SNP ministers accused of 'self-created mess' after warning of public spending squeeze

SNP ministers have been accused of overseeing a “self-created mess” after warning tough financial decisions will need to be made in the coming weeks and months.

Finance secretary Shona Robison said “exceptional measures” have to be put place as she confirmed a freeze in public sector recruitment in all but “essential frontline” posts.

Charity bosses called for a tax rethink to avoid Scotland’s policy ambitions being “sacrificed”. Jamie Livingstone, head of Oxfam Scotland, said: “When the numbers perennially don’t add up, something’s got to change.

“Scotland’s policy ambitions can’t be sacrificed due to a lack of cash. In the upcoming Budget process and new tax strategy, ministers must instead re-think devolved and local tax to unlock the resources needed to realise the First Minister’s promise to build the fairer, greener, more equal country we all want to live in.”

It comes as ministers struggle to fund pay demands from across the public sector, with Ms Robison criticising the UK Government for failing to ensure rises for those such as NHS workers and council staff are fully funded.

The finance secretary said the Scottish Government is now having to take “exceptional measures in order to constrain spend and create the headroom to manage”.

First Minister John Swinney said Scotland faces “the most challenging financial circumstances in the devolution era”. Following a meeting with Angela Rayner, the deputy prime minister, at Bute House, his official residence in Edinburgh, Mr Swinney said: “As I have previously warned, we need an injection of investment in our public services to deal with rising pressures and the ongoing cost of austerity.”

Ms Robison said: “To be clear, we are going to have to take some very difficult decisions about what we can afford and what we can’t afford going forward.”

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Ms Robison has already imposed emergency spending controls across Scottish Government departments, with further spending in 2024/25 said to only be permitted if it is “truly essential or unavoidable”.

She is due to make a “fiscal statement” when Holyrood returns from its summer recess next month. There is already speculation the rollout of free school meals will be affected.

Ms Robison said the Scottish Government would be “making sure that the controls on recruitment are enhanced to make sure we prioritise only those essential frontline posts”.

Meanwhile, ministers confirmed the Scottish version of the winter heating payment will now be means-tested following the same decision by the UK Government.

Ms Robison was unable to say how many pensioners in Scotland would no longer receive the payment, but accepted: “I know a lot of pensioners will no longer qualify.”

Her comments came after figures on Wednesday showed the Scottish Government’s net fiscal deficit had increased to £22.68 billion in 2023/24, compared to just over £18 billion the previous year. The Government Expenditure and Revenue Scotland (Gers) figures showed the deficit as a proportion of GDP increased from 8.4 per cent to 10.4 per cent.

Michael Marra, Scottish Labour's finance spokesman, said: "This is the week the SNP Government's incompetence caught up with it. Yet after 17 years in power they continue to blame everyone and anyone except themselves.”

He added: "The SNP knew it couldn't keep spending without a plan but ducked the difficult decisions kicking the can down the road again and again.

"The SNP's self-created mess is underlined by the fact that yesterday's Gers showed that under the Barnett formula Scots receive £2,417 a head in extra public spending. Scots are right to question why, rather than better public services, they are seeing an incompetent, wasteful SNP government attempting damage control as the money runs out."

Liz Smith, Scottish Conservative finance spokeswoman, said the spending squeeze was “entirely a result” of the SNP’s decisions.

She said: “Although the latest Gers figures show that every Scot benefits from a union dividend of £2,400, the SNP’s mismanagement has brought our NHS, schools and council services to breaking point and created a vast black hole in public finances. While they choose to fritter money on pet projects, core funding for essential services is falling behind other parts of the UK – all as a direct result of the SNP’s disastrously misplaced choices.

“Those have led to a deficit twice the size of the rest of the UK, and now these savage cuts and a clampdown on essential spending. Despite making Scotland the highest-taxed part of the UK, the SNP have shown themselves unable to balance the books and deliver vital services.”

Liberal Democrat MSP Willie Rennie said: “Shona Robison has clearly taken some lessons on financial mismanagement from Liz Truss. No matter how much they try to spin it, SNP ministers are taking these decisions because they have had a habit of making costly blunders for almost two decades.

“From blowing the budget on the ferries to selling Scotland’s prize seabed on the cheap, all the SNP can do now is let everyone else clean up after them. People need a government that will invest in them, which is why Scottish Liberal Democrats want to get our economy growing so that we can lift up our public services and allow communities across the country to thrive." The Gers figures show total revenue increased in Scotland from £86.9 billion to £88.5 billion in 2023/24. Of this, £4 billion was North Sea revenue, down from £7.9 billion in 2022/23, following falls in energy prices and production.

Government expenditure per person in Scotland is £2,417 higher than the rest of the UK, with £20,418 spent on average for every single person north of the border.

Gers sets out revenues raised in Scotland alongside public spending north of the border, and is prepared independently of Scottish ministers.