Scottish Budget 2017

18 December 2017

Income tax and wages

  • The basic rate of income tax has been frozen at 20p, but a new intermediate rate of 21p will be established for those earning between £24,000 and £44,290
  • A new Scottish starter rate will be introduced, meaning earnings between £11,850 and £13,850 will be taxed at 19%
  • The higher and additional rate of tax will be increased by a penny to 41p and 46p, respectively
  • Combined, these changes mean those earning under £26,000 will pay marginally less tax than elsewhere in the UK, while tax will not change for those earning less than £33,000
  • Public sector pay will increase by 3% for those earning less than £30,000, while those earning more than that will see a 2% increase.
  • A cap of £1,600 will apply to pay increases for those earning over £80,000 in the public sector

NHS and social care

  • Health resource funding will increase by £400m, bringing the total to £13bn
  • £110m for primary care
  • Mental health investment will increase by £17m, with a pledge to deliver 800 new mental health workers
  • £550m to support social care delivery via integrated joint boards and NHS funding

Childcare and education

  • £243m is to be allocated to help deliver 1,140 hours of free childcare - £150m in capital funding and £93m in resource funding
  • The attainment Scotland fund will increase to £179m, with £120m going to the pupil equity fund and £59m in targeted support for children and young people from the most deprived households
  • An additional £10m is available to support children and young people with complex support needs
  • Local government will be given £88m to maintain the pupil-teacher ratio
  • University tuition remains free and £1.8bn will be given to colleges and universities via the Scottish Funding Council.

Business & economy

  • The economy, jobs and fair work portfolio will be given £270m more
  • £18m will go to the new national manufacturing institute
  • £122m more for city region deals
  • Business research and investment will see a 70% uplift and £10m will be provided for the new south of Scotland enterprise agency
  • The business rates relief package will total £720m, including the continuation of the small business bonus scheme
  • The poundage rate inflation will be capped at CPI next year, rather than at RPI
  • £340m has been allocated to the establishment of the Scottish national investment bank, with £150m over the next two years to go to a building Scotland fund while the bank is set up
  • Procurement for the Reaching 100 superfast broadband programme begins immediately, supported by £600m over the next four years


  • Land and buildings transaction tax (formerly stamp duty) will not apply for first-time buyers for properties under £175,000
  • £756m will be allocated as part of the wider £30bn investment for building affordable homes
  • £137m will be given to support energy efficiency and heat decarbonisation measures
  • An initial £10m has been allocated to an ending homelessness fund, with £50m to be provided over the next five years
  • The bedroom tax will continue to be mitigated


  • £1.2bn for transport infrastructure, including road and rail developments
  • A transition to electric vehicles, including green buses, is supported by £20m
  • £4bn worth of infrastructure for active and sustainable travel as part of a £20bn investment plan over the lifetime of this parliament

Economic forecasts

  • The Scottish Fiscal Commission published its first fiscal and economic forecasts
  • The economy is predicted to grow 0.7% this year and next, and 2.2% in 2022
  • Wages will increase by 2%, 2.3% and 3.1% in 2017, 2018 and 2022, respectively
  • Employment is forecast to grow 1.6% this year, but will slow to 0.6% in 2018 and 0.1% by 2022
  • Productivity growth will remain slow this year (0.2%), before speeding up slightly to 0.5% in 2018 and 1% in 2022


  • Core funding for councils will increase by £94m - resource budgets are to be protected in cash terms, while capital budgets are increased in real terms
  • £20m of additional investment will go to the police to protect revenue budgets
  • A specific figure has not been attached to the new benefits yet, but there was a pledge to provide in-year funding for the new carers allowance to begin in summer 2018

Are you interested in reading about the UK Budget? Click here to read our blog post about it.

Source: BBC News

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