The Scottish Finance Secretary Shona Robison will have to accept the need for higher taxes if she is to meet the government’s priorities, according to a think tank.

Ms Robison will set out the government’s medium-term financial strategy on Wednesday giving a five-year outlook.

She will again claim Scotland’s settlement in the recent UK Spending Review has made the situation worse, short-changing the Scottish Government by £1.1 billion in its day-to-day funding compared with UK Government departments.

The MFTS is normally published each May, but it was delayed by four weeks this year because of the timing of the UK Government’s multi-year Spending Review, published on 11 June.

It means MSPs will be unable to scrutinise the document until September, after the summer recession.

Stephen Boyd of the IPPR think tank said the strategy must outline how the Scottish Government plans to fund the First Minister’s key priorities: tackling child poverty, growing the economy, addressing the climate crisis and improving public services.

He said that in order to meet its targets, spending will have to rise which means “that taxes will likely have to rise.”

Mr Boyd also expects a change of approach on public sector pay. “It is entirely possible that a revised approach to pay and workforce will be signalled in the MTFS.” he said. “Pay settlements have been relatively generous in the devolved public sector over recent years.”

Last week Scotland’s fiscal experts warned that the absence of a coherent, long-term financial roadmap is hampering public sector reform efforts, and called for a “long-term roadmap”.

Speaking at Scotland’s Fiscal Future, an event hosted by the Institute of Chartered Accountants of Scotland (ICAS), David Bell, Professor of Economics at the University of Stirling, highlighted the confusion caused by navigating too many financial strategies.

He said: “We need to have a long-term roadmap going forward. We’ve got the medium-term financial strategy, the programme for government, the national strategy for economic transformation, the national performance framework, as well as the budget. Trying to align all of these things and figure out exactly what track we need to go down is quite difficult.”

Stephen Boyle, auditor general at Audit Scotland echoed these concerns, adding: “The Fiscal Commission and others are pointing out that we have a significant gap in the way we spend public money compared to the money that we’re receiving, so there are difficult choices coming our way as a country.” 

ICAS convened a panel of experts from the Institute for Fiscal Studies, Audit Scotland, NHS Scotland, and the Federation of Small Businesses, including:

John Ireland, Chief Executive, Scottish Fiscal Commission

Stephen Boyle, Auditor General for Scotland, Audit Scotland

Prof. David Bell, Professor of Economics, The University of Stirling

Fiona Bennett, Deputy Director, NHS Scotland Finance

Stefanie Redmond, Tax Policy Senior Manager, KPMG UK

Stacey Dingwall, Head of Public Policy and External Affairs (Scotland), The Federation of Small Businesses

David Phillips, Associate Director, The Institute for Fiscal Studies