The Scottish Government has announced its budget choices for 2023/24. This short blog explains why I welcome so many of the funding commitments and hopefully throws some light on where the money is going to be spent.

Scotland’s Social Contract

The motivation behind yesterday’s announcement is to strengthen what the Government is calling a Social Contract with the people of Scotland. This means asking those who earn more to pay a little more in order to deliver services for all of us – from no tuition fees, to free prescriptions, from free bus travel for under 22s and over 60s to free personal care, from free dental care for under 26s to free school meals for all primary school children.

It also allows the government to target spending at lifting people out of poverty so that all Scotland’s citizens can make the contribution to our communities and our country that is needed for us to succeed.

We often praise our Scandinavian neighbours for the high quality of their public services, their education provision, and their more equal society in terms of income and expectation. This budget seeks to move Scotland closer to that model, albeit we have far fewer powers than Sweden, Finland, Norway and others. But the Scottish Government’s direction of travel is towards a more equal, fairer society, as well as a greener one!

My highlights from yesterday’s announcement include the following:

  • Funding to continue to pay the Scottish Child Payment at £25 per child per week, and the commitment to raise this and all other Scottish benefits in line with inflation at 10.1% next April.
  • Building on our free school meals investment with £22million to provide meals during school holidays to those who need them most. All children in primaries 1-7 will be able to have free school meals from August 2024.
  • A very important £30 million investment for The Promise – the commitment to improve the lives of care experienced young people. Plus £50 million investment in a Whole Family Wellbeing Programme, for holistic, preventative family support to give children who face the greatest challenges the best opportunities.
  • £100 million will be made available to give all adult social care workers the real living wage of £10.90 an hour. I’d like to see these wages increase higher for the important work our carers do, but this is a step in the right direction.
  • An additional £26 million for the College sector and £20 million for the University sector. Education is such a vital route out of poverty, and also a right for all our young people. Higher education remains free for all Scottish students.
  • An additional £550 million for Local Government, who are often in the front line of service delivery.

And how will the Scottish Government pay for these choices as part of its social contract?

By maintaining the Higher Rate Threshold for income tax and lowering the top rate threshold by £25,000, more people become eligible to pay the two top rates of tax. The first kicks in on earnings over £43,662 and rises from 41p to 42p. The second kicks in on earnings over £125,140 and rises from 46p to 47p.

Along with an increase of tax from 4% to 6% on the Additional Dwelling Supplement (that’s tax on second homes), the Scottish fiscal Commission confirms that this will raise a total of £553 million for the Scottish Government.

There were other announcements in yesterday’s budget relating to the freezing of business rates; expansion of the small bonus scheme; net zero and decarbonisation of homes; money for planting woodland; increased funding for the Scottish Investment Bank.

But I hope these highlights give you a sense of the Scottish Government’s motivation and direction of travel in very difficult economic circumstances, with limited powers.

If you have any questions or query about these spending commitments, please email me at and I will try to answer them.