MSPs ‘deeply concerned’ about Government’s lack of strategic financial approach

Holyrood’s Finance Committee said the Scottish Government is failing to take a long-term view.

The next Scottish Budget will be published in December (Jane Barlow/PA) (PA Wire)

A cross-party group of MSPs is “deeply concerned” about the Scottish Government’s lack of a strategic approach to its finances, saying there is little evidence of ministers taking a long-term view of managing the public purse.

Holyrood’s Finance Committee noted that for each of the last three years, the Finance Secretary has had to take emergency measures to deal with in-year budget pressures.

Publishing its pre-Budget scrutiny report, the committee made a number of critical conclusions but recognised there has been recent progress on public-sector reform.

In September, Finance Secretary Shona Robison announced cuts of up to £500 million from Scottish Government spending, saying urgent action was necessary to balance the books.

Last month, Audit Scotland warned that “difficult decisions” are needed to secure the future of public services in Scotland, accusing the Government of short-term thinking by making one-off savings to pay for recurring expenditure such as rising public-sector pay deals.

Ms Robison is due to publish her Budget for the next financial year on December 4.

Any issues impacting the 2024-25 Budget – such as higher than anticipated pay settlements and increasing social security payments - could have been foreseen and mitigated when the Budget was set, last December

Kenneth Gibson, Finance Committee convener

The SNP minister will need to secure votes from another party for it to pass, with the Scottish Greens seen as the most likely option.

Committee convener Kenneth Gibson said: “Our committee is deeply concerned about the Scottish Government’s lack of strategic approach to managing Scotland’s public finances.

“There is little evidence of medium and long-term financial planning.

“Year-on-year budgeting has become increasingly challenging, with significant emergency controls being required in each of the last three years.

“We recognise devolved governments have fewer flexibilities to deal with ‘shocks’.

“However, many issues impacting the 2024-25 Budget – such as higher than anticipated pay settlements and increasing social security payments – could have been foreseen and mitigated when the Budget was set, last December.”

Mr Gibson said he is “encouraged” by the Government’s focus on early intervention, asking ministers to consider whether introducing a new category of public spending – called preventative spend – would be appropriate.

Conservative finance spokesman Craig Hoy said: “This damning report highlights the gross financial mismanagement from the SNP that is continuing to deeply damage Scotland’s economy.

“The public will be alarmed that the committee have confirmed the lack of long-term financial planning from SNP ministers.

“That has created an ever-growing black hole in Scotland’s finances which has resulted in our public services facing savage cuts and economic growth remaining sluggish and below the rest of the UK.

“Yet the only answer from the SNP has been to continually hit Scots with more taxes, which are the highest in the United Kingdom.”

A Scottish Government spokeswoman said: “The Scottish Government has a strong record of balancing its budget every year.

“However, this has been increasingly difficult in the face of high inflation, the effects of Brexit and under-investment by the previous UK Government, so difficult choices have had to be made.

“Ministers continue to do all they can to ensure public finances are sustainable, despite the significant uncertainty around funding from the UK Government in the medium to long term.

“We are delivering our medium-term financial strategy alongside our programme of public service reform, which will improve outcomes, reduce inequalities, bring down costs and reduce long-term demand.

“Scottish ministers will give this report careful consideration and will respond to the committee after the 2025-26 Scottish budget is published, in line with normal practice.”