Hansard

Argyll and Bute Council’s need to support islands will be covered by the special islands needs allowance, which is applied to all local authorities that have islands within their boundaries. That allowance has been applied appropriately in the local government distribution formula to address the issues for Argyll and Bute Council.

One other issue for the council is the distribution of supporting people money. The local authority has been in touch with the Government about that and we continue to discuss it with the council.

As part of the economic response, we are strengthening the Government’s approach on education and skills. We are preserving university and college places while upholding our commitment not to raise university tuition fees or college charges. The budget provides for 34,500 training opportunities in 2011-12, and we will continue to work with the sector to maximise the opportunities that are available to members of the public. We will also continue the education maintenance allowance scheme, honouring our commitment to support the students who come from the poorest backgrounds in Scotland.

The settlement for local authorities includes the continued and successful implementation of the curriculum for excellence and maintains the pupil teacher ratio in the crucial early years of primary school, which is critical in enabling young people to flourish in the future labour market.

We are promoting new business growth by continuing the small business bonus scheme, which benefits 74,000 business properties, as part of a package of business reliefs that is worth £2.4 billion over five years.

I considered it necessary as part of the budget to examine what options might exist to raise a small amount of additional income through business rates. The option on which I settled was the business rates that some of our largest retail stores pay. For that reason, I laid before the Parliament the regulations that were considered earlier today at the Local Government and Communities Committee. Unfortunately, the committee did not approve the regulations. They will, therefore, be subject to consideration by the full Parliament next week, which we welcome. We will continue to press the case that those with the broadest shoulders should bear more of the burden at a time when Westminster has slashed Scotland’s budget by £1.3 billion and GDP in the United Kingdom has gone into reverse.

The development of the Scottish loan fund will help to address a gap in the market for loan finance for established growth and exporting companies. Improved access to finance will be a key condition for a strong recovery.

The budget maintains support for attracting additional inward investment through the regional selective assistance, R and D plus and training plus schemes. It also maintains support for boosting export growth, including through the smart exporter initiative. The recent successful visit by the Chinese Government further illustrates our commitment to developing Scotland’s comparative advantage in the global economy and delivering direct economic results and benefits to companies and people in Scotland.

We will also support jobs directly through our infrastructure investment programme. In spite of the 25 per cent cut to our capital budget, we will deliver strategic commitments, such as the new Forth crossing, the new south Glasgow hospitals project and the school building programme, and we are protecting local government’s share of the overall capital budget. Furthermore, we have announced a programme of infrastructure investment in health, education and strategic transport projects worth £2.5 billion, which is to be delivered through the non-profit-distributing model and will help to maintain construction jobs over the medium term.

We will continue to make the case to the United Kingdom Government for early and meaningful borrowing powers for Scotland.

More broadly, the holistic approach that we have taken reinforces our social contract with the people of Scotland. In difficult economic times, the Scottish Government has acted to protect employment and household income, to create new economic opportunities, to support front-line services and to improve our environment. We reaffirm our social contract by providing the resources to continue the council tax freeze and to implement the full removal of prescription charges, which will help households as they face pay restraint and maintain demand in the economy at a time when increases in VAT and fuel prices are presenting acute challenges to members of the public.

As part of our strategy, we have set a 3 per cent efficiency target across the public sector, and we are proposing a 10 per cent reduction in the Government’s central administration budget.

We are delivering our commitment to pass on to the health service in Scotland the consequentials arising from decisions on health spending in the UK spending review, and we are continuing provisions for free personal care.

We have worked closely with the leadership of the Convention of Scottish Local Authorities to agree a settlement for local government that maintains its share of the Scottish budget, which helps to maintain the delivery of vital local services across Scotland and to maintain core commitments on police numbers, school education and adult social care.