John Swinney has set out what he describes as a "Scottish alternative" to austerity cuts imposed by Westminster in one of the most important Holyrood budgets since devolution.
The deputy First Minister and finance secretary made key announcements over childcare, taxation, health funding and housing at Holyrood as he set out spending plans for 2016/17.
Introducing his budget, he attacked "ideological" cuts imposed by the UK Government, saying that by 2020 the Scottish budget will be 12.5 per cent lower in real terms than when the Conservatives came to power.
Read more: Magnus Gardham's analysis
He said: "Scotland can accept these Tory cuts or we can rise to the challenge and choose a Scottish alternative to austerity. We choose to rise to the challenge. We choose the Scottish alternative."
It was announced that more than half a billion pounds would be used to boost the total health budget, translating to a rise of 6.5 per cent, with £250m to be diverted into social care which Mr Swinney said amounted to a "fundamental realignment" of NHS resources.
The move, described as "the most significant reform of health and social care since the creation of the NHS", would see more care delivered in the community and help lead to a reduction in delayed discharges, the deputy First Minister said.
Read more: So what is SRIT?
He made a commitment that the SNP was committed to real terms increases in the health budget not just next year, but for the duration of the next Parliament if his party is reelected in May.
However, councils emerged as a major loser of the budget, with local authority representatives Cosla warning that a £350 million reduction meant the package of measures was "totally unacceptable."
Speaking following a special Council Leaders meeting in Edinburgh today COSLA President Councillor David O’Neill said:
“This is a budget that hits the council workforce in terms of job losses, it hits the child in care, it hits the elderly struggling with dementia and the vulnerable adults, all of whom solely rely on the support that only a council can provide.
“Make no mistake this is a budget that has been made in Scotland and imposed on Scottish Local Government. The 3.5 per cent cut coming to us next year cannot be laid at Westminster’s door this time around as we all know that the Scottish Government got a cash increase."
Mr Swinney confirmed that the Scottish rate of income tax (SRIT) would be 10p in the pound, meaning tax rates will remain the same north of the border. He said that the powers, available for the first time in this year's budget, only allowed changes to be applied equally across bands, meaning any increases would have a disproportionate impact on the worse off.
It is expected that full control of rates and bands will be exercised by Holyrood by 2018, following the recommendations of the Smith Commission.
Read more: What this budget means for health
Plans for a reformed system of local taxation, following a report of a cross-party commission unveiled this week, would be announced early in the New Year, Mr Swinney said.
In the meantime, council tax bills will be frozen next year. The policy had saved average families £1,500 over the years, with the finance secretary saying the Government was "helping families week in, week out, the length and breadth of Scotland."
Read more: What this budget means for roads
Meanwhile, proposals were announced to almost double free nursery provision during next parliament, to 1140 hours. The affordable housing budget will rise by £90m, to £690m, to boost housing supply. Mr Swinney said the move was the "first step" in a target of building 50,000 new affordable homes in the next parliament, with the SNP saying it is on course to hit its target of 30,000 in the current parliament.
Read more: What this budget means for education
New measures were announced to increase taxes on buy-to-let landlords and those purchasing a second home. A supplement on Land and Buildings Transaction Tax of 3 per cent of the total purchase price was announced for relevant transactions above £40,000.
Mr Swinney said: "Our objective is to make sure that first time buyers have the greatest possible chance to enter the housing market.
Read more: What this budget means for jobs
"We are therefore taking action to avoid the likely distortions which will arise in Scotland from the new UK SDLT surcharge on the purchase of additional properties – including buy-to-let and second homes – which could make it more attractive to invest in such properties in Scotland compared to other parts of the UK.
"Our LBTT additional homes supplement therefore seeks to ensure that the opportunities for first time buyers to enter the housing market in Scotland remain as strong as they possibly can. The proposed additional levy of three percentage points on transactions over £40,000 is proportionate and fair."
Read more: What this budget means for arts and culture
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