SCOTLAND’s Finance Secretary Shona Robison has announced the Scottish Government will be making £500 million of spending cuts in a bid to fill a budget black hole.
After warning the UK is facing a "whole new era of austerity", Robison made a statement to MSPs at Holyrood this afternoon laying out in detail the severe fiscal challenges the Scottish Government is grappling with.
Outlining the levels of savings, Robison said £188m will be found across Government, including by cutting "sustainable and active" travel funding, £65m by re-purposing cash from other projects and around £60m through already announced spending controls.
Up to £460m from the ScotWind leasing round will also be used, Robison said, in the hopes it won’t all required to be spent.
Robison added she would be extending a recruitment freeze across public bodies for all but the most essential roles.
Robison told the chamber: “Prolonged Westminster austerity, the economic damage of Brexit, a global pandemic, the war in Ukraine, and the cost of living crisis have all placed enormous and growing pressure on the public finances.
"The Prime Minster confirmed that the forthcoming UK Budget will be “painful” as they seek to address the fiscal position. While it is welcome that the new UK Government has accepted the diagnosis that we have given for years on the UK’s public finances, their solution is sadly looking like an extension of the folly of austerity."
She went on: "Were Scotland an independent country, we would not be paying the price for bad decisions taken at Westminster - whether that be years of austerity cuts, Brexit, or reckless mini budgets - all of which have taken money out of the economy and funding for public services.
"However, Presiding Officer, within the current devolution settlement the fact remains that our main lever to remove these pressures in-year is to reduce spending to achieve balance."
A number of measures had already been announced prior to the statement, with the Government redirecting money from a nature fund and a free iPad scheme to go towards local authority pay awards and bringing back peak rail fares from the end of September.
Plans to introduce free bus travel for asylum seekers have also been scrapped.
During the statement, Robison hinted that the Scottish Government would not further increase income tax at the next Scottish budget, which has been slated for December 4.
Robison reminded the chamber there was a difficult fiscal outlook in last year’s Medium Term Financial Strategy.
At that time, the projected gap between forecast funding and planned spending in Scotland was forecast to be £1bn in 2024/25, rising to £1.9bn by 2027/28.
She said she announced a range of measures at the Budget for 2024/25 to support the delivery of a balanced position while protecting public services, but added she must now "take further and more urgent action.
Robison added: "Ahead of the Autumn Budget, we call again on the UK Government to ensure that it prioritises investment in public services and infrastructure. We know from bitter experience that yet more Westminster austerity is not the answer, and public services must be protected.
"However, if the Scottish Government does not act, spending will continue to outstrip available funding. This is not sustainable and tough decisions will be required. Annual savings alone will not address this. All members of parliament must face up to this challenge in the demands they make during the budget process."
She went on: "We will continue to be a fiscally responsible government and balance the budget each year – as we have done every year for 17 years and we will do again this year.
“But this will mean we must unfortunately take difficult decisions along the way. I believe we can all agree on the importance of putting the public first in all that we do."
The Finance Secretary said pay is a "significant driver of in-year pressures" and that up to £0.8bn is expected in additional costs for this financial year.
She said that it "remains to be seen whether the UK Government will fully fund it" and if they do not then there will be a "substantial gap" between the workforce's expectations and available funding.
Robison said it must be recognised that Scotland has a larger public sector in Scotland compared with the rest of the UK.
