Meeting of the Parliament 21 January 2026
I will touch on a range of topics in my speech. I will start on a positive note about preventative spend, which is a topic that the Finance and Public Administration Committee and others have spent considerable time on over the years. I fully accept that differentiating between preventative and reactive spend is not an exact science. However, I was pleased to see in the Government’s response to the committee that it is
“testing a budget tagging method for tracking preventative spend”
and that it hopes to have initial results this coming summer. That looks like progress to me.
I consider the current fiscal framework to be unfair and biased against Scotland. It requires us to compete with London and the south-east of England, which most nations and regions have historically struggled to do. The whole purpose of the Barnett formula is to reduce the extra spending that Scotland gets, which was initially based on need. Our needs continue to be greater than in other parts of the UK because of rurality, historically poorer health and an ageing population. However, that is totally ignored by the fiscal framework. Wales probably suffers even more than we do.
The previous review of the fiscal framework was minimalist, to say the least. It was not what we had expected and there was next to no parliamentary involvement in it, here or at Westminster. I fully support the Government in seeking a much fuller review with the current UK Government as soon as possible.
We should also be interacting much more with Westminster on financial issues. Clearly, our finances are closely interlinked—that includes the dates of budgets, block grant adjustments, income tax, the building safety levy and so on—and yet, over the past five years, it has proved incredibly difficult to get Treasury ministers to give evidence to the finance committee. I accept that they are primarily answerable to MPs, but that is not a reason to refuse to interact with the Scottish Parliament.
Raising taxes overall is essential if we want to have quality public services. That applies to the UK and to Scotland. Most European countries are raising taxes these days, and Scotland and the UK are far from being high-tax countries. I realise that raising taxes is not generally popular, although perhaps more of the public would be willing to support higher taxes if they could see that the money was going to care services, colleges and so on.
That brings me to the topic of the general understanding of Scotland’s finances, which has already been mentioned in the debate. The UK has a complex tax system and I accept that, because Scotland must add to an underlying complex system, things here inevitably become even more complicated. However, we need to make an increased effort regarding financial education, be that for young people in schools or for new MSPs after the election.
I will move on to a couple of more specific topics. Adding two more council tax bands is not nearly radical enough and will probably not raise a huge amount of money. We remain unclear about how any extra money will be shared out among local councils. Council tax is a regressive system and, at the very least, we need a complete revaluation. However, my preference is for a tax that is more progressive and closely linked to the actual value of peoples’ homes. Some property prices have increased more than others since 1991, and it remains my strong belief that poorer areas are losing out and increasingly subsidising richer areas.
The increase in housing investment is welcome. However, we are still facing a housing emergency, and I wonder whether some other capital expenditure should be trimmed back.
I was glad to see an increase in college funding, which was mentioned earlier. For once, I agreed with most of Douglas Ross’s comments, which were fair. There is a question about whether the increase will really be £70 million compared with the 2025-26 budget or whether there will be an increase of only £40 million. I note the cabinet secretary’s point that the core budget will increase by £70 million. However, the total budget that will go to colleges will increase by only £40 million, which is a bit unfair.