Budget underspend will be used to tackle the virus

Finance Secretary Kate Forbes has said last year’s budget underspend will help to fight coronavirus.

Delivering a statement in Parliament, Ms Forbes said £258 million of the Scottish Government’s £34.6 billion budget for 2019-20 had not been spent and will be carried forward into this year.

Of the resource budget, which can be used for day-to-day spending, £86m remains, along with £76m of fiscal capital spending and £96m of financial transactions – which can be used to provide loans or purchase equity in private-sector businesses.

Responding to a question from Labour deputy leader Jackie Baillie on whether the cash will be used to help get children back to school following the coronavirus outbreak, the finance secretary said: “We are obviously working with Cosla to understand what some of the costs might be but clearly all the money that is available will be deployed to meet our Covid needs this year.”

She also announced capital borrowing had come in at £45m less

“I have repeatedly made clear that it is revenue borrowing powers that I am looking for. FINANCE SECRETARY KATE FORBES

than the £450m which was budgeted.

Scottish Tory finance spokesman Donald Cameron said: “I note that the Scottish Government borrowed £45m less in 2019-20 than planned and is not therefore using existing borrowing powers to the full.

“With that in mind, can I ask the cabinet secretary why she is demanding further borrowing powers at the very moment that her government is not only underspending to the tune of a quarter of a billion pounds but isn’t even spending the existing borrowing capacity it has?”

Ms Forbes said: “I have repeatedly made clear that it is revenue borrowing powers that I am looking for, we have existing borrowing powers for capital.”

She added that the impact of some construction projects being shelved in March due to coronavirus led to a decrease in the amount of capital borrowing being used, and powers being granted to Scotland to borrow for its resource budget will help to offset the impact of income tax reconciliations – caused by forecasting mistakes – in the coming years.