Holyrood statement

Spending cuts loom as FM outlines priorities

John Swinney
Tough choices: John Swinney will address parliament

First Minister John Swinney is facing huge cuts to public services after Scotland’s top civil servant warned of a huge black hole in the budget.

Permanent Secretary John-Paul Marks told the finance and public administration committee that “significant” measures would be required to balance the books.

It has raised the prospect of a shift in key policies on transport, and infrastructure such as replacement buildings.

The proposed scrapping of peak-time rail fares could be abandoned, while the funding of crumbling facilities could be further delayed. There could be pressure on a range of free services such as prescriptions and bus travel. It is thought the new public finance minister Ivan McKee will propose a range of tech-led reforms to improve efficiency.

Mr Swinney is expected to address the looming spending crisis when he outlines his priorities for government in Holyrood today. He will commit the Scottish Government to eradicate child poverty and to work with business and industry to grow the economy, invest in net zero and deliver stronger public services.

In a statement ahead of today’s address, he said: “I am acutely aware of the economic and fiscal realities that we face and I want to take forward measures that will help people and their families to get on in life: to enable the people of Scotland to live happier, healthier lives.”

Now that he is leading a minority government Mr Swinney will need to work with other parties in order to implement his plans.

“One of the benefits of long service in politics is having witnessed the Scottish Parliament when it is functioning at its very best. That happens when parties work constructively together,” he said.

Finance Secretary Shona Robison earlier confirmed that the government’s medium term financial strategy and tax plans would be delayed until 20 June because of the changes at the top of government.

This means it will take place on 20 June, just over a week before the summer recess. Finance and public administration committee convener Kenneth Gibson said that the delay was “not really acceptable from a scrutiny point of view”.

He added: “It makes it extremely difficult for clerking teams to get papers out to members, let alone for members to absorb it to have any meaningful strategy in our last committee meeting on the Tuesday before recess.”

Queen Street
Pressure on cutting peak rail fares

The Scottish Fiscal Commission has previously warned of a £1 bilion deficit by the end of this year and £1.9bn by the end of 2027-28 if changes were not made.

The permanent secretary pointed to high inflation, backlogs caused by the pandemic and a real terms fall in the capital block grant, meaning the “right choices” had to be taken to balance the budget.

A spokesman for the First Minister later said: “I don’t think it’s a secret that we’re under significant pressure.

“The first minister himself has said that in the chamber – that’s obviously been a reality for some time. We’ve had 14 years of austerity, that’s the way it is. Obviously inflation and other issues in the economy are causing problems.”

Michael Marra, Scottish Labour’s finance spokesman, told the committee that Scotland’s financial position was “like landing a jumbo jet on a stamp”.

Michael Marra: finances at breaking point

He asked Mr Marks whether he had told the First Minster that there would have to be significant spending reductions. Marks replied: “I have already done that.”

In a statement issued after the meeting, Mr Marra said “This revelation from the Permanent Secretary exposes just how precarious Scotland’s public finances are.

“Successive SNP Governments and Finance Secretaries, including the current First Minister, have pushed the public finances to breaking point.

“Their recklessness means that frontline services for the most vulnerable now face swingeing cuts.

“In his statement to Parliament tomorrow, the First Minister must come clean with the people of Scotland as to how he will fix the SNP’s culture of financial incompetence and get the public finances back on track.”

Scottish Conservative shadow finance secretary Liz Smith said: “The Permanent Secretary’s admission that he has already warned John Swinney that there will need to be significant spending reductions only confirms the SNP’s mishandling of public finances.

Liz Smith in Scottish budget debate
Liz Smith: Mr Swinney must face the consequences of his party’s mismanagement

“There have already been savage cuts as a result of the black hole they created in our finances, and it’s clear that more will be on the way.

“John Swinney has been at the heart of the SNP over years of waste and neglect of frontline services and now has to face the consequences of his party’s mismanagement. But unfortunately it will be Scottish taxpayers who have to foot the bill, and bear the brunt of these cuts.”

The Scottish Retail Consortium has written to Scottish ministers calling for a simplification of income tax and parity between Scottish and English business rates to be included in the government’s financial strategies.

David Lonsdale, the consortium’s director, said: “Scotland’s tax landscape has become increasingly cluttered so there is a clear need for a strategic, coherent and competitive vision which can support economic recovery and stimulate private sector investment. Regrettably the most recent Scottish budget only further muddied the water.”

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