{"id":15545,"date":"2023-09-08T12:58:47","date_gmt":"2023-09-08T12:58:47","guid":{"rendered":"https:\/\/sceptical.scot\/staging\/?p=15545"},"modified":"2023-09-29T10:27:58","modified_gmt":"2023-09-29T10:27:58","slug":"what-was-in-the-new-programme-for-government-look-in-the-long-grass","status":"publish","type":"post","link":"https:\/\/sceptical.scot\/staging\/2023\/09\/what-was-in-the-new-programme-for-government-look-in-the-long-grass\/","title":{"rendered":"What’s in the new Programme for Government? Look in the long grass"},"content":{"rendered":"\n

It\u2019s a new term at Holyrood, and a new Programme for Government \u2013 the first for the new First Minister Humza Yousaf.<\/strong><\/p>\n\n\n\n

In terms of content, however, there are not a lot of new ideas to get excited about. This isn\u2019t necessarily a criticism \u2013 we all remember the meltdown generated by a certain \u201cmini-budget\u201d statement made by the UK Government about this time last year. In addition, the public finances don\u2019t exactly have a lot of give in them at the moment.<\/p>\n\n\n\n

However (and this a criticism!) there are a few big issues that have been kicked into the long grass, yet again, some of which could raise money, others that could prove critical to preventing additional spend in the future.<\/p><\/blockquote>\n\n\n\n

Here is our first glance summary of what is on offer for the next parliamentary year.<\/p>\n\n\n\n

A focus on rebuilding trust with business<\/h2>\n\n\n\n

The First Minister\u2019s New Deal for Business Group was mentioned several times as a way the Scottish Government plans to rebuild relationships with business after a rocky few months in the Spring.<\/p>\n\n\n\n

The FM has said the PfG is \u201canti-poverty, pro-growth\u201d. The data we published last week<\/a> showed that the Scottish Government does have some way to go to build trust with business.<\/p>\n\n\n\n

There is a specific commitment to \u201cwork with business to identify and remove regulations that are no longer required, if a good case can be made\u201d. It will be interesting to see how this works in practice \u2013 particularly given the recent response to concerns about the short-term lets regulations<\/a>.<\/p>\n\n\n\n

More widely on the economy, there is a commitment to a new Green Industrial Strategy. While many may welcome a clear expression of how the Scottish Government plan to grasp the economic opportunity presented by net zero, the thought of another Government strategy document may also fill some with horror.<\/p>\n\n\n\n

Childcare<\/h2>\n\n\n\n

Widely trailed, the expansion of childcare makes up a key plank of the commitment to reducing poverty.<\/p>\n\n\n\n

However, in terms of detail, there isn\u2019t a lot to go on. A vague commitment to phase in funded support to those two-year-olds \u201cwho will benefit the most\u201d, developing some evidence on what might be required for future expansion for those over nine months and at primary school, and testing a new digital service for parents managing their childcare is the extent of it.<\/p>\n\n\n\n

We may have to wait till the Budget until we have any more clarity on what the scale of some the spend and outcomes here could be. There appears to be no commitment to expanding the childcare entitlement to two-year-olds on the same basis currently offered to three- and four-year-olds, though we can only infer that from reading between the lines of the document.<\/p>\n\n\n\n

A figure of 13,000 additional children and families accessing funded childcare is mentioned, but it\u2019s not clear what this this relates to or what this will do to reduce poverty. Overall, these announcements are unlikely to add up to a significant impact on child poverty numbers unless they are deployed at a much larger scale.<\/p>\n\n\n\n

There is also a specific funding commitment for the next budget year to increase pay in the early learning and childcare sector to \u00a312 an hour, in line with the commitment for social care workers. Given the recent concerns from the childcare sector about the viability of their operations, it will be interesting to see if this alleviates their concerns.<\/p>\n\n\n\n

What wasn\u2019t in there<\/h2>\n\n\n\n

There is scant mention of the National Care Service, other than the Bill will continue (\u201csubject to the agreement of Parliament\u201d which sounds fairly ominous), but we had previously been promised an update \u201cafter the summer recess\u201d on what the Government\u2019s updated plans (and associated costings) are. The Programme for Government would have been an obvious place to provide that update, but we shall have to wait a bit longer to see<\/p>\n\n\n\n

