Finance Secretary warns of ‘terrible calamity’ if Holyrood fails to pass budget

Scottish public services could face “terrible calamity” if Holyrood is unable to pass its budget in time, Finance Secretary Derek Mackay has warned.

He has accused the Westminster Tory Government of disrespecting devolution by delaying the UK Budget until March.

Chancellor Sajid Javid has promised a post-Brexit spending spree when he unveils his proposals on March 11.

But the delayed UK Budget date has prompted a furious reaction at Holyrood as it leaves Scottish Government ministers very little time to prepare and pass their own tax and spending plans for 2020-21.

Sajid Javid
Chancellor Sajid Javid will unveil his Budget on March 11 (Stefan Rousseau/PA)

Scottish Finance Secretary Derek Mackay – who found out about the Budget date via the media – said: “This is disrespectful of devolution. The UK Government I think know the consequences but don’t care about the consequences.

“It appears to me that the Tory UK Government has given up on the union altogether, in not wanting to make our established processes work.”

If Holyrood fails to pass a rates resolution as part of the process by March 31, a Scottish Government spokesman said there would be no authority for the collection of the Scottish portion of income tax – potentially putting £13 billion of revenue at risk.

Mr Mackay confirmed this to MSPs, saying the “Scottish rates resolution must be passed to raise any income tax revenue at all”.

Scotland’s 32 local authorities are required to set their budgets and council tax rates by March 11 but will not know at that point how much cash they will receive from the Scottish Government.

Mr Mackay said: “It would be unthinkable if the budget in Scotland wasn’t passed because that would bring about terrible calamity for our public services, communities and people of Scotland.”

He is now considering temporarily amending local government legislation to allow councils to set their budgets at a later date.

Answering an urgent question on the issue at Holyrood, he criticised the UK Government, claiming he understood the Budget was “good to go” in November but the Tories had chosen to delay “for whatever reason”.

Scottish Liberal Democrat leader Willie Rennie branded the decision not to hold a Budget until March as “shoddy”.

Meanwhile, Scottish Green co-leader Patrick Harvie said: “It scarcely matters anymore whether this is being done by the UK Conservative Party deliberately to cause chaos or simply because they don’t care. The effect is the same.”

With Holyrood having to pass its own budget by March 31, Mr Mackay said “exceptional, bespoke process” would be needed.

He pledged to work with the opposition parties, Holyrood’s Finance Committee and the Scottish Fiscal Commission to help achieve this – and urged others to do the same.

“Just because the UK Tory Party and UK Government has acted irresponsibly, I think there is duty on all opposition parties in this parliament to act responsibly in terms of process,” the Finance Secretary said.

But he added: “If there is a truncated period of scrutiny it is not because of the actions of the Scottish Government –  it is because of the actions of this reckless UK Tory Government who have taken us to this position.”

First Minister’s Questions
Murdo Fraser has hit back at the SNP (Jane Barlow/PA)

Conservative MSP Murdo Fraser said the delay to the Budget was caused by December’s general election, saying this was something the SNP had been “calling for”.

The Tory said: “They can hardly put the blame elsewhere when they were demanding a general election.”

Mr Mackay responded: “I understand the UK Budget was good to go in November last year.

“In January of this year there is no reason the UK Government can not go ahead with their Budget now.

“And the general election was mid-December, the Tories could have got on with it.”

He spoke out after experts at the Chartered Institute of Taxation warned the Scottish budget process will have to take place “at breakneck speed, with little room for manoeuvre”.

@COSLA Resources Spokesperson @CllrGMacgregor has said that the @GOVUK decision to not hold a budget until the 11th March significantly impedes the ability for Scottish local authorities to formulate their own budgets.https://t.co/YmfZBKKUfppic.twitter.com/Z1E9lQ4IIi

— COSLA (@COSLA) January 7, 2020

Local government body Cosla accused the UK Government of  “putting thousands of essential public services at risk of going without funding” by not having a Budget until March.

Resources spokeswoman Gail Macgregor said: “Local authorities carry out a complex and hugely important role in our society.

“As the employer for 10% of Scotland’s workforce and a procurer of over £6.3 billion in goods, we are the key economic driver for communities across the country.

“Any delay to our budgets means that these services are put at risk.”

A spokesman for the Treasury said: “Nothing stops the Scottish Parliament from passing their budget before the UK Budget.

“We are working with the Scottish Government as part of an agreed process to provide the information they need to prepare their budget.

“At the spending round, we announced that the Scottish Government’s block grant will increase by £1.2 billion next year.”

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