Scottish Budget for 2021-22 unveiled

29 January 2021

On 28 January 2021, the Finance Secretary, Kate Forbes, delivered the Scottish Budget for 2021-22, which detailed the Scottish Government’s spending and taxation plans for the year ahead, including details of the support that will be offered towards jobs and skills, equalling approximately £1.1 billion.

The income tax thresholds and rates for 2021-22 have been confirmed, as the table below demonstrates:

Table 2.01: Scottish Income Tax Policy Proposals 2021-22
Band Income Range Rate
Starter Rate Over £12,570 - £14,667 19%
Basic Rate Over £14,667 - £25,296 20%
Intermediate Rate Over £25,296 - £43,662 21%
Higher Rate Over £43,662 - £150,000* 41%
Top Rate Over £150,000** 46%

* Assumes individuals are in receipt of the Standard UK Personal Allowance

** The Top Rate remains at 2020-21 level. Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000

A clear focus is placed on the creation of jobs, as follows:

  • A new Green Workforce Academy will be established, designed to assist people in securing work in the low carbon economy
  • A £100 million Green Jobs Fund
  • £7 million, which will be put towards ensuring that Scotland is a hub for digital business
  • £125 million for the Young Person’s Guarantee, employability, and skills

Additionally, more than £16 billion in funding will be provided towards health, which is a 5.3% increase on that given in 2020-21.  A further £869 million will be put towards combatting coronavirus, which will include funding for both the vaccination and test and trace programmes.

£90 million will be awarded to local authorities, to support family budgets and to freeze Council Tax.

Public sector workers who earn less than £25,000 per annum can expect to receive a minimum of a 3% pay increase, and there will be a 1% rise for individuals earning above that amount. This will be capped at £800 for those earning over £80,000.

Some other key points include:

  • £11.6 billion for local government, to include the £90 million for the local authorities opting to freeze Council Tax. There will also be £259 million allocated to one-off funding
  • £1.9 billion will be put towards primary health care for delivering more services in the community
  • £98.2 million towards improving Scotland’s digital infrastructure, and delivering access to high quality broadband and mobile coverage
  • £711.6 million will be allocated to affordable housing, and £68 million for the first full year of the Scottish Child Payment
  • £55 million towards a programme to support town centres and community-led regeneration projects
  • Over £3.1 billion for resource and capital investment for education and skills. £567 million will be put towards providing 1,140 hours of early learning and childcare
  • £1.3 billion for the Scottish Police Authority
  • £1.6 billion towards rail and bus services
  • The Rural Tourism Infrastructure Fund will be doubled, to enable tourist attractions and local communications to make improvements for an increase in the numbers of visitors
  • £27 million will be put towards the expansion of woodland creation and the associated infrastructure

Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. Download the CIPP's Payroll: Need to know - your guide to payroll legislation and reporting for the most up to date data.