Scottish spending review: As cuts loom and incomes fall, brace for tough years ahead

If you’re after a cheerful Friday read, it’s probably best to look elsewhere.

Ahead of the publication of the Scottish Government’s resource spending review, which sets out its broad spending plans for the coming years, finance secretary Kate Forbes warned of “difficult decisions”. She wasn’t wrong.

The document and its accompanying forecasts make for tough reading.

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Finance Secretary Kate Forbes. Picture: Robert Perry/pool/AFP via Getty Images

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To give a bit of background, the Government previously projected a growing gap between its funding and spending of around £3.5 billion by 2026/27.

There were a number of reasons for this – some within the control of Scottish ministers and some not.

Expensive policy commitments, income tax shortfalls, the pandemic and inflation all played a role.

But the financial outlook means choices must be made to balance the books, and the spending review lays bare the winners and losers.

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Spending on social security benefits, for example, will jump from £3.9 billion to £6.4bn, a real terms boost of 48 per cent.

Climate, transport and parts of education will also see rises – as will health, although not by enough to cope with demand.

The losers? Analysis by the Institute for Fiscal Studies found budgets for councils, the police, prisons, justice, universities and rural affairs are set to fall by around 8 per cent in real terms over the next four years – equivalent to a £1.1bn cut.

Many of these areas are already under pressure.

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Police and fire unions are sounding the alarm, and the Law Society of Scotland said it “risks disaster for the justice sector”.

"A bad day for the public, a good one for criminals,” was how Calum Steele, general secretary of the Scottish Police Federation, put it.

Cosla, the council umbrella body, previously said crucial services such as road maintenance, libraries and youth work face cuts unless finances are placed on a sustainable footing.

Elsewhere, the review says the public sector is to be reduced to around its pre-pandemic size and buildings sold off.

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And if all that wasn’t depressing enough, disposable household incomes in Scotland are forecast to see their biggest fall since records began, according to the independent Scottish Fiscal Commission.

In short, brace for some tough years ahead.

Told you this wasn’t a cheerful read. Enjoy your weekend.

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