Challenges for the Scottish Budget

The Scottish Budget is an annual Act of the Scottish Parliament, giving statutory authority to the Scottish Government for its revenue and expenditure plans for the forthcoming year. The 2019/20 Draft Budget will be introduced to Parliament on the 12th December. If the final stage of the bill is not completed with 70 days, after the introduction of the Bill, then the budget falls.

Since the 2016 Scottish Parliament Election, the SNP has not held a majority of seats, so they need to secure the support of at least one other party to pass their budget. It is considered extremely unlikely that either the Scottish Conservatives or Scottish Labour will back the SNP’s budget, instead choosing to gain political capital out of opposing it. Instead, the two smallest parties represented in Parliament, the Scottish Greens and the Scottish Liberal Democrats, with six and five seats respectively, have appeared the most willing to talk to the Scottish Government. The government only needs two additional votes to its parliamentary party to pass a budget and so far in this parliament have relied on the Scottish Greens to pass their budgets.

This year appears to be the toughest battle for the SNP to pass their budget in this parliament after talks stalled with the two most likely budget partners with less than a week to go until the Draft Budget announcement. Despite holding talks with the Scottish Liberal Democrats in the last two budget negotiations, the Lib Dems have not backed the budget as a party in this parliament after pulling out of talks claiming the government refused to “take independence off the table”.

The Scottish Greens, however, said if they were to back the budget, the Scottish Government would need to show a “meaningful” commitment to reforming council tax.

The only time a budget has not passed at the final stage was in 2009, when the Scottish Greens withdrew their support at the last minute, resulting in a 64-64 tie, which was broken by the Presiding Officer voting against the budget. The then First Minister, Alex Salmond, claimed that if the budget was defeated again his government would have to resign. As it happens, this never came to be and the budget was passed after opposition parties won concessions. On paper, in the event that a budget cannot be passed, then the previous budget is introduced in its place. In practice, however, it is a serious blow to the government’s authority and could lead to the government falling as Alex Salmond’s administration suggested it would in 2009.

Previous budgets have gone down to the wire, such as the 2017/18 budget which did not have the necessary cross-party support – until the Scottish Greens struck an 11th hour deal with the SNP.

The challenge that the Finance Secretary, Derek Mackay faces is that the smaller parties necessary to pass the budget are beginning to realise their worth. Both the Scottish Liberal Democrats and the Scottish Greens are upping the cost on previous years to pass the Scottish Government’s budget, attempting to get more meaningful concessions and more of their policies introduced. While both the Lib Dems and the Greens are driving hard bargains, they will respectively feel their hands are stronger to push for more, potentially reaching a stalemate where no party wishes to budge until receiving get considerable concessions from the government. It is very likely that the 2019/20 budget will see negotiations last right up until the final vote in February.