Programme for Government: Big promises, missing price tag

This analysis includes contributions from Tax Justice Scotland Steering Group members Future Economy Scotland, The Health and Social Care Alliance Scotland, Wellbeing Economy Alliance Scotland and Oxfam Scotland.

The Programme for Government was big on promises: reforming public services, strengthening communities and tackling the challenges Scotland faces. But one big question was left hanging: where will the money come from?

While Scottish Ministers set out a long list of ambitions and public sector reform, there was little sign of a serious plan to raise the money needed to deliver them. Across the Tax Justice Scotland network, there is growing concern that without action to make the tax system fairer, especially by asking those with the most wealth to contribute more, many of these commitments risk remaining aspirations rather than delivering the change needed. The question is not whether Scotland can afford to invest in its future, but how that investment is paid for.

The money question that won’t go away

While the Programme for Government contains welcome commitments, it leaves a fundamental question unanswered: how they will be funded. The focus on prevention, expansion of community-owned renewables, and commitment to deliver the long overdue Heat in Buildings Bill are all positive steps.

However, the elephant in the room was Scotland’s £5bn budget gap. Although it was barely mentioned, it is evidently the driver behind sweeping plans for public body mergers and workforce reductions.

While the public sector can undoubtedly become more efficient, trying to close the budget gap through cuts alone risks repeating the mistakes of austerity. While details are not yet known, merging public sector bodies will bring significant upfront costs, which could undermine efforts to close the budget gap. Health board centralisation could also undermine distinct geographical needs, which would disproportionately harm rural and island communities.

Going forward, strengthening public services while meeting increased investment needs means confronting an uncomfortable truth: tax revenue will need to rise. This year’s Budget must include meaningful tax reform, starting by replacing the unfair and outdated Council Tax.

Reform needs resources

Questions about funding are not abstract. They shape the quality and availability of the services people rely on every day. The Scottish Government’s new focus on prevention as part of public service reform is welcome, but structural reform will not deliver improvements unless accompanied by adequate resources. Social care in particular has been under extreme pressure for many years. This has resulted in cuts to provision and tightening of eligibility criteria leaving far too many people without the care and support they need to realise basic human rights including the right to health, an adequate standard of living, and participation in cultural life. 

At the same time, despite the incredible range of effective, community-based and preventative services it delivers, Scotland’s third sector is stretched beyond limit. Organisations are reporting increasing demand yet are struggling with funding that hasn’t kept pace with inflation and is subject to short notice decisions on renewal or withdrawal. Fair funding for the third sector is a vital part of delivering on the government’s reform and prevention agendas. It is therefore crucial that the Scottish Government consider how best to use its tax powers to raise the revenues necessary to fund essential public services.

But raising revenue is only part of the challenge. The same preventative thinking being applied to public services should also shape the wider economy.

Build an economy that stops harm before it starts

The Programme for Government promises to put prevention at the heart of public services, but the Scottish Government cannot prevent harm while its economic policies continue to create it. Poverty, insecure work, unaffordable housing and climate breakdown are the products of economic choices, not just social problems for services to mop up afterwards. A genuinely preventative government has to apply that same preventative logic to economic policy itself.

That requires investment and a clearer sense of what the economy is for. Fairer taxation, including asking those with the greatest wealth to contribute more, can help fund the services and infrastructure on which a wellbeing economy depends. Ministers must align economic and tax policy with Scotland’s wider social and environmental goals, so that economic success is measured by whether it delivers good lives for all within planetary boundaries.

That will require difficult choices, including on taxation.

Taxing wealth is part of the answer

Scottish Ministers are keen to talk about reform, but far less eager to talk about one of the biggest tools available to help pay for it.

Take Council Tax. While plans for a new Council Tax Bill are welcome, they stop short of the wholesale reform needed to turn Council Tax into a fairer tax on property wealth. Ministers should seize this chance to make sure owners of the most valuable homes pay their fair share.

But fairer taxation of wealth should not stop at the front door. The commitment to set the rate of tax for ultra wealthy private jet passengers in the upcoming Scottish Budget is welcome, but the real question is whether Ministers will set it high enough to have an impact. A private jet tax set sky high could raise hundreds of millions for climate action by making ultra wealthy polluters contribute more. 

Promises are easy. Paying for them is harder. That’s why using devolved levers to tax wealth more fairly matters. 

The choices ahead

This Programme for Government sets out an ambitious destination. But ambition needs investment. From wealth taxes to community wealth building, Scotland has choices available. The challenge now is having the political courage to use them.