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Finance Secretary responds to UK Government financial plans.
The UK Government’s budget does not represent a good deal for Scotland, as a consequence of a real terms cut to Scotland’s revenue block grant of over £200m next year.
Commenting on today’s UK Government budget Finance Secretary Derek Mackay said that Scotland is being “short changed”.
Despite a commitment of over £300m resource funding for the NHS in England this year, Scotland will receive only £8m in consequentials in 2018-19 due to UK cuts elsewhere.
Of the additional money the UK Government announced as being added to Scotland’s budget, over half of it - £1.1bn – are financial transactions which the Scottish Government cannot spend on frontline public services, and which have to be repaid to the Treasury.
Mr Mackay said:
“Scotland’s resource block grant for day to day spending will fall by over £200m in real terms next year and while money for the NHS in England should see a proportionate share come to Scotland, cuts in other UK departments mean that instead of receiving over £30m this year the Scottish Government will receive only £8m - a fraction of that spending.
“The reality is that over £1.1bn of the money being promised to Scotland over the next four years are loans that the Scottish Government cannot spend directly on frontline public services and that have to be paid back to the Treasury.
“Austerity has not ended and over ten years of this UK Government, between 2010-11 and 2019-20, we will continue to see Scotland’s discretionary budget fall in real terms by £2.6bn, that’s 8.1%.
“At the same time this budget has failed to lift the public sector pay cap. The Scottish Government believes all public sector workers deserve a pay rise and we will deliver one.
“On business rates and stamp duty the UK Government are following our lead. We have already moved to make revaluations more frequent and the vast majority of first time buyers are already exempt from tax when they buy a home.
“Ending the VAT obligation on police and fire services and supporting the oil and gas industry is welcome, but in both cases these moves are well overdue, and the UK Government must now pay back the £140m of VAT they have already taken.
“The reality of today’s budget is that Scotland continues to be hit by UK austerity and the decision to leave the EU. Compared with the £1bn awarded to the DUP, the funding settlement for Scotland unveiled today is disappointing.
“I have consistently argued for a better settlement for Scotland, and this budget does not reflect that.”