Finance Minister Announces £500million Of Changes or Cuts Needed This Year To Balance The Scottish Budget

4th September 2024

Shona Robison confirmed on 3 September 2024 that up to £500m in savings will be introduced to support the 2024/25 budget for the Scottish government.

£60m of savings will come through Emergency Spend Controls, particularly targeting recruitment, overtime, travel and marketing.

A further £188m will be from "additional specific savings across all portfolios" - including cutting spending on sustainable and active travel, and via increased interest income on Scottish Water loan balances.

Up to £460m of additional Scotwind revenue funding will also be utilised, drawing from funding earmarked towards net-zero. Scotwind money comes from the sale of licence mainly for wind farms off the Scottish coast.

She also reiterates previously known changes, such as cutting free bus travel for asylum seekers, and an agreement with local government that they can draw on existing programmes to fund the pay deal, for a further £65m of savings.

Previously announced was the cut to the Winter Heating Allowance mainly for pensioners not in receipt of benefits.

Options to lower spending will consider estates, procurement, fund management and revenue raising.

Health services will be largely protected.

The government had already announced a number of cuts, including ending a rail fares reduction scheme meaning some rail fares will increase.

Income taxes look to be left unchanged a the higher levels than in England.

Scottish Conservative MSP Liz Smith for the Conservatives said the Scottish Fiscal Commission has made it "abundantly clear" that much of the pressure facing the country's finances is down to the government's own decisions.

Smith cites examples of above inflation pay settlements for public sector workers and the gap between spending on devolved security and associated BJA funding.

She added: "And as Prof Roy said again this morning, the fact the Scottish economy has not been growing at the same rate as the UK economy since income tax was devolved, the Scottish government is missing out on £624m."

Shona Robison says that 4 December is the date for the next Scottish budget. The UK budget which will of course affect the Scottish budget is to be in October.

The budget black hole being talked about today is not the same as the black hole the IFS was warning about ahead of the election - that was about future spending.

The Scottish Fiscal Commission has pointed to other policy choices like funding a council tax freeze and higher levels of social security spending.

Labour's Michael Marra taunted if a date had been set for more cuts next year.

Scottish Fiscal Commission - Fiscal Update 24 August 2024