges facing children and families.
“If we look through the eyes of a vulnerable Scottish family - today’s tax changes include mixed messages. Whilst income tax changes are progressive, the council tax freeze is regressive, and will only save low-income families 53p a week whereas wealthier families stand to gain more.
“This budget will mean some impossible choices for families, and we know first-hand the impact it will have on children and young people – despite our bold policy calls this means third sector support will be needed more than ever.”
Save the Children echoed these concerns, questioning how Scotland could now meet its 2030 child poverty reduction targets.
The charity welcomed “some of the commitments and steps taken” but shared their disappointment that we did not see the “step change in investment needed to tackle the root causes of low income”.
This was despite the wiping of school meal debt, the introduction of a new tax band for incomes between £75,000 and £125,140, and a one per cent rise for higher earners.
They added: “Today 240,000 children in Scotland remain locked in poverty with families struggling to put food on the table, pay the bills and invest in their children’s futures. Every child deserves the chance to thrive and hundreds of thousands of children in Scotland are being denied that right.
“We understand that budgets are tight and difficult decisions had to be made. But children cannot and must not be the collateral damage of a challenging fiscal environment.
“Under-investment in tackling the root causes of low-income will harm children and families and will cost our whole society more in the long run. This parliament made a cross-party, legally-binding commitment to drive down child poverty – this budget was a missed opportunity to honour that commitment.”
The head of Oxfam Scotland, Jammie Livingstone, called for long-term thinking from the Scottish Government.
He said: “Tackling the key challenges facing Scotland – including poverty, climate change and inequality – requires long-term thinking rather than short-term Budget sticking plasters.
“This sobering budget demonstrates disappointingly disjointed policy making on tax. While the changes to Income Tax are fair and proportionate, the gains will likely be largely offset by a misguided Council Tax freeze which will do very little to help people on low incomes. The overall result will be a damaging squeeze on many vital public services which we all rely on, but which are particularly vital for those living in poverty.
“This budget once again fails to see the bigger picture as it is painfully silent on the urgent need to build cross-party consensus behind the fundamental, far-reaching, fair tax reforms required to truly invest in unlocking Scotland’s potential.”
Concerns were also raised about the welfare of Scotland’s older generation.
Joanna Elson CBE, chief executive at Independent Age, said: “We welcome the Scottish Government’s greater focus on older people in poverty in today’s budget. The news that all devolved social security payments, including the Winter Heating Payment, have been uprated by inflation and that the fund for Discretionary Housing Payment has been increased will be a welcome relief to those struggling financially in later life.
“However, these measures do not go far enough for the 150,000 older people now living in poverty in Scotland, a figure that has risen by a quarter in the last decade alone, now affecting one in seven. Today they really needed the Scottish Government to announce a clear, long-term strategy with legally binding targets and ambitious action to tackle pensioner poverty and reverse this frightening trend.”
The overall feeling among charities seemed to be one of disappointment, with Peter Kelly , director of The Poverty Alliance, saying the foundation of our society and our economy has “been weakened badly”, and the budget “fails to deliver the fundamental changes we need to address poverty”
He added: “We welcome the changes to income tax announced today. They not only raise important revenue, but set out how we can make the Scottish tax system more progressive. However, these steps are just the first and we need to go further.
“The Cabinet Secretary told MSPs that she has no options on wealth taxes. We fundamentally disagree, and research from organisations like IPPR and the STUC show that much more can be done to reduce wealth inequality in Scotland and raise more to repair the fabric of our society. The most prominent form of wealth in Scotland is property, and the Scottish Government could have finally delivered the long-promised fundamental reform of our unjust and regressive council tax system.
“We await to see what local authority leaders have to say about funding for the council tax freeze, but our fear is that it will not be enough to protect the services that we all rely on, but which are a lifeline for many people struggling on low incomes. This freeze was badly thought-out, doing little to help people in poverty, while providing a bigger cash boost to wealthier households. The Scottish Government have framed this as a budget which will protect public services, but the freeze undermines that ambition.
Fears over the cut to Scotland’s housing budget were also raised, with concerns that £700m had been wiped from the Affordable Housing Supply Programme budget by construction inflation.
Shelter Scotland posted on social media to say that ministers had “again slashed Scotland’s housing budget.
Mr Kelly added: “As a minimum, we had joined the Scottish Federation of Housing Associations in calling for this resource to be reinstated. Today’s announcement has failed to do this, and the government has instead made further cuts to the housing budget. With a record number of homeless children living in temporary accommodation, this will have long-term consequences for the ability of families to find secure and affordable homes.
“We welcome the language used in the Budget around the values of equality, opportunity, and community. We welcome the commitment to a social contract, where those with the broadest shoulders contribute a bit more. But we need to see much more evidence of the Scottish Government turning those values into concrete action that will give people the freedom and security they need to build a life beyond poverty.”
