Scottish government confirms ‘urgent’ £500m cuts to balance budget

Scotland’s finance secretary Shona Robison has announced up to £500m of spending cuts as she insisted “urgent action” was needed to ensure the government can balance its budget.

Ms Robison said as well as the “direct savings” she was making, she would also “reluctantly” be using up to £460m of cash raised via the ScotWind scheme – where parts of the Scottish seabed are leased out for offshore wind farms.

But she told MSPs at Holyrood: “As we look ahead, it is clear that further significant action will be needed to reset the public finances onto a sustainable path.”

Government departments will be asked to make a further £188m of additional savings, with these coming from across all portfolios, Ms Robison said.

This includes £115.8m of savings from the health and social care budget – though, in a letter to MSPs on Holyrood’s Finance Committee, Ms Robison offered “assurances that the health portfolio will seek to protect key frontline emergency services”.

Elsewhere, spending on transport is down by £23.7m; net zero and energy is reduced by £23.4m; with social justice down £15.7m.

The cuts were revealed as Ms Robison gave a statement updating Holyrood as MSPs returned from their summer recess.

Ministers had already cut a scheme to reduce peak rail fares which, together with other measures, will save a further £65m.

Were Scotland an independent country, we would not be paying the price for bad decisions taken at Westminster

Meanwhile, the Scottish government will make up to £60m of further savings as part of “emergency spend controls”, focused on recruitment, overtime, travel and marketing.

Ms Robison stressed this “further and more urgent action” was needed to “ensure we can balance the Scottish budget in 2024-25”.

She told MSPs that factors such as funding public sector pay rises were a “significant driver” for the growing financial pressures the government is dealing with.

Her comments came after members of Unison, the largest local government trade union, voted against the latest pay offer made to council staff in Scotland, raising the prospect of further strike action.

With Scotland facing a rising funding gap, Ms Robison insisted that “significant action will be needed to reset the public finances onto a sustainable path”.

It comes as the gap between revenue and spending is already forecast to grow from £1bn in 2024-25 to £1.9bn by 2027-28.

But Ms Robison also sought to lay the blame with UK governments and the “continued Westminster austerity”  – stressing that the Scottish government has a “largely fixed budget”,  much of which is determined by the block grant received from the UK.

“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,” she said.

However, Scottish Conservative spokesperson Liz Smith said the independent Scottish Fiscal Commission had made “abundantly clear” that much of the financial pressure came from the Scottish government’s own decisions.

She said Scotland was losing out on £624m in revenue because its economy is growing at a slower rate than the UK.

Scottish Labour’s finance spokesperson, Michael Marra, said Ms Robison’s statement was a “threadbare attempt to pass the buck”.

“Almost half of the total adjustments today are pulled from a one-off raid on ScotWind money, lost now into the black hole rather than investing for our future,” he said. “It almost guarantees this short-term, sticking-plaster politics will run and run.”

Scottish Green finance spokesperson, Ross Greer, claimed the proposals were a “disaster for our climate”.

Scottish Liberal Democrat leader Alex Cole-Hamilton meanwhile hit out at the Scottish Government for announcing health cuts – including a £19m reduction in mental health funding – in a letter to MSPs on the finance committee.

“Rather than stand up and be honest that she was taking an axe to NHS services, the finance secretary has chosen to sneak these cuts out in a letter,” he said.