Covid Scotland: SNP accused of 'fantasy economics' around claim it was forced to cut health budget to support businesses

The SNP has been accused of “fantasy economics” after the finance secretary claimed she was forced to cut the health budget to help support businesses affected by the Covid-19 variant Omicron.

In a letter to Holyrood’s finance committee, Kate Forbes said the £375 million support for businesses announced in the past week had been found by “repurposing health consequentials” – money handed to the Scottish Government following rises in UK Government health spending.

The finance minister said she had also found money through “re-profiling commitments across a wide range of different spending lines”, including parts of the budget covering “employability”.

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She said expected income for 2022/23 had also been cut so the money could be spent in this financial year.

Economy Secretary Kate Forbes has been accused of 'stoking a grievance' with the UK Government around Covid-19 funding.

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However, opposition parties said the explanation of where the additional funding had come from was “utter nonsense” and that it was “entirely inappropriate” to find money for business support in the health budget.

The criticism follows a row over £440m of ‘additional’ funding from the UK Government to the Scottish Government to help tackle Covid-19.

Nicola Sturgeon said just £175m of the £440m constituted new funding, with the rest part of expected consequentials from the coming supplementary estimates procedure.

The First Minister has consistently criticised the UK Government for failing to go further to tackle Omicron and has said the current devolution settlement means devolved nations are hamstrung financially until UK ministers act, a point repeated by Welsh First Minister, Labour’s Mark Drakeford.

Commenting on the letter from Ms Forbes, Scottish Conservative MSP Liz Smith said it was “plainly ridiculous” for the SNP to claim it was forced to cut the health budget.

She said: "This is utter nonsense from the SNP. They are playing politics and seeking a grievance with the UK Government at every turn, instead of focusing on tackling Covid.

"The SNP have an extra £440m to spend, but they've only committed £375m. We know they practise fantasy economics, but it's plainly ridiculous to suggest they needed to cut the health budget."

Lewis Morrison, chair of the British Medical Association Scotland, said it was clear the Scottish Government was “wrestling” with balancing the NHS’s priorities and the economy.

He said: “These are extremely challenging times – with difficult decisions to be made – and compromises to be struck.

"The NHS is facing – as has been widely acknowledged – its most difficult winter ever, so of course it will need every penny possible to ensure care can be delivered as effectively as possible.

"We need them to go on doing everything possible to address that challenge and make sure the NHS has the funding it needs both for the winter and beyond – to meet spiralling demand and address years of underfunding.”

Jackie Baillie, Scottish Labour’s health spokesperson and deputy leader, echoed the criticism of the Scottish Government.

She said: "Despite the protestations, time and time again, this SNP government has found funds down the back of the couch following the announcement of new restrictions.

"While support for the economy is important, it is entirely inappropriate to take money from the health budget at a time when the NHS is under immense strain. This will have damaging consequences for health and social care.”

A UK Government source told The Scotsman the £440m funding had given certainty to Scottish ministers around Covid spending “as Scottish ministers wanted”.

The source said: “The Scottish Government is receiving a block grant of £41 billion per year, a £4.6bn increase making it the largest settlement, in real terms, in the history of devolution. There has also been another £14.5bn to fight Covid via the Barnett Formula.

“The UK Government has supported jobs throughout the pandemic and delivered a world-leading vaccination programme. We are determined to keep working with the Scottish Government to overcome the coronavirus threat and the situation is under constant review."

Responding, a Scottish Government spokesperson said: “Challenging decisions have been required in order to fund our enhanced business support package of £375m, as well as the business and self-isolation support announced on December 14.

“Some health consequentials have been re-purposed to directly fund public health compliance via business restrictions and self-isolation.

"These are crucial to our public health response and strongly linked to ensuring that our NHS and care services do not become overwhelmed in the face of the new variant.

“We have also re-profiled commitments across a wide range of different spending lines and are reducing our expected income in 2022/23 so that it can be deployed in 2021/22.

“Full details of re-allocations will be laid out in the Spring Budget Revision.”

Asked why the Scottish Government had not taken money from other portfolios such as the constitution budget, it said the majority of the constitution, external affairs and culture budget went to support the cultural and events sector which had been hit by Covid-19 and required further support.

The defence comes as UK health secretary Sajid Javid said the NHS was in danger of being “overwhelmed” by the surge in Omicron cases.

Mr Javid said officials were monitoring the data “hour by hour” after new figures showed the Covid infection rates in the UK reaching record levels with an estimated 1.4 million people with the virus.

The warning came as the UK Health Security Agency (UKHSA) estimated someone with Omicron was between 31 per cent and 45 per cent less likely to attend accident and emergency, and 50 per cent to 70 per cent less likely to be admitted to hospital than an individual with the Delta variant.

The findings are broadly in line with studies published on Wednesday by Imperial College London and the University of Edinburgh.

Mr Javid said that, while the UKHSA conclusions were “promising”, Omicron cases were continuing to rise at an “extraordinary rate”.

“Hospital admissions are increasing, and we cannot risk the NHS being overwhelmed,” he said in a statement.

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