On Council Tax, there will be a \u2018continuation\u2019 of the Joint Working Group to identify further reforms to council tax (we have a few ideas<\/a>) and some new levers to be handed over to local government for empty and second properties. Nothing substantive here and another year, it seems, of everyone avoiding dealing with the thorn in the side of any claims that Scotland has a progressive tax system.<\/p>\n\n\n\n

Little detail on fiscal trade-offs<\/h2>\n\n\n\n

In May, the Deputy First Minister presented the Medium-Term Financial Strategy (MTFS), in which outlined three pillars to achieving fiscal sustainability \u2013 spending decisions focused on critical missions, supporting economic growth and a strategic approach to tax policy \u2013 set against the backdrop of spending commitments in excess of funding by \u00a31bn in 2024-25, rising to \u00a31.9bn by 2027-28. At the time, the SFC expected a larger income tax reconciliation than has transpired, and the increased borrowing powers in the latest Fiscal Framework Agreement also help ease some of this, but we think the funding gap remains at around \u00a3600m \u2013 still a large number.<\/p>\n\n\n\n

The Programme for Government adds little detail on how the Scottish Government will deal with this shortfall. There is a vague mention of \u201cmore effective targeting of existing provision and services to support those who need it most\u201d in line with the MTFS, but no specifics on whether there will be cuts to programmes and if so, to which. The list of public service reform activities, while welcome (who could object to cataloguing assets or trying to save public funds on estates?), is hardly transformational, and unlikely to go a long way towards addressing the funding gap.<\/p>\n\n\n\n

There is also no detail on the direction of travel of the taxes the Scottish Government does control, with a tax strategy promised for May next year instead \u2013 and of course we will know more about plans for 2024-25 come Budget time, even if being clear in advance and about longer-term intentions would be more in line with the aim of being strategic in tax policymaking.<\/p>\n\n\n\n

The First Minister did outline the intention to introduce a new Building Safety Levy akin to that legislated for by the UK Government for England and which will apply from next year, with the intention to make developers contribute to the cost of cladding remediation work. But this is not part of current devolved powers, and so the Scottish Government would need to successfully negotiate that with the UK Government before even starting the lengthy process of introducing and designing a new levy. So it\u2019s unclear when it could come into place, assuming the Scottish Government did get said powers.<\/p>\n\n\n\n

As for revenues, clearly that depends on the tax rate \u2013 but that would have to be balanced against the Government\u2019s intention to encourage further housebuilding. If it were to be levied at a similar rate to England, while it no doubt would raise welcome revenues, it would not be a major solution to the medium-term funding gap.<\/p>\n\n\n\n

Looking ahead to the budget \u2013 on 14th<\/sup> December??<\/h2>\n\n\n\n

So, we\u2019ll need to get the details on these trade-offs \u2013 and therefore the areas that will be bearing the brunt of any cuts \u2013 in the Scottish Budget itself. Given we\u2019ve heard today that the UK Autumn Statement will be on 22nd<\/sup> November, the usual timing would mean the Scottish budget would be on 14th<\/sup> December. We\u2019ll have to wait for confirmation from the Scottish Government on the timing, which hopefully will come soon!<\/p>\n\n\n\n

First published by Fraser of Allander Institute <\/a><\/em><\/strong><\/p>\n\n\n","protected":false},"excerpt":{"rendered":"

Humza Yousaf\u2019s first programme for Government kicks several big fiscal and other policy issues into the long grass.So, do we have to wait till the Scottsh Budget likely on December 14?<\/p>\n","protected":false},"author":415,"featured_media":12393,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[319],"tags":[],"class_list":["post-15545","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy"],"_links":{"self":[{"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/posts\/15545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/users\/415"}],"replies":[{"embeddable":true,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/comments?post=15545"}],"version-history":[{"count":0,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/posts\/15545\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/media\/12393"}],"wp:attachment":[{"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/media?parent=15545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/categories?post=15545"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/tags?post=15545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}