RICS reaction to the Scottish Budget 2024-2025

On Tuesday, the Scottish Government published its draft budget for 2024-2025. At the heart of the budget, where announcements of a £6.3 billion investment in social security and more than £19.5 billion for health and social care. However, there were also sharp cuts to investment in many areas, including housing, universities, and transport, as well as wholescale changes to income tax thresholds, creating a new sixth band in order to plug a £1.5 billion funding gap.

Key announcements in the built environment space, include:

Residential

• Housing & Building Standards funding will be cut from £738.3m in 2023-2024 to £533.2m in 2024-2025.
• £556 million is being invested in the Affordable Housing Supply Programme.

Planning and Development

• Planning funding will reduce from £11.7m in 2023-2024 to £6.6m in 2024-2025.
• A consultation paper, setting out options to accelerate planning and planning fees will be published in early 2024.

Building Standards

• Cladding Remediation funding will increase by £12m to £41.3m in 2024-25.
• Scottish Government will work with partners across the public sector to understand the extent of RAAC in buildings and consider how to address risks associated with it.

Non-domestic rates

• There will be no rates relief for mainland hospitality businesses, but there will be a 100 per cent relief in 2024-25 for hospitality businesses located on islands as defined by the Islands (Scotland) Act 2018, capped at £110,000 per business.
• Consideration for the reintroduction of a non-domestic rates Public Health Supplement for large retailers

Land & Rural

• Consideration of a proposal for a Carbon Emissions Land Tax.
• Exploring an Infrastructure Levy, to be implemented by spring 2026.

Sustainability

• £49 million will be invested to make progress in Scotland’s transition to a circular economy.
  

Responding to the budget, Robert Toomey, RICS Senior Public Affairs Officer, Scotland commented:

“The Scottish Government’s draft budget announcement yesterday, highlights the difficulties it faces in 2024-2025.

While there is much to be lauded, from increases to health and social care spending and a freeze on council tax rises, which should help struggling families across the country; the required cuts have drastically impacted other areas and perhaps none more so than the built environment in Scotland.

A reduction of over £200m in allocated funding to Housing & Building Standards funding will inevitably negatively affect projects and sentiment across Scotland. A challenge, particularly when rental costs are soaring, a number of local authorities are declaring housing emergencies and new home starts fall by 24% to reach lowest level since 2014.

While tough decisions from Scottish Government are required, drastic cuts to built environment funding, unfortunately create an uncertainty for communities and industry at a time when confidence and clarity are required.”

For more information or to get involved in RICS’ policy work, contact Senior Public Affairs Officer, Robbie Toomey at rtoomey@rics.org