Scots told brace for 'new era of austerity' amid Scotland spending cuts as source of proposed savings revealed

Scotland has been warned to brace for a “new era of austerity” as finance secretary Shona Robison lays bare deep cuts to public services.

The SNP finance secretary will use the first day MSPs return from summer recess to claim a planned squeeze of funding from the Labour UK government will have “a profound effect on our ability to deliver for the people of Scotland”.

First Minister John Swinney and finance secretary Shona Robison. Picture: Lisa Ferguson/National World

Labour disputes the claim and has stressed the Scottish Government’s financial strain is of its own making.

Ms Robison will give a stark picture of the economic climate the Scottish Government is facing and where the axe will fall, ahead of First Minister John Swinney setting out his first Programme for Government on Wednesday.

READ MORE: John Swinney's 'baloney' claim over the SNP and Labour blame

The Scotsman understands that some of the proposed savings could include already-committed funding for projects and policies being delayed instead of being cut completely.

Mr Swinney’s Programme for Government is expected to bring forward plans to deliver on his four key priorities - tackling child poverty, growing the economy, battling the climate crisis and improving public services - with a “laser-focus” on those four aims. 

SNP ministers are under pressure to balance the books after agreeing above-inflation pay deals for public sector workers over the summer.

The independent Scottish Fiscal Commission has warned the pay deals have exceeded the 3 per cent metric set out in the Scottish Government’s pay policy last year, leading to Ms Robison introducing emergency controls to maintain balance of the books for this financial year.

But Ms Robison has insisted the pressures facing her government are due to austerity from Westminster.

Speaking ahead of delivering her budget update to MSPs on Tuesday afternoon, Ms Robison said: “The SNP Government has delivered a balanced budget in every year that we have been in office – and we will continue to do so. 

“I am proud to serve in a government which is investing hundreds of millions of pounds to lift children in Scotland out of poverty, and is ensuring our police, our nurses and our teachers are the best paid in the UK.

“We have taken many tough choices, including asking those on higher incomes to pay a bit more income tax, in order that we can invest more in public services like our NHS.”

Ms Robison added: “But the fact is, the Scottish Government operates with a largely fixed budget determined by Westminster – and under the Labour government it is clear that we are entering a whole new era of austerity.

“The cuts that they are proposing to make will have a profound effect on our ability to deliver for the people of Scotland, but SNP Government will do everything we can to protect people and public services from the cuts that Westminster is making to our budget.”

The narrative over austerity comes after Labour Chancellor Rachel Reeves warned a £22 billion black hole in UK finances needs plugged after the Conservatives “covered up” the situation - an accusation denied by the Tories.

Rachel Reeves and Keir Starmer (Photo: JUSTIN TALLIS/AFP via Getty Images) | AFP via Getty Images

Last week, Prime Minister Sir Keir Starmer issued a stark warning that next month’s budget is likely to be “painful” as Labour struggle to follow through with the promise of “change” pledged during the election campaign amid the gloomy economic climate.

Labour has rubbished Ms Robison’s blame being thrown its way, and accused her and her colleagues of “the usual SNP secrecy and spin” - as the party calls for clear steps to be set out by the government.

The SNP has been urged to publish a full breakdown of the cuts it plans to make by department and what impact it expects the decisions to have on jobs and services. 

Scottish Labour finance spokesperson Michael Marra said: “With brutal cuts to services and potential job losses looming, the usual SNP secrecy and spin will not cut it. It’s time for the SNP to come clean about the financial chaos it has created and tell us the truth about what lies ahead.

“The SNP has said ‘essential’ jobs would be protected from cuts, but it has failed to say in any way what an ‘essential’ job actually is.”

Mr Marra added: “This incompetence and failure to plan is causing uncertainty for public sector workers and chaos for service leaders, who now need urgent clarity. The Government must publish a clear and detailed explanation of what exactly it is going to do and what the consequences will be.

“The SNP’s pathetic attempts to deflect blame have been demolished by experts – it must drop the excuses and take responsibility for its own failure.

“Scotland cannot keep paying the price for the SNP’s financial and economic illiteracy. The Scottish Government must start being transparent about the public finances, end the waste, and treat taxpayers’ money with the respect it deserves.”

The First Minister has denied his Government has been careless with the public finances, and is adamant his administration has been “living within its means”.

First Minister John Swinney Picture: Jane Barlow/PA Wire

Speaking to the BBC, Mr Swinney said policy choices like the Scottish Child Payment meant child poverty was at a lower level in Scotland than elsewhere in the UK. While Scotland is facing “real budgetary challenges”, the First Minister said Sir Keir’s government had chosen to “prolong austerity”.

Pressed that Labour are moving money to pay for public sector pay deals and Mr Swinney’s Government is going to be in “exactly the same position”, the First Minister was asked whether Ms Robison’s statement would be a proclamation of “SNP austerity”.

Mr Swinney denied this is the case and said the Scottish Government was “living within its means”.

He said: “We’ve made the hard choices about expanding the resources that are available to us. Today, if the SNP Government hadn’t taken the decisions we’ve taken, on tax, Scottish public expenditure will be £1.5 billion lower than it is today.”