SNP ditch plans to return public sector workforce to pre-pandemic levels as £1bn fiscal gap looms

Kate Forbes had set out plans to reduce the workforce by around 30,000 people while she was finance secretary.

Plans to cut at least 30,000 jobs from the public sector workforce and reduce the overall size to pre-pandemic levels by 2027 have been ditched by the Scottish Government, the finance secretary has confirmed.

Shona Robison told MSPs the proposed approach had been replaced with a “more nuanced” policy whereby public bodies were responsible for ensuring their payroll was affordable, while allowing them to still deliver key public services.

The deputy first minister also floated the possibility of potential mergers of some of the near 130 public bodies to save money as the Government faces a looming £1 billion gap in its finances ahead of the next Budget.

First Minister Humza Yousaf and Deputy First Minister Shona Robison (right) arrive for First Minister's Questions (FMQs) in the main chamber of the Scottish Parliament in Edinburgh.

Parts of the public sector such as health saw significant increases in the number of staff during the pandemic to help with increased demand, increasing the overall public sector payroll to more than £24bn.

MSPs on Holyrood’s finance committee were also told how the Government had spent £900 million more on pay this financial year due to significant pay deals with workers such as teachers and nurses.

Ms Robison said there was now an assumption within the Government that parts of the public sector would continue to grow its workforce, such as health, and the Government was now adopting a “more nuanced” approach to job cuts.

She said: “The overall message is that public sector needs to make sure that its workforce is affordable and that their projections are within their financial envelope. Each public body will now be responsible for making sure that its workforce is the right size to deliver what needs to be delivered, but is affordable.

"That is in recognition of areas like social security and health, which are areas that are continuing to grow for reasons that we understand.”

Asked by Scottish Labour’s finance spokesperson Michael Marra if that meant the “blunt instrument” put forward by Ms Forbes had been dropped, Ms Robison said “Yes.”

She added: “But we don’t want to see exponential growth because bodies have to live within their financial means.”

The finance secretary also committed to setting out the scale of the cuts necessary for the Scottish Government to balance its Budget in 2024/25 without assuming any additional money from the UK Government’s Autumn statement.

The Government is set to increase taxes and cut spending to close the £1bn gap that is predicted for 2024/25, with the First Minister among those making noises that some programmes could move from a universal delivery model to a more targeted approach.

Ms Robison said she would be focusing on growing Scotland’s tax base, changing the country’s tax policy, and ensuring the right level of prioritisation. She also said work to reform the public sector was already underway and that it was her job to “bring a pace and acceleration” to that work.

The finance secretary said she anticipated some bodies may end up sharing certain services and even floated the possibility of mergers between public bodies. However, she gave no detail as to where that might take place.

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