Finance secretary requests early insight into UK budget

Finance secretary Derek Mackay has written to the UK Government asking for more flexibility over his budget, including early insight into the UK’s plans for tax and spending.

Chancellor Sajid Javid’s announcement earlier this week that the delayed UK Budget will be unveiled on March 11 sparked anger at Holyrood.

Now, Mr Mackay has written to the Treasury saying the UK Budget date – which he found out about through the media – leaves him two “highly undesirable” options.

One is to publish Scotland’s tax and spending plans for 2020-21 before the UK equivalent, which he said would mean uncertainty around the final amount of block grant the UK is giving to Scotland.

The other is to push the Scottish budget through Holyrood in “an extraordinarily short time”.

The budget process at the Scottish Parliament normally involves months of scrutiny but legislation stipulates a rates resolution to enable collection of the Scottish part of income tax would have to be passed by March 31.

The same date is the legal deadline for Scotland’s local authorities to finalise their budgets.

In his letter, Mr Mackay writes: “The lateness of the UK Budget presents the Scottish Government, Scottish Parliament and local authorities with significant challenges in relation to uncertainty both on the funding available for public services in Scotland in 2020-21 and on the implications of UK Government tax policy for Scotland.”

He welcomed the Treasury’s offer of a flexible approach to revisiting block grant adjustments if the Scottish Government’s budget comes before the UK’s.

Mr Mackay set out a series of concessions he expects this to include, including revised borrowing limits and terms, and early insight into planned UK budget policy changes in confidence.

He said: “In addition to any insight you might be able to offer in confidence on future policy changes, as these are critical for our own decisions and forecasts, I am concerned about comments made during the election campaign suggesting that the UK Government ‘could’ in future bypass the Barnett formula and directly fund activity in devolved areas.

“While I will always make the case for additional investment in Scotland, the devolution settlement must be respected and accordingly I expect you to confirm our arrangements will be fully respected and that you will not depart from this.”

A Treasury spokesman said: “We are continuing to work with the Scottish Government as part of an agreed process to provide the information they need to prepare their budget.

“The Scottish Government’s budget can be passed before the UK Budget.”