Businesses call for ‘clear plan’ for economy as Robison announces cuts

Businesses in Scotland have called on the Government to provide a “clear plan” for the economy as the Finance Secretary announced hundreds of millions of pounds in cuts.

Shona Robison spoke in Holyrood on Tuesday – the first day back after the summer recess – and told MSPs up to £500 million would need to be stripped out of the current year’s budget.

Cuts include £188 million of savings from across Government, of which £115.8 million is to come from health and social care.

Ms Robison’s statement was the culmination of weeks of speculation about what would need to be cut as the Government wrestles with a dire financial outlook.

Speaking after the statement, the Scottish Chambers of Commerce chief executive, Dr Liz Cameron, said businesses “understand tough decisions must be made”.

But she added: “We also need certainty from the Government that growing the economy remains the top priority.”

She continued: “We do not underestimate the scale of the challenge which is impacting communities across the United Kingdom.

“That’s why we need to see a clear plan of how the Scottish and UK Governments intend to work in partnership to support economic growth and business investment which is the only route to fund vital public services.”

Ms Robison’s comments came ahead of First Minister John Swinney publishing his Programme for Government on Wednesday, which is expected to be substantially constrained by the financial outlook.

Meanwhile, the Institute for Fiscal Studies agreed with the Scottish Fiscal Commission – Scotland’s independent economic forecaster – that the blame could be laid at the doors of both Westminster and Holyrood for the current crisis.

The think tank’s associate director, David Phillips , said: “The Scottish Finance Minister tries to pin the blame for these difficult decisions on Westminster and a lack of fiscal flexibility under Scotland’s current fiscal framework.

“It is true that even with the top-ups to funding announced by the new Chancellor, Rachel Reeves, alongside her recent spending audit, UK Government funding this year is still very tight.”

He added: “But the Scottish Government isn’t blameless here. It was already clear at the start of the year that things were going to be financially challenging, with public sector pay deals of 2–3% likely insufficient to avoid industrial action.

“The Scottish Government could have held back funding to help meet additional pay and other cost pressures, rather than be forced to make in-year cuts to other spending.”