John Swinney, the deputy first minister, has written to Nadhim Zahawi warning that the Scottish Government will be forced to make “deep cuts” to public services unless further funding is made available from the Treasury. He blamed the shortfall on the higher-than-expected level of pay rises the SNP administration is being asked to deliver to the public sector, fueled by inflation of more than 10%. Mr Swinney, who took over the finance portfolio while Kate Forbes is on maternity leave, argued this was not expected in the UK’s 2021 spending review, “which has set the bulk of Scotland’s current budget”. But the Scottish Tories accused the SNP of blaming the Treasury for its own failure to fund public services in Scotland. Liz Smith, the Scottish Tories’ finance spokeswoman, said: “The real story is that the Nationalists have created a £3.5bn black hole in their finances according to the IFS [Institute for Fiscal Studies]and they have already cut frontline services to the bone. “They have some nerve trying to shift the blame elsewhere – council workers are going to strike because the SNP have left local authorities so cash-strapped they can’t improve wages. “This despite massive additional support from the UK Government, including the biggest block grant from Westminster in the history of devolution.” The Treasury pointed out that the block grant handed to SNP ministers was already worth a record £41bn this year.
Faced with a £3.5 billion deficit
The respected IFS warned in May that the Scottish Government was facing a £3.5bn deficit in its finances over the next four years thanks to “a series of costly spending commitments”. Spending on benefits is set to expand dramatically to fulfill a series of promises on Scotland’s welfare payments, which are more generous than in the rest of the UK. SNP ministers will have to find an extra £1.3 billion in benefits by 2026/2027. Schools, universities, the police service and councils face years of real budget cuts to pay for Nicola Sturgeon’s overtime, after a spending review revealed by Ms Forbes. The Scottish Government’s cash squeeze has been further strengthened after ministers agreed to help fund a five per cent pay rise for drivers on the nationalized ScotRail service, despite their average wages being more than £55,000. Unions warned this set the benchmark for pay rises across the public sector and last week announced plans for Scotland’s biggest council strike in more than a decade. They said bin collections would be hit later in August, with rubbish “piling up the streets” and schools could close their doors in September. A series of similar pay disputes have erupted involving Scotland’s police, firefighters and nurses. Unite insisted on Sunday that council staff had no choice but to strike “all out” after rejecting a “bad” two per cent pay rise and scorning the Scottish Government’s refusal to intervene in the dispute.
“They robbed local authorities’ budgets”
Eddie Cassidy, of the union’s executive board, said Sturgeon had “definitely robbed local authority budgets over the last 10 years” and it was “ridiculous” her government claimed it could not intervene. Further talks with council leaders are expected to take place on Monday. In his letter to the Chancellor, Mr Swinney warned that soaring inflation would lead to “reduced spending power in public sector budgets” and this was “deeply worrying” for service delivery “and our ability to meet costs life crisis”. He said: “Given our fixed budgets, limited borrowing powers and the inability to change tax policy within the year, the lack of additional funding for public sector pay deals through the Barnett formula means the Scottish Government could repeat these remuneration agreements only for civil servants. with deep cuts in public services. “I would urge you to consider appropriate funding for public sector pay and I would welcome early discussions with you on this matter.” But a Treasury spokesman said: “We are giving the Scottish Government a record £41bn a year over the next three years, the highest spending review settlement since devolution. “As a result, the Scottish Government receives around £126 per person for every £100 per person of equivalent UK spending in England over the next three years.” Mr Cassidy told the BBC’s Sunday Show that the SNP had imposed “deeper and tougher” cuts to local authority budgets in Scotland over the past decade than in England. Council chiefs had made it clear that funding was needed to improve pay offers.
