BEFS overview: Scottish Government Budget 2023-2024

BEFS Director provides a brief overview of the Scottish Government draft Budget 2023-2024.

The Scottish Government published its draft Budget 2023-2024 on 15th December 2022 with details across all portfolios, including that of Historic Environment Scotland within Constitution, External Affairs and Culture.

We are living in, what were referred to by the Deputy First Minister as, “the most turbulent economic and financial context most people can remember”. Within the extensive scene-setting during the statement given to the Scottish Parliament, the mood music was undeniably dark. Challenging times and difficult decisions were the watchwords of the day, and perhaps coming years.

This overview highlights a few headline figures which may be of interest across the breadth of the existing built environment but we suggest that all those with a detailed interest explore the document in full before drawing any more definitive conclusions.

Historic Environment Scotland (HES): the budget repeats the description from last year in relation to the contribution our historic environment plays in relation to Net Zero.  “We will continue to promote access to our historic environment, and high-quality places and buildings to support communities contributing principally to the culture, and also Net Zero, national outcomes.”  (p102)

The total operational cost forecast for HES in 2023-24 is £114.5 million, an increase of just over 18% on the previous year’s budget. The budget as stated, suggests an income generation of £50.8M. Based on the evidence below, and with continued uncertainty around cost-of-living impacts on visitor numbers, rising costs, and ongoing limitations on some international travellers – this may seem optimistic, rather than realistic.

The two HES Annual reports covering times impacted by covid are as follows: the Annual Report for 2020-2021 states their commercial income was £ 8.2M (p7) – an 87% reduction on 2019-2020; and in the Annual Report for 2021-2022 income is listed as £22.3M (almost £20M short of the expectations set within the Scottish Budget in 2022-23, as can be seen above), and still 67% down on 2019-2020.  The continued drop in income, and the implications on the wider HES budget, continues to be a concern.

Last year there was a significant increase in Government funding to HES (up around 25% on 2021-2022 – from £55.9M to £70.1M), this year the increase is a more modest 3.8% overall.

Level 4 data spreadsheets details HES Capital as, “Investment towards restoring, enhancing and conserving our HES Properties in Care and associated visitor facing facilities across Scotland. Capital funding for corporate infrastructure.” With the uplift specifically to “support an increase in essential maintenance.” With a significant amount of political, and public, attention on the Properties in Care which remain closed, as well as those undergoing high-level masonry inspections and works, it can be assumed that any additional resource for these sites may be viewed positively.

Unlike last year when no mention to the HES grants was made, the increase in running costs for 2023-2034 is detailed as follows, “Increased funding for public sector pay and other rising costs, further investment in the estate, and grants to the heritage sector.” This is a welcome direct reference to the grants provided to the sector via HES. The importance of these grants across the sector cannot be emphasised enough; with HES one of the few funders able to fund both organisations as well as building fabric. Sector stability, and the community impact of organisations and projects working with Scottish Government funding, through HES’ dispersal of these grants, positively impacts our people, and our places, across the breadth of Scotland.

However, the modest increases for HES sit within a wider portfolio facing at best economic stasis (and real-terms cuts), and at worst a raft of significant budget reductions – from Creative Scotland, across Cultural Collections, to the National Records of Scotland. These cuts come in the context of the Government response to the Constitution, Europe, External Affairs and Culture Committee scrutiny, “the Budget maintains funding for the culture sector into 2023-24. The Government will consider setting multi-year planning figures for cultural organisations within the increased fiscal challenges presented by the UK Government’s Autumn Statement.” (p29)

The statement above that this budget “maintains funding for the cultural sector into 2023-2024” will be seen by many as stretching reality to breaking point. A significant uplift within the portfolio for Migration Services, and some Major Events in the coming year (sporting), as well as HES’ increase are the only potential positives in a portfolio which ultimately sees an overall reduction of more than 6%. (Sitting within the Finance & Economy portfolio we note that Tourism spending plans reduce slightly; perhaps reflecting both the level of current uncertainty, and the need for uplift in other areas.)

For additional comment in relation to cultural spend, please see the initial statement from Culture Counts. Creative Scotland produced the following statement on 19th December, detailing what steps and impacts their budget cut will have on their funding in the coming year. And, this response from the Scottish Tourism Alliance was also recently released. For comment on the wider third sector impacts, please see SCVO’s budget briefing. Further draft budget figures across culture and the built environment have been compiled in a table below.

The Planning Budget’s decrease on 2022-2023 figures seems exceptionally disappointing in the face of the continued and sustained activity in this area, particularly the forthcoming delivery of the National Planning Framework 4. This decrease can be meaningly put within the context given by RTPI Scotland’s research briefing, Resourcing the Planning Service (updated December 2022).

A significant increase in the Registers of Scotland budget is positive, but all uplift appears to be Capital specific to the Moveable Transactions Bill and developing the two registers that underpin that work. This does not suggest that further (necessary) development of access to building data (such as through ScotLIS) will progress in the timeframes many of us would advocate. Without access to data about our existing housing stock, delivering net zero will be an almost impossible task.

