Scottish Government budget under fire over £4m funding cut lined up for new agency for region

An annual kitty of £32m had been lined up for the new agency, due to be launched at the start of April, but that has been cut to £28.1m in the budget, presented by Holyrood public finance minister Kate Forbes, standing in for Derek Mackay following his resignation as finance secretary earlier today over messages he exchanged with a 16-year-old boy.

That funding cut, matching a reduction in funding for Highlands and Islands Enterprise from £61.1m to £58.2m, before the organisation is even up and running has come in for criticism from politicians in the south of the country.

South Scotland Labour list MSP Colin Smyth said: “This is a real kick in the teeth for the new south of Scotland enterprise agency even before it has started its work.

“When the legislation was passing through parliament, the Scottish Government were at pains to claim it would have a projected budget of £32m in its first year, but it turns out it will be nearly £4m less.

“That will mean less money to support local businesses and create jobs at a time when the local economy continues to fall behind much of the rest of Scotland.

“The budget for the new agency is linked to that of Highlands and Islands Enterprise, which is suffering massive cuts.

“Had their budget risen by inflation in the last decade, it would have been double the level it is now.

“That would have meant our new south of Scotland enterprise agency would have a budget of nearly £60m when it is set up, not the cuts it is facing now.”

Ettrick, Roxburgh and Berwickshire MSP Rachael Hamilton added: “The funding for the south of Scotland enterprise agency falls short of expectations.”

Presenting Mr Mackay’s budget, Ms Forbes insisted the new agency will make a big difference to the region, saying: “In 2020-21, South of Scotland Enterprise will be established.

“It will drive sustainable and inclusive economic growth across the south of Scotland, harness the potential of its people and resources and sustain and grow its communities.

“With its remit of furthering the economic and social development of the south of Scotland and improving the amenity and environment of the area, it will make a real difference to the quality of life of people in the south of Scotland.”

The Scottish National Party government’s budget also includes a commitment to open a new railway station at Reston in Berwickshire and an increase in NHS Borders’ funding for the coming year from £207.7m to £219.8m.

The revenue settlement proposed for Scottish Borders Council is just short of £222m.

Unveiling the government’s financial plans, Ms Forbes, MSP for Skye, Lochaber and Badenoch in the Highlands, said: “The global climate emergency is at the centre of our programme for government, and we have already put in place the most ambitious climate legislation and targets of any country. This budget will help deliver on that world-leading ambition.

“From increased investment in low-carbon transport to funding for peatland restoration and forestry, this budget sets out our spending plans to help us deliver the transformation we need across society to transition to net-zero.

“We have also put wellbeing firmly at the heart of this budget to benefit as many people as possible across the country.

“We will do this through prioritising inclusive economic growth with the creation of high-quality jobs, supporting our public services and tackling inequalities head on.

“We estimate that we are investing at least £1.4bn to support low-income households, mitigating the worst effects of the UK Government’s benefit cuts, which are hitting the poorest in society, and our Scottish child payment will help lift 30,000 children out of poverty when it is fully rolled out in 2022.

“I urge the parliament to work constructively with us to pass this budget in the national interest.”

Mrs Hamilton and Borders MP John Lamont, a fellow Conservative, are unimpressed, however.

“We could have seen a commitment to fund the dualling of the A1 or improvements to the A7 and A68 which the Borders desperately needs.

“Scotland benefited from a £1.2bn bonus from the UK Government, yet the SNP fail to pass this funding on to local councils and services.

“All the additional spending that Scotland benefits from is supported by the union dividend, now worth nearly £2,000 for every man, woman and child in Scotland.

“In its current form, the Scottish Conservatives cannot support this budget, and we urge the SNP to take on board our constructive proposals to reverse the declining standards in our Scottish public services”.

Mr Lamont, MP for Berwickshire, Roxburgh and Selkirk, added: “The SNP continue to criticise the UK Government, yet we see an additional £1.2bn coming from Westminster to fund public services in Scotland.

“Scotland remains the highest taxed part of the UK, and the SNP could have used this budget to correct this.

“We offered constructive and positive budget proposals, yet the SNP have brushed them aside.

“Funding to protect police officer roles and tackle homelessness have been simply dismissed.

“As this SNP government is operating as a minority administration, they will have to get round the table and take on board proposals from our party to ensure the budget passes.”