Delivering sustainable finances
Strategy to be published after ‘disappointing’ UK Spending Review settlement.
A Medium Term Financial Strategy will be set out next week in the aftermath of a “disappointing” UK Spending Review and welfare reforms that will reduce Scotland’s budget.
Finance Secretary Shona Robison will outline the five-year strategy and accompanying action plan to ensure public money is focused on Scottish Government priorities.
The Finance Secretary said:
“This government has delivered a balanced budget every year while taking steps to improve the overall sustainability of our finances. This is despite a deeply challenging financial situation caused by rising global instability, persistent higher inflation and over a decade of UK austerity.
“Our disappointing settlement at the recent UK Spending Review has made the situation worse, short-changing the Scottish Government by £1.1 billion in our day-to-day funding compared with UK Government departments. This comes on top of reductions in our funding worth hundreds of millions of pounds as a result of the UK Government’s proposed welfare reforms and failure to fully fund its employer National Insurance increase.
“In this context, it is important that we take action to maximise funding targeted at frontline services such as our NHS.”
Background
The Medium Term Financial Strategy (MTFS) will outline the approach to ensuring Scotland’s finances remain on a sustainable footing. It will be accompanied by a Fiscal Sustainability Delivery Plan, setting out the actions being taken in support of the MTFS. Both documents will be presented by the Finance Secretary in a statement to Parliament on Wednesday 25 June.
Under the UK Spending Review the Scottish Government’s day-to-day spending is set to grow by 0.8% over the next three years, compared with 1.2% average growth for UK Government departments. Had this funding grown in line with UK Government overall spending, the Scottish Government would have £1.1 billion more to spend on day-to-day priorities over the next three years.
The Scottish Spending Review and a new infrastructure pipeline will be published alongside the 2026-27 Scottish Budget later this year.