The UK Government has announced that it has increased the amount that the Scottish Government can borrow, as it looks to fund vital public services.
Through the approval of the Scotland Act Order, Scottish borrowing powers are to increase in line with inflation, meaning that more investment can be put into schools, hospitals, and the infrastructure that is central to growth. This move will see the resource borrowing limit increase from £1.75 billion to £1.78 billion, and the increase of the capital borrowing limit from £3 billion to £3.05 billion.
John Lamont, the UK Government’s Minister for Scotland, commented:
“We have listened to calls from the Scottish Government for greater certainty and flexibility to help them manage their budget. This is a great example of devolution in action and how we can deliver for people of Scotland when our two governments work together.
“The wider Fiscal Framework deal - worth billions of pounds to Scotland over the coming years - builds upon work to support economic growth and provide more high-skill jobs, investment and future opportunities for local people, such as through Investment Zones and Freeports in Scotland.
“The UK Government has made great strides in growing the economy and by halving inflation sooner than forecast. With our direct investment in Scotland now standing at more than £3billion, we are creating opportunities right across the UK.”
As part of the new Fiscal Framework agreement, the limit of annual resource borrowing has been doubled from £300 million to £600 million, as well as the removal of limits on how much of Scotland’s reserve can be withdrawn for future spending.
Alongside the move to boost Scottish spending, the tax funding arrangements that see the Scottish Government keeping every penny of devolved taxes is also to continue whilst receiving the additional contribution from the rest of the UK.
Image credit: iStock
