Follow the money: What Scotland’s latest budget tells us about power at Holyrood

The budget has become a major set-piece of the year, particularly now Scotland faces a minority government following the SNP’s split with their Green Party coalition partners. In practice this means the Scottish Government must secure support from at least one other party for the budget to be approved in Parliament. With the Greens now in opposition following former First Minister Humza Yousef’s unexpected ending of the Bute House agreement, attention is focused on the Scottish Liberal Democrats as potential partners. With Conservatives and Labour almost certain to vote against, speculation continues on which minor party is most likely to support the budget – and what measures within it might indicate the SNP’s preferred alliance.

The budget commits £21 billion for health and social care, including funding to reduce waiting times and help reduce delays in discharge from hospital. There’s a significant focus on local infrastructure, with £768 million allocated for affordable housing and £50 million dedicated to regeneration projects across Scotland, from Lochee in Dundee to Pilton in Edinburgh.

For island communities, the budget provides enhanced revenue support for ferry services, along with £20 million one-off capital funding for Orkney Islands Council and Shetland Islands Council to improve inter-island connectivity, potentially including tunnels. This approach mirrors successful initiatives in the Faroe Islands that have helped stabilise population decline and is seen as being a nod to the Liberal Democrats who have long represented the Northern Isles at a national level.

On environmental measures, there’s £300 million for energy efficiency and clean heat programmes, alongside £90 million for protecting and maintaining woodlands and peatlands. The budget also includes £40 million for a local government climate emergency fund. These green initiatives might appeal to the SNP’s former coalition partners.

The tax measures show some interesting choices. While maintaining higher rate thresholds at £43,662, the budget increases starter and basic rate bands above inflation. The SNP claims this means more than half of Scottish taxpayers will pay less than they would elsewhere in the UK.

For businesses, the budget freezes the Basic Property Rate and maintains the Small Business Bonus Scheme, which the government says is the most generous small business rates relief in the UK. There’s also specific support for the hospitality sector, with 40% rates relief for smaller premises.

So what happens now and how will MSPs scrutinise the budget in detail?

As always, publication of the Budget initiates another round of parliamentary scrutiny before and after Christmas. Subject committees will now consider how the Scottish Government has responded to their pre-budget reports, before the debates in the Chamber and votes on the Budget Bill and income tax rate resolution in the new year. This should take place in late January and early February 2025.

Meetings between Scottish Ministers and opposition parties will have been going on for some time and are likely to continue. The classic ‘smoke filled rooms’ may be smoke free now but you can still expect some late night session full of proposals, counter proposals and last minute compromises

The success of this budget may well depend on whether these measures – particularly the island connectivity funding and environmental initiatives – are enough to secure crucial opposition support. With major investments in health, housing and climate action, alongside targeted tax and business measures, the government appears to be casting a wide net in its search for parliamentary allies. Some think this means rather than either-or it might be that both the Liberals and Greens vote with the SNP and approve this or a slightly amended budget.

Watch this space…