Scotland’s block grant falls to lowest share of UK spending in a decade – study

The SNP is urging the Chancellor to increase the cash going to Holyrood in her upcoming Budget.

The SNP said Holyrood’s budget has been cut in real-terms by the UK Government (Jane Barlow/PA) (PA Wire)

Scotland’s block grant has fallen to its lowest share of UK Government spending in nearly a decade, a report has found.

Analysis by the House of Commons Library, commissioned by the SNP, showed that the proportion of Westminster spending on Holyrood has decreased from 8.2% in 2015/16 to 7.6% as of July this year.

The SNP said this meant Scotland’s block grant was worth £6.4 billion less than it was in 2020/21 – a drop of 12.7%.

The figures were calculated before any adjustments were made to reflect the devolution of tax and welfare powers to the Scottish Parliament.

The Scottish Government has said its capital budget has already been cut by 9.6% – about £600 million after being adjusted for inflation – while another 3% cut is on its way this year.

The capital budget is set aside for spending on longer-term projects such as buildings and infrastructure like roads.

The SNP said that came at the same as Holyrood’s resource budget, which pays for day-to-day spending on things such as the NHS, has been cut by nearly 15% in real terms since 2020.

The party urged the Chancellor, who will soon deliver her first Budget since Labour won the election in July, to reverse the cuts.

But it comes as Rachel Reeves is looking to raise up to £40 billion from tax hikes and cuts, while her spending plans have already been agreed with Prime Minister Sir Keir Starmer.

David Doogan MP, the party’s economy spokesperson at Westminster, said: “It’s vital that the Labour Government finally listens to voters and abandons its devastating plan to impose billions of pounds of austerity cuts to public services and Scotland’s budget.

“The Scottish Government has already had its budget slashed by Westminster.

“We cannot afford even more cuts from the Labour Party, which would take money away from our NHS, schools, police and vital infrastructure projects like affordable housing, roads and hospitals.

“Voters were promised change but instead Labour ministers have been lining their own pockets with thousands of pounds of freebies, while imposing painful austerity cuts on the rest of us.”

Mr Doogan warned Ms Reeves of “starving Scotland of investment” in her Budget, which the Chancellor has promised will be a “reset” for the UK.

The Prime Minister has previously warned that the Budget, to be delivered at the end of the month, will be “painful” and that things will get worse before they get better.

Ms Reeves has said financial problems in the UK cannot “just be magicked away” and has pointed to a £22 billion “financial black hole” left over by the previous government.

Mr Doogan said: “Instead of imposing even deeper cuts, the Labour government must abandon its devastating plans for austerity, reverse the cuts to Scotland’s budget and deliver the major investment boost needed to protect public services and get the economy growing.

“The Labour Party can’t face both ways on this. If they impose austerity cuts at Westminster, they will hit public services and communities right across Scotland – and they won’t be forgiven.”

The UK Government has been approached for comment.