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Scottish Budget 2018

Against the backdrop of uncertainty caused by the UK’s impending exit from the European Union, Finance Secretary Derek Mackay MSP has delivered the 2018 Scottish Budget (December 12th).

Describing it as a “fair and progressive budget” Derek Mackay presented a business-friendly package, while placing the protection of public services at the heart of this Budget Statement.

Below you can find a breakdown of key Scottish Budget 2018 figures in addition to which public sector opportunities await your industry.

SME

A £50 million ‘Town Centre Fund’ will provide much needed support for Scotland’s high streets. There will also be a cap put on business rates below inflation, providing a tax cut for small businesses, which Mackay described as “the most generous system anywhere in the UK”. The partnership between the private sector and the Scottish Government has played an important role in recent years, which was championed by the Cabinet Minister for Business, Fair Work and Skills Jamie Hepburn MSP at Procurex Scotland, in which he encouraged businesses to consider the welfare of local communities and the environment, calling on suppliers to “not be risk averse”.

Housing

An investment of £825 million -as part of an overall fund of £3 billion- will help deliver 50,000 affordable homes over the course of this parliament, which has been the cornerstone of Housing Minister Kevin Stewart’s construction agenda.

Education

Describing education as the Scottish Government’s “defining mission”, the Finance Secretary set out bold new proposals for Scottish schools. £180m will be used to close the attainment gap, including £120m, which will be directed towards headteacher budgets through ‘Pupil Equity Funding’. £600m will also be given to colleges and £1 billion has been secured for Scotland’s world-class universities. £214m has been set aside for apprenticeships and skills; providing a gateway in to employment for many of Scotland’s young people.

Healthcare

An increase of £730m will be provided to NHS Scotland, which is the equivalent to hiring 19,000 nurses, as Derek Mackay confirmed “health is a top priority for the government”, which accounts for almost half of the Scottish Government’s overall spending.

Local Government

The Scottish Government will provide “a real terms increase in the total local government settlement of over £210m” Mackay said, taking the local government budget to £11.1 billion. This will be welcome news for Fife Council executive director Keith Winter, who was a keynote speaker at Procurex Scotland, where he championed “social justice” as he encouraged councillors to adopt a global strategy moving forward.

Autumn Statement Procurement Top Tips

Autumn Statement

The Chancellor of the Exchequer’s recent Autumn Statement offered new routes to leveraging business growth. Here, BiP Solutions journalist Julie Shennan gives 5 top tips for procurement actions to optimise your Autumn Statement opportunities.

With £23 billion of additional government spending pledged in Chancellor of the Exchequer Philip Hammond’s recent Autumn Statement via the new National Productivity Investment Fund, fresh pipelines of work have been outlined in areas such as infrastructure, housing, transport, defence, exports, R&D, oil and gas, communications and media.

Whatever your business sector, the Autumn Statement contains information that you can leverage to cut costs and open up new business opportunities. Here are 5 top tips for post-Autumn Statement good procurement practice.

1. Browse Business Breaks

Every year the Chancellor of the Exchequer gives business financial breaks via the likes of Corporation Tax cuts and business rates relief. These breaks often come with caveats that make them applicable to some businesses but not others; however, it is worth checking if your business qualifies so you can adjust your budget.

Also worth noting is that with each business break there usually comes a time frame for its implementation or a time limit on its duration. For example, in his Autumn Statement 2016 Mr Hammond pledged to cut Corporation Tax to 17% by 2020, suggesting that it may drop incrementally over the next few years.

2. Find Funding

Likewise, the Chancellor’s Autumn Statement often announces funding opportunities for UK business growth, to stimulate things like innovation, local economies and overseas trade. This year the Chancellor pledged £400 million through the British Business Bank to invest in innovative small businesses with potential for growth.

Now that these funding opportunities have been announced, businesses that qualify and are interested should waste no time in contacting the British Business Bank to start their application. Fortune favours the brave, and awarding bodies will not knock on doors offering funding.

3. Utilise U-Turns

Just as suppliers should be diligent in checking the recent Autumn Statement for relevant new announcements, they should also check it for any U-turns on business breaks or funding pledged in previous years.

