The Courier & Advertiser (Fife Edition)
Scotland facing a £1bn spending gap
The Scottish Government is facing a £1 billion shortfall for day-today spending next year – with this projected to rise to almost £2bn just three years later.
Deputy First Minister Shona Robison outlined the “extremely challenging” picture at the same time as she told MSPs of “record falls in living standards” experienced by Scots.
Real disposable income fell 4.1% between 2021-22 and 2023-24, she said, adding it is not expected to recover to pre-pandemic levels until 2026-27.
Mr Robison, who is responsible for finance within the Scottish
Government, stressed she will not back away from taking “tough decisions” and called on Westminster to provide more money.
She also urged the UK Government to provide additional funding to cover “reasonable pay settlements” for public sector workers.
She addressed MSPs as the Scottish Government’s medium term financial strategy showed resource funding is expected to increase from £45.26bn in 2023-24 to £50.971bn by 2027-28.
But Ms Robison said Holyrood ministers are still facing a “real-terms reduction” in the block grant they receive from
Westminster for 2024-25. She added: “Resource spending is projected to grow. Our spending requirements could outstrip our funding by £1bn in 2024-25, and £1.9bn in 2027-28.”
For capital spending, used to fund major infrastructure projects, Ms Robison said there could be a gap of “around £900 million by 2025-26”.
Describing this as “unsustainable”, she said there will need to be a “reset” of both resource and capital spending in next year’s Scottish budget.
The budget, to be unveiled towards the end of this year, will “set out this Government’s plans to put our public finances on a more sustainable path”, Ms Robison said.
She vowed Scotland will continue with its “progressive” taxation, which sees higher earners pay more income tax than south of the border.
Conservative finance spokeswoman Liz Smith said the “very precarious situation facing the Scottish economy” is “yet more proof of the SNP’s utter failure”.
Labour’s Michael Marra said there is “no answer” to the “central question of our public finances, the £1.9bn gap between the tax we collect and the policy commitments this Government has made”.