22 December 2016
Budgets, communities and the Church
Last week marked a significant moment in the ongoing story of Scottish devolution as the Scottish government presented its budget to parliament, thanks to significant new devolved powers.1
This is the first time the Scottish government finance secretary has used the significant new taxation powers, primarily in the area of income tax. Collectively these powers now mean that 50 per cent of Scottish government revenues are directly raised by the Scottish Parliament – the other 50 per cent being raised by UK taxation, including Scotland's share in this, and then allocated by the UK government.
There was therefore great interest in how the Scottish government would use the new responsibilities at its disposal, as well as in its wider budget plans.
The headline figures on the budget and taxation were widely expected. Income tax rates were frozen and therefore kept in line with the rest of the UK. The exception to this is the threshold for the middle tax band where the increase will be less than the rest of the UK, meaning taxpayers in this group will pay £314 more per year than their counterparts outside Scotland.
On council tax, which is already devolved, the top four bands will pay increased rates and the previous council tax freeze will be lifted enabling councils to increase overall council tax by 3 per cent. However this increase is likely to be needed to close funding gaps due to lower local government grants from central government.
Reaction to the budget has been predictably mixed. For the Conservatives the budget has gone too far with the tax changes, while for the Labour, Greens and the Lib Dems it has not gone far enough on reform of either income tax or council tax.
Criticism has come from all sides on the lack of distinct action using the new tax powers, with cynics pointing out the change of approach from the SNP from 2015 Westminster election, when they campaigned for a 50p top rate, to the 2016 Scottish election when they decided not to pursue this policy.
These political debates matter because once again, with a minority administration, parties in Holyrood will need to find consensus to enable the budget to pass.
The other key area of contention has been the settlement for local government services with the Scottish government claiming an increase in funding and other parties claiming a significant decrease.
According to independent analysis, both can be true with ring-fenced funding for areas like education attainment increasing, but local government funding being cut.
According to this analysis the Scottish government figures also rely on councils increasing council tax by the full amount and some dubious double counting in the area of health and social care.2
What is absolutely clear though is that local communities will face significant challenges as existing local authority services are squeezed. Even in areas of increased funding, such as tackling educational attainment, there is still a real challenge of ensuring that this money makes a difference to the outcomes of those children and families who need it most.
It is into these areas that the Church has a significant role to play. Already churches supply significant resource in communities across Scotland, providing volunteers (and income) to foodbanks, night shelters, refugee support, youth services and schools.
The Church is already stepping in the gap outworking the transformational gospel in words and in deeds. But there is so much more. We are ideally placed to be the community with the community who can reach those most in need, even more so than the state, and in the coming years we will be able to significantly have impact on areas that are some of government's most pressing challenges. Through the Evangelical Alliance and the Serve Scotland network we have the opportunity to work together to channel this work in the most effective ways.
Last week's Alliance survey publication showed that evangelicals give significantly at Christmas, and we know this is case throughout the year in both time and money.3 As we approach Christmas and the budget challenges that the 2017 will bring it's time to pray afresh, and consider how best to engage in the transformational work God has called us to in our local communities.
1 For our thoughts on these new powers see What Kind of Holyrood?
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