Each year brings new circumstances and challenges that can force policy U-turns, not least when there has been a change of government. Yet one supplier’s curse is often another supplier’s blessing as the scrapping of relief or funding in one area can lead to that assistance being rechanneled into another.

4. Pursue Pipelines

Arguably the most valuable business information in this year’s Autumn Statement is to be found in the new pipelines of work announced by the Chancellor. These pipelines vary from the rather open ‘£800 million to the Scottish Government for infrastructure projects’ to the more specific ‘£7.6 million for urgent and essential repairs to Wentworth Woodhouse heritage house in South Yorkshire’.

Now that the Autumn Statement has been announced, suppliers should research it for pipelines within their sectors and geographical areas of operation, bearing in mind that some sector pipelines – such as those in construction – have a trickle-down effect into others. For instance, a pipeline for building repairs might also bring security services opportunities to guard the building while the repairs are made.

After identifying a potential future pipeline of work, suppliers should then scan the procurement horizon for this work being put out to tender. This can be done by using a contracts finder service, checking national or local authority contract portals, monitoring news stories, or attending council meetings and networking events.

For best practice guidance on finding contracts, read The Ultimate Guide to Winning Government Contracts, Chapter 4.

5. Contact Contractors

Every now and then an Autumn Statement or Budget goes one step further, not only outlining new pipelines of work but also announcing the Tier 1 contractors who will be running them. For instance, in his Autumn Statement 2016 the Chancellor detailed that £850,000 would be awarded to a Royal Society of the Arts project to promote cultural education in schools. Once the Tier 1 contractor’s name is divulged then suppliers should strike up pre-tender conversations, to establish the scope of sub-contracts available.

Best practice guidance on pre-tender networking can be found in The Ultimate Guide to Winning Government Contracts, Chapter 9.

For more information on government opportunities, visit the BiP Solutions Resources page.

Autumn Statement Industry Highlights

Autumn Statement Industry Highlights

On 23 November, Chancellor of the Exchequer Philip Hammond announced the Government’s 2016 Autumn Statement, pledging £23 billion of additional spending via the new National Productivity Investment Fund (NPIF).

Among the sectors receiving fresh investment are infrastructure, housing, transport, exports, defence and security, R&D, oil and gas, communications, culture and media.

Read on to discover what public sector pipelines of work await your industry sector.

Infrastructure

  • National Productivity Investment Fund (NPIF) to provide £23 billion of additional spending, ensuring the UK’s economy is fit for the future.
  • National Productivity Investment Fund will provide major additional spending in areas that are key to boosting productivity: transport, digital communications, research and development (R&D), and housing.
  • An increase of over £800 million to the Scottish Government for infrastructure projects.
  • An increase of over £400 million to the Welsh Government for infrastructure projects.
  • An increase of over £250 million to the Northern Ireland Executive for infrastructure projects.

Housing

  • £2.3 billion for a new Housing Infrastructure Fund for projects such as roads and water connections that will support the construction of up to 100,000 new homes in the areas where they are needed most.
  • £1.4 billion to provide 40,000 new affordable homes, including some for shared ownership and some for affordable rent.
  • £1.7 billion to speed up the construction of new homes on public sector land.

Transport

As part of the National Productivity Investment Fund, transport infrastructure will include:

  • £1.1 billion to reduce congestion and upgrade local roads and public transport
  • £220 million to tackle road safety and congestion on Highways England roads
  • £27 million to develop an expressway connecting Oxford and Cambridge
  • £450 million will also be spent on trialling railway digital signalling technology which will expand capacity and improve reliability

£390 million investment in future transport technology including driverless cars, renewable fuels and energy efficient transport. This will include:

  • £100 million investment in testing infrastructure for driverless cars
  • £150 million to provide at least 550 new electric and hydrogen buses and to support taxis to become zero emission
  • £80 million to install more charge-points for ultra-low emission vehicles
  • A two-year 100% first year allowance for companies who install electric charge-points, coming into effect immediately‎. This allows companies to deduct the cost of the charge-point from their pre-tax profits in that year

Exports

  • Doubling UK Export Finance capacity.

Defence & Security

  • Protecting the defence budget (no reduction in Budget 2016 pledge).
  • Protecting the overseas aid budget (no reduction in Budget 2016 pledge).
  • Over £102 million of LIBOR banking fines to support Armed Forces and Emergency Services charities and other related good causes: over the next 4 years support will go to more than 100 projects supporting Armed Forces personnel, their families and veterans; Emergency Service personnel; children’s hospitals, air ambulances and emergency responders; and museums and memorials.