The continued increase in Cities & Investment Strategy is a positive sign if applied meaningfully across Scotland’s places. An increase is also seen in this budget for City Region and Growth Deals in Local Authority budgets, rising from £7.2M last year to £12.7M for the coming year. These increases may be balanced by a substantial reduction in the Regeneration Budget from £96.4M for 2022 to £59.2M, the description provided of “Reduction due to changing spend profiles of programmes/projects” sounds euphemistic at best.

An area not previously examined within BEFS brief budget analysis statements has been the position of the Scottish Funding Council and the Skills & Training budgets. Attention has been focused here recently, not just due to the needs in relation to skills necessary to maintain our existing buildings (and make them stronger contributors to net-zero); but also from the ‘culture wars’ in England putting pressure on courses (of all kinds) which are not perceived to be as beneficial in terms of either their cost/entry numbers, or graduate employment prospects (often judged by salary). Both budget lines don’t necessarily paint a positive picture. Scottish Funding Council receives only a 2% increase and the total Skills & Training budget reduces by 3.6%, with Skills Development Scotland (within that total) facing a 4.3% cut.

Within the Local Government Funding outwith Core Settlement (p52) we can see that the Home Energy Efficiency Programmes for Scotland (HEEPS) remained static. However, the Vacant & Derelict Land programme doubles to £10M. Further thinking around Local Government funding has been produced by COSLA who have produced both a statement and, a #BudgetReality document demonstrating the real world cuts they see within the Scottish Government budget. Funding within the Local Authority budget impacts a wide range of built environment areas, from educational visits and school subjects taught, to maintenance of local authority properties, and everything in between.

This budget “takes further steps to address the deep inequalities in our society as we seek to eradicate child poverty in Scotland. It delivers on the need to create a wellbeing economy and a just transition to Net Zero, creating wealth and opportunity across the country. And it provides the impetus to reforms necessary to ensure that our first?class public services remain sustainable in the face of the challenges to come.” (p.3) All worthy aims, particularly within fiscally constrained times. When considering net-zero specifically, the Climate Action & Just Transition fund sees another substantial increase rising from £49.1M last year, to £79.5M.

However, with so many competing pressures, and so much uncertainty around cost-of-living, energy prices, inflation, and the continuing war in Ukraine, how the implications of these budget decisions will also enable communities and our existing places to flourish, as well as enable the rich cultural lives and experiences which are often touted as being integral to life within Scotland, and an attraction to Scotland, will remain to be seen.

2019-2020 Budget 2020-2021 Budget 2021-2022 Budget 2022-2023 Budget 2023-2024 Budget
£m £m £m £m £m
Architecture and Place 1.4 1.4 1.5 1.5 1.5
Building Standards 0.9 2 16.7 11.8 31.3
Planning 6.5 8.3 11.5 13.7 12.3
Planning and Environmental Appeals 0.7 0.7 0.7 0.6 0.6
More Homes 788.7 896.1 748.1 744.3 567.5
Registers of Scotland 12.4 11.2 8.5 10.4
Fuel Poverty/Energy Efficiency 119.6 135.2 187.7 194.3 231.1
Cities & Investment Strategy 205.6 209.8 233.2 263.2
Regeneration 42.3 47.4 111.6 96.4 59.2
Vacant and Derelict Land Grant 11.4 7.6 7.6 7.6 7.6
Creative Scotland and Other Arts 66 67.3 63.2 69.3 64.2
Cultural Collections 74.6 79.2 75.7 90 87.9
Major Events and Themed Years 16.8 6.6 8.2 18.2 24.2
Culture and Major Events Staffing 4.3 4.4 4.7 5.1 5.0
National Performing Companies 22.9 22.9 22.9 22.9 22.9
National Parks 13.4 13.9 17.5 18.5 20.9
Natural Resources, Peatland (and Flooding not 2023) 4.6 29.7 44.1 56.4 60.7
Scottish Environmental Protection Agency 34.4 37.1 43.5 41.4 49.0
NatureScot 46.5 49.1 50.2 49.6 61.1
Zero Waste 20.5 16.5 40.2 43.4 47.4
Land Reform 15.6 15 14.9 12.3 13.9
Tourism 50.6 65.1 51.2 49.4
Climate Acton & Just Transition 28.7 29.8 49.1 79.5
Scottish Land Commission  1.5 1.5 1.5 1.6 1.5
City Region and Growth Deals 3.8 11.2 7.2 12.7
Clyde Gateway Urban Regeneration Company 0.5 0.5 0.5 0.5
Capital Land and Works 22 22 18.9 15.0
City Region and Growth Deals 201 198.1 226 191.3
Home Energy Efficiency Programmes for Scotland (HEEPS) 55 58 64 64.0
Regeneration Capital Grant Fund 25 25 25 25.0
Vacant and Derelict Land Investment Programme 5 5 10.0
Place Based Investment Programme (was Place, Town Centres and 20 Minute Neighbourhoods) 23 33 23.0

Wider financial analysis prior to the Budget being released was produced by the Fraser of Allander Institute.