Covid Scotland: No money for business support or furlough if Scotland imposes another lockdown, admits Kate Forbes

There is no money available for business support or furlough if Scotland imposes another lockdown unless the UK Government agrees to fund it, Kate Forbes has said.

Scotland’s finance secretary said the Scottish Government does not have the funds to provide financial support if restrictions were reintroduced, amid concerns about the record numbers of new coronavirus cases.

Under questioning from Holyrood’s finance committee on Tuesday, Ms Forbes stressed that government ministers have not been discussing plans to reimpose restrictions or a circuit breaker lockdown.

However, with new daily cases reaching a record high of 7,113 on Sunday, a government spokesman said: “No-one wants to see a return of formal restrictions, but we cannot rule anything out as cases continue to surge.”

Finance secretary Kate Forbes delivering her budget at the Scottish Parliament. Picture: Robert Perry/Getty Images

Ms Forbes, who is self-isolating after a family member tested positive for Covid-19, told the committee the government’s finances are “just not sufficient” to offer furlough and other support without the help of the UK Government.

Speaking through a video link, she said: “One of the biggest challenges right now from a financial perspective is the fact that there hasn’t been that much additional consequential funding from the UK Government in the last few months.

“Right now we are trying to remobilise the health service, remobilise the justice system, remobilise a whole host of different public services, as well as deal with the ongoing Covid impact from a budget that has not been supplemented by additional consequentials coming from the UK Government in the way that it was last year.”

Ms Forbes said “the pressures on the Scottish budget are such that we really, really need the sort of structural supports for businesses to be in place – furlough self-employed income support – if we were to find ourselves going into another lockdown”.

“That’s not what we’re discussing at the moment; we’re talking about trying to maximise the impact of the baseline measures.

“But if we were to, then we have no certainty that furlough will be in place, we have no certainty that self employed income support will be in place, and I have no certainty that there will be any additional funding in place.

“I am not sitting on funds right now that I could deploy to support businesses.

“We would need additional help from the UK Government.”

She added: “The Scottish Government’s resources are just not sufficient to help businesses to the level that they need to be supported through furlough and self-employed income support.

“So we would need to ask the UK Government for additional help because it would require funding on a scale that we cannot provide in light of the need to balance and fix our budget.”

The UK Government’s furlough scheme is set to end on September 30. The job retention programmer has been credited with supporting more than 900,000 jobs in Scotland alone.

Scotland’s national clinical director Professor Jason Leitch had claimed on Monday that rising cases may mean a “reverse gear” on restrictions was required, but did not specify in what areas controls could be put in place.

Almost all remaining restrictions were scrapped in Scotland on August 9, with all venues including nightclubs allowed to open.

The Scottish Government has retained a requirement to wear masks in indoor spaces, apart from when eating, drinking or dancing in a nightclub.