Research & Development

  • £2 billion more per year in research and development (R&D) funding by 2020-21.
  • Increase in R&D funding for universities and businesses with R&D for areas like robotics, artificial intelligence and industrial biotechnology.

Oil & Gas

  • Carbon Price Support capped until 2020.
  • Business rates reduction package worth £6.7 billion.

Communications

  • £1 billion to invest in full-fibre broadband and trialling 5G networks.
  • Investment to support the private sector to roll out more full-fibre broadband by 2020-21.
  • Funding will also support trials of 5G mobile communications.
  • From April 2017, the Government will also provide a new 100% business rates relief for new full-fibre infrastructure for a 5-year period.

Culture

  • Over £10 million to support culture and heritage projects across the UK:
  • £7.6 million will cover urgent and essential repairs to Wentworth Woodhouse heritage house in South Yorkshire
  • £850,000 for a Royal Society of the Arts pilot to promote cultural education in schools
  • £1.6 million to help complete Studio 144, an arts complex in Southampton, including an auditorium, studio, and gallery
  • £1 million towards the development of a new creative media centre in Plymouth
  • New museums and galleries tax relief will be expanded to include permanent exhibitions, set at 20% for non-touring exhibitions and 25% for touring exhibitions. The relief will be capped at £500,000 of qualifying expenditure per exhibition.

For more information on government spending plans, keep reading the BiP Solutions blog.

£4bn boost for Scottish infrastructure

Scottishinfra

The Scottish Government’s 2016-17 Draft Budget has pledged around £4 billion infrastructure investment over the next year. This investment will be spent on house building, transport and digital links, among other projects. Here, BiP journalist Julie Shennan talks with DTL Chief Executive of UK Training Chris Wood about the opportunities and challenges this could bring.

The 2016-17 Draft Budget has pledged:

  • £1 billion investment in roads and transport projects, including the electrification of the Edinburgh-Glasgow rail line and continuing work on the Aberdeen Western Peripheral Route.
  • Around £690 million investment in housing supply including an increase of around £90 million in affordable housing supply year on year – the first step in the Scottish Government’s commitment to provide 50,000 new affordable homes by 2020-21
  • Further investment in total of more than £130 million for Scotland’s digital strategy, to give 95 per cent of premises in Scotland access to next generation broadband by 2017 and enhance mobile coverage.
  • Completion of the Queensferry Crossing.

These infrastructure plans remain to be confirmed in the Scottish Government Spending Review, later in the year. This publication has been delayed by the late release of the UK Spending Review, which was published on 27 Nov 2015.

Scottish Ministers continue to discuss the fiscal framework that will underpin future Scottish Block Grants from the UK as part of the Scotland Bill. Any agreement will have a material impact on the powers and resources available to Scotland.

Scottish Infrastructure Secretary Keith Brown said: “This is a Budget to improve infrastructure and increase house building by a total of some £4 billion, and as such it as a Budget to invest in protect and extend our economic recovery.

“We have long placed considerable emphasis on public sector investment in infrastructure to stimulate economic recovery and that is what has driven much of the post-recession growth in Scotland. This Budget supports that continued growth through improving infrastructure and investing in housing to ensure all Scots can benefit from these opportunities.”

The Scottish Draft Budget infrastructure pledge comes as good news to Scottish-based training specialist DTL, whose customers include major construction, energy and water companies.

DTL Chief Executive, Chris Wood said: “Such pledges of investment are always welcome.

“For Scotland, in particular, these are essential to help the country thrive in an ever more competitive global environment.”

But Mr Wood said the pledge would need to be backed with investment in industrial training.

He said: “Not only should pledges be turned into actions, but greater consideration should also be made as to how infrastructure improvements will actually be delivered.

“There remains a significant skills gap across Scotland and the wider UK. So it would be even more reassuring to see the Scottish Government make similar pledges to help businesses provide appropriate training, apprenticeships and the skills necessary to deliver these ambitious projects on time and to a high standard.”

For more public sector spend news, continue to follow the BiP Solutions blog…