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Timetable issue

Mackay: ‘I may deliver Scottish Budget before 11 March’

Derek Mackay: going early is an option (pic: Terry Murden)

Scotland’s Finance Secretary Derek Mackay has revealed that he may deliver the Scottish Budget before Chancellor Sajid Javid makes his Commons statement on 11 March.

Mr Mackay, who is faced with a three and a half week window between the Westminster Budget and the start of the next financial year, told Daily Business that it was wrong to assume that he had ruled out an early Budget.

“Ideally, we would go after the UK government but I am looking at all options and that includes going earlier than the UK government,” he said during an interview.

Accusing the UK government of “irresponsibility”, Mr Mackay said that he understood the UK Budget was “good to go” in November and that it could have been announced this month or in February.

“To delay to March has alarmed local government and others.”

The date of the Budget is also the deadline for councils to set their budgets and council tax for the following year. Should MSPs fail to pass the Budget, the rules dictate that Scotland would revert to the tax rates and bands set by Westminster.

By custom, the Scottish Budget should be held three weeks after the UK Budget. This provides time to set and adjust Scottish spending based on tax and spending plans announced by the Chancellor, including the block grant. But that would mean his statement being delivered just days before the new financial year beginning on 6 April.

Mr Mackay said his Budget required parliamentary approval and Royal Assent and the timetable was very tight.

He is now talking to all parties, adding that there is a shared sense of frustration across Holyrood at the timing of the Westminster Budget and the failure of the Treasury to engage in the Scottish process. While he had initially been against an early Budget, the decision to push it back into March has forced him to reconsider.

The Accounts Commission, the public spending watchdog for local government, warned Holyrood’s Local Government Committee that the decision to hold the UK Budget on 11 March will be “problematic” for councils.

Fraser McKinlay, Controller of Audit, Accounts Commission said: “It is possible for councils to set council tax without approving the overall budget.

“It’s clearly not ideal in terms of good financial management although I would say given the evidence in councils these days that their medium-term and longer-term financial planning is actually in pretty good shape, they are probably in a better place to do that now than say five years ago.

“We will keep very close to the discussion and options being presented but as things stand it is really difficult to see how councils can set a fully considered and balanced budget in the timescales required.

The Treasury has insisted that “nothing stops” the Scottish Parliament from passing its budget before the UK budget.

A spokesman said it was working with the Scottish Government as part of an agreed process to provide the information it needs to prepare its budget.

He added that it was announced during the spending round that the Scottish Government’s block grant will increase by £1.2 billion next year.

See also

Javid sets tough test for Mackay with 11 March Budget

Investors defy Brexit fears to create more jobs in Scotland

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