The Scottish Government is “firefighting” through considerable financial challenges as it battles the cost-of-living crisis and the demand for improved pay deals, the Finance and Public Administration Committee has stated.
Its report on Deputy First Minister John Swinney's 2023/24 budget in December urged ministers to focus on striking the right balance between responding to the immediate financial pressures of high inflation and the cost crisis and addressing longer-term fiscal concerns.
The committee also called for clarity on how the Scottish Government will deliver public service reform and from where in the public sector it intends to make reductions in headcount to pre-pandemic levels.
Ministers set out objectives to reducing the size of the public sector workforce back to pre-pandemic levels by 2026/27 – it would equal a cut of about 7.3% over the four years, or 1.9% per year, according to the Institute for Fiscal Studies.
Kenneth Gibson, committee convener, said: “The Scottish Government’s focus on addressing the cost-of-living impact is understandable given the scale and immediacy of the challenge.
“The committee also acknowledges the difficulties arising from soaring inflation this year and the knock-on implications for public sector pay and public spending overall.
“However, we would like to see evidence that the Government is suitably focused on striking the right balance between responding to the immediate financial pressures and addressing long-term fiscal challenges.
“On the basis of evidence we’ve heard, the committee wants to see more strategic long-term financial planning from the Scottish Government to ensure future fiscal sustainability.“
He added: “We also ask in our report, from where in the public sector reductions in headcount to pre-pandemic levels will be made, and to what timescales.
“Clarity and transparency around these issues are crucial, during what is an uncertain time for the public sector – it is clear from our scrutiny of the Scottish budget 2023/24 that the Scottish Government is firefighting on a number of fronts.”
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