Kate Forbes

The deal will see the phased introduction of free school meals for all primary pupils, an enhanced public sector pay deal, new Pandemic Support Payments and additional funding to support environmental, active travel and energy efficiency initiatives.

Talks are continuing ahead of tomorrow’s Stage 3 debate with the Scottish Liberal Democrats, who voted for the budget at Stage 1 in exchange for increased spending on mental health, business support and education recovery.

The new commitments build on the budget’s existing measures to address the challenges of the ongoing pandemic and lay the foundations for recovery. These include meeting the main ask of business by extending 100% rates relief for the retail, hospitality, leisure, aviation and newspaper sectors for a further 12 months – considerably exceeding the relief offered in England - supporting families by allocating money for a council tax freeze and providing record £16 billion to the NHS.

The new initiatives will be funded mainly from the unallocated balance of funding from last week’s UK budget.

They include:

• Pandemic Support Payments of £130 to households receiving Council Tax Reduction and two payments of £100 to families of children qualifying for free school meals
• The phased introduction of free school meals to all primary school children by August 2022
• An £800 pay rise for public sector workers earning up to £25,000, and a 2% increase for those earning over £25,000 up to £40,000.
• Extending free bus travel to under 22s
• £40 million to support the green recovery, including a further £15 million for active travel, £10 million for energy efficiency, £10 million for biodiversity and £5 million for agri-environmental measures

Ms Forbes said: “We continue to face unprecedented challenges and I have sought to engage constructively to deliver a budget that meets the needs of the nation.

“I would like to thank all parties for the positive way they have participated in this process. The budget addresses key issues raised by every party and I hope all MSPs feel able to support it. We have reached an agreement with the Scottish Greens and I am hopeful about the outcome of my continuing talks with the Liberal Democrats.

“Today I can announce that we are able to go further in offering a fair and affordable pay settlement to the public sector workers to whom we owe so much through the pandemic, particularly the lowest paid.

“The budget already contains measures to help struggling families, but in this deal we are also announcing details of a £100 million programme of one-off Pandemic Support Payments. And we commit to providing free school meals to every primary school pupil by August 2022, with expansion for P4s starting after this year’s summer holidays.”

She added: “A green recovery lies at the heart of the Scottish Government’s policies and today we are delivering significant new investments in energy efficiency and active travel, while providing additional funding to support biodiversity and make our agriculture more environmentally-friendly.

“And, as we rebuild from Covid, we will support our young people by extending our original commitment to concessionary travel for all under 19s to include everyone up to age 22, giving all 18-21-year-olds free bus travel.

“Every penny made available to us to tackle the pandemic has been allocated. These remain difficult times, but this budget puts us on the path to a fairer, greener and more prosperous Scotland.”

David Lonsdale, director of the Scottish Retail Consortium, commented:  “Whilst retail and the economy remain within the long shadow of Covid businesses will continue to crave certainty. In that context, reports of an accord having been reached on the Scottish Budget are encouraging, albeit we await the detail.

“There is much within the Scottish Budget unveiled last month which retailers can support. The extension to business rates relief and the support for consumer spending – through the protection of ordinary taxpayers from rises in income tax rates and rises in council tax - are very welcome.

“The business rates waiver has been a lifeline for the retail industry, much of which has had to cease trading three times so far during the pandemic whilst at the same time investing significantly in Covid safety measures. Scrapping business rates for the coming year provides a much-needed cashflow and confidence boost for the industry – Scotland’s largest private sector employer - as it hopefully emerges from lockdown and seeks to recover.”

He added: “Much of Scotland’s retail industry remains deep in it’s biggest crisis this century. Large swathes of shops are currently closed for a third time in less than a year. Even when the current restrictions end more support will almost certainly be needed.

“Reopening alone will not be a silver bullet to save shops, who will not be able to trade at capacity due to physical distancing and caps on the number of customers in stores. With questions remaining over what demand will look like over the coming months, Ministers should stand ready to act to stimulate consumer spending and economic transactions, perhaps through.”