Niall Houston takes us through another week in Holyrood, including the provisional outturn statement, Stage 3 debate on the Animals & Wildlife (Penalties, Protections & Powers) BIll and the First Minister’s update on lockdown.
Fiscal Implications of Covid-19
As COVID-19 continues to dominate business at the Scottish Parliament, MSPS will discuss the virus’s economic impact. On Tuesday, the Scottish Government will hold a debate about the fiscal implications of COVID-19. The Finance & Constitution Committee has received a written submission from the Institute for Fiscal Studies on the impact of COVID-19 has on public finances and the fiscal framework. It shows a large share of the Scottish workforce work in sectors such as hospitality, are likely to be hard hit and may take a significant time to recover. The Institute for Fiscal Studies also suggests the Scottish economy is much more dependent on the oil and gas sector, where prices have fallen and may remain depressed. On the other hand, a larger share of the population work for the public sector and may be relatively insulated from the economic effects of the crisis. There is a forecast reduction in funding of £600m in 2021-22 due to reconciliation of income tax revenues. The Scottish Government is able to hold reserves of up to £700m in total and draw up to £250m a year for day-to-day spending – plus up to £100m for capital spending. For the current financial year, Budget forecasts suggest there could be around £107m of unallocated reserves that could be utilised, which might sound sizeable but is less than 0.3% of the Scottish Government’s Budget and less than 1% of the Scottish NHS’s budget. The Institute for Fiscal Studies have said previously that is a case to give devolved administrations greater access to borrowing via the National Loans Fund and the removal of the annual cap on drawdowns from reserves would also enable additional spending. Devolving these powers could potentially help the Scottish Government develop, cost and announce plans more quickly than if they have to wait until UK government plans for England have been announced. On Friday 12 June, Kate Forbes told the Finance & Constitution Committee that the Scottish Government needed extra flexibility in relation to switching capital resources to revenue, guaranteeing a baseline level of consequentials and increased flexibility over borrowing, powers she felt were “pretty basic” for a Government to have.
Provisional Outturn Statement
Kate Forbes is set to make a statement this week on the Provisional Budget outturn. During last years outturn statement, it was announced that the Scottish Government under-spent its Budget by almost half a billion pounds, as figures showed an overall spending of £32bn, against a Budget of around £32.5bn. The figures last year showed that the Scottish reserve was £135m. Although underspending last year, the Scottish Government has had to increase spending dramatically in order to address the coronavirus pandemic. Last month, the Scottish Government released a budget revision which showed changes increased the Scottish Government budget from £49,250.7m to £52,037.9m. This is a gross increase in funding of £4,014.4m, which is then offset by a reduction of £972m in Non Domestic Rates income arising as a result of a number of reliefs introduced by Scottish Ministers in response to the COVID-19 emergency, and savings from reprioritisation of £255.2m, to give the net increase of £2,787.2m. The allocation of £105m to the coronavirus response has been diverted from domestic energy efficiency loans for 2020-21 and redeployed as an emergency loan fund to SME housebuilders facing liquidity issues.
Stage 3 Animals & Wildlife (Penalties, Protections & Powers) Bill
Stage 3 proceedings of the Animal and Wildlife Bill are set to take place on Wednesday. The Bill aims to increase penalties for serious animal welfare and health offences. It will also increase penalties for wildlife crime and hold anyone accountable who deliberately causes harm to a service animal. Inspectors and constables will be able to act on animal welfare issues. An offence does not need to have taken place and they will not need to wait for a court order. This will allow them to ease the suffering of animals. Alison Johnstone has lodged an amendment which would make mountain hares a protected species, effectively ending managed control. She also has a proposed member’s bill to end the killing of the hares and foxes. Mark Ruskell has also lodged an amendment which would reintroduce a ban on dog tail docking.
First Minister Statement on Lockdown
The First Minister is set to make a statement this Thursday regarding the next steps for lockdown. At Sunday’s briefing, Nicola Sturgeon reiterated progress was still fragile, and the threat of the virus remained. However, it looks likely during the statement that the First Minister will announce Scotland can transition into Phase 2 of the routemap out of lockdown. The First Minister hoped she could announce that people who were shielding would be allowed outside for exercise, more socialising, further movements in the reopening of the NHS, along with an indicative date for the retail sector regarding when it might be able to reopen. The First Minister also said guidance would be published this week in advance of any possible changes in early learning childcare, the retail sector and the use of public spaces.
With every discussion dominated by Coronavirus, Brexit, although side-lined, remains a big discussion point. Following a meeting of the Withdrawal Agreement Joint Committee last week, Michael Gove formally notified the EU that the UK Government will not seek an extension to the transition period, with new border controls and procedures being introduced in three stages up until 1 July 2021 from the transition period’s end. Maroš Šefčovič, Vice-President of the European Commission, although aware of the UK’s position, remains open for an extension. The decision to not seek an extension remains divisive, as the First Ministers of Scotland and Wales jointly wrote to the Prime Minister requesting the Brexit transition period be extended to ensure negotiations could be completed and businesses supported in the aftermath of the COVID-19 pandemic. In response, Michael Gove acknowledged the difference of opinion but maintained the issue was a reserved matter. However, survey responses suggest more than half of the public wish for an extension to the deadline.