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Last Updated: Wednesday, 14 November 2007, 20:57 GMT
SNP budget makes council tax deal
Swinney, parliament
John Swinney delivers his budget statement at Holyrood

A deal for a council tax freeze next year has been struck with councils, the SNP government has confirmed.

The announcement from Finance Secretary John Swinney came as he delivered the Nationalists' first budget and three-year spending plans.

Efficiency saving targets will also be raised, amid the "tightest financial settlement since devolution".

Rival parties attacked the minority administration for shelving a key manifesto pledge to scrap student debt.

Ministers will also cut P1-3 class sizes to no more than 18 - another pledge which opposition parties repeatedly called on the SNP to deliver - but the move was uncosted in the budget document and without a clear timescale.

The planned tax freeze came in an agreement with local authority umbrella group Cosla, and can expect to get a total of 34.7bn over the next three years - although they will not be able to confirm the plan until they set their tax levels in February.


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Mr Swinney also promised "record" spending in public transport, while outlining funding for green energy projects and community regeneration and cuts in business rates for 150,00 small firms from next April.

He told the Scottish Parliament: "This is a budget to set Scotland on the route to growth. It heralds a new era of optimism, opportunity and delivery for all of Scotland.

"With investment in our public services, matched by lower and fairer tax, I believe this budget meets the aspirations of the people."

Other key announcements included;

  • 97m to phase out prescription charges
  • 1.6bn investment in housing and regeneration
  • 350m of new money on health improvement and better public health
  • More than 20,000 new teachers in training
  • 570 hours of nursery provision for 100,000 three and four year-olds
  • Investment of 5.24b over three years to the further and higher education sectors
  • An average of 120m a year capital investment in modern prisons
  • 126m to local authorities for flood defences

Mr Swinney said the ambitious spending plans came despite the tightest UK spending settlement since devolution, while also disclosing that a target of 1.5% annual efficiency savings for the public sector would increase to 2%, to free up 1.6bn.

He also said that no contingency cash had been set aside for emergencies, but insisted that a prudent approach would see the government through.

"The achievement of this target will be a significant challenge and I make it clear that everyone in the public sector must play their part in delivering the clearer and simpler government that will make these savings," he said.

While plans to scrap student debt were shelved, there will be a gradual move from loans to grants and total investment in higher and further education of 5.24bn over three years.

Mr Swinney said there was a lack of parliamentary support to "service" student debt.

But Labour finance spokesman Iain Gray said: "For 18 months the SNP told Scottish students that it would write off their debt immediately," Mr Gray said. "This pledge took Mr Swinney 18 seconds to ditch."

14 November - Finance Secretary John Swinney's statement to Holyrood
November/December - Holyrood subject committees scrutinise relevant portfolio areas
19 December - Subject committees report back to finance committee
16 January - Finance committee makes recommendations
20 January at latest - Scottish Government lays budget bill before parliament
Late January - MSPs asked to endorse bill general principles
Late January/early February - Bill returns to finance committee for further scrutiny.
Early February - Parliament decides, in a final vote, whether to pass the budget.

Mr Gray claimed the budget was one of "broken promises", adding that Mr Swinney had been "desperate" to sign a deal on a council tax freeze with Cosla.

"Gambling everything on being able to come here with a piece of paper - the Neville Chamberlain of Scottish politics - claiming a council tax freeze," he said.

Liberal Democrat leader Nicol Stephen said Mr Swinney should have admitted that the SNP's sums did not add up instead of promising "everything to everyone".

"That would've been difficult, but it would at least have been honest," Mr Stephen said.

"Instead this is a budget of sham promises, shifty auditing, a budget of deception, spin and half-truths."

Tory finance spokesman Derek Brownlee said the public would welcome a council tax freeze, but called for the "political heat" to be taken out of how the level of increase was decided.

He added: "If we and the voters had an independent assessment of what level of local authority funding is required to maintain service levels at any given level of council tax increase."

Green MSP Patrick Harvie welcomed measures to make agriculture, housing and energy use lower carbon, but added: "It's a step or two in the right direction compared with the last lot, but measures to tackle climate change still account for less than a third of the spending on motorways."

Watch John Swinney at Holyrood


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