Union fury as John Swinney says public sector has to shrink

First Minister accused of raising the prospect of job losses through political choice rather than financial necessity

John Swinney has been warned there is “no justification” for job cuts after he forecast that Scotland’s public sector will have to shrink.

The First Minister raised the prospect of cutbacks during a speech in Glasgow on Monday, but said his government is committed to avoiding compulsory redundancies.

He pledged a “national project of renewal” to overhaul all aspects of Scotland's public sector, including the NHS, education, local government and criminal justice.

First Minister John Swinney, speaking at Queen Elizabeth University Hospital. | Robert Perry/Press Association

But Unison described cuts as a “political choice” rather than a financial necessity and said the First Minister should use his increased budget to hire more public service staff.

Last week Chancellor Rachel Reeves set out the UK Government’s spending review, in which she said Holyrood’s budget will increase by £2.9 billion a year on average.

She said the block grant funding from Westminster will reach £52bn by 2029, making it the “largest settlement in real terms since devolution”.

Lilian Macer, Scottish secretary at Unison, said: “There is no justification for job cuts in public services - these are political choices, not financial necessities.

Lilian Macer from Unison Scotland. | Julie Broadfoot

“The First Minister’s budget is increasing, and he also holds the power to raise revenue.

“Scotland’s public services need more staff, not fewer.

“NHS waiting lists are at their longest since devolution, social care is in crisis, and local government has been hollowed out by over a decade of cuts.

“Public services are already stretched to breaking point.

“Staff go above and beyond every day - working longer hours, skipping breaks, and plugging the gaps to keep services going.

“The First Minister must prioritise our communities and not leave them paying the prices for yet more cuts to the services we all depend on.”

Much of his speech focused on the use of new technologies such as AI to help make public services easier to access and more efficient.

When asked how many public sector job losses there will be after a reset of public services, Mr Swinney said: “I think there’s undoubtedly going to be.

“We’ve made it clear there will have to be contractions in the public sector workforce in the years to come - that’s an inevitable part of the management of public finances, given the outlook we got from the UK Government’s spending review.

“That has to be undertaken in a way that does not in any way shape or form damage the outcomes that people can expect from public services.

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“Therefore, the approach that we are taking is about making sure that at all times we are focused on the creation of sustainability within our public services.”

Mr Swinney said there is no firm figure yet on how many job losses there will be, and said it will become clearer as the government works on its medium term financial strategy.

However, the First Minister ruled out any compulsory redundancies.

This comes after a plan put forward by Kate Forbes when she was finance secretary under Nicola Sturgeon.

Ms Forbes drew up a plan to cut thousands of public sector jobs to bring the number back down to pre-pandemic levels. In 2022 she feared the public sector job losses could be as high as 30,000.

Last summer the current Finance Secretary Shona Robison confirmed a freeze in public sector recruitment in all but “essential frontline” posts.

Mr Swinney’s speech was criticised by opposition politicians in Holyrood.

Michael Marra MSP, Scottish Labour’s finance spokesman, said: “Scotland will see right through this pathetic spin from John Swinney.

Michael Marra MSP and Scottish Labour leader Anas Sarwar. | Jane Barlow/PA Wire

“Labour has decisively ended Tory austerity, boosting funding for the Scottish Government by £5.2bn already and pledging an extra £9bn over the next three years - but SNP incompetence is still holding us back.

“Despite Labour providing record funding for Scotland, our finances are still under pressure because of the SNP’s poor planning, woeful economic failure, and rampant waste.

“This admission of failure from a tired leader out of step with the country confirms that the only way to get a new direction for Scotland is to elect a Scottish Labour government in 2026.

“The SNP cannot be trusted with public money - but a Scottish Labour government will end SNP incompetence and spend public money wisely, making sure that it funds frontline services instead of government bureaucracy.”

Craig Hoy MSP, the Scottish Conservatives’ finance spokesman, added: “John Swinney’s comments are a damning indictment of the SNP government’s financial mismanagement.

Craig Hoy MSP.

“The nationalists have squandered taxpayers’ cash on an increasingly bloated public sector with ever-expanding quangos - and even the First Minister now admits it’s no longer sustainable.

“The Scottish Conservatives have been telling the SNP this for years, but they chose to stick their fingers in their ears.

“Hard-working Scots have been clobbered with ever-rising taxes to pay for this profligacy.

“Now the chickens are coming home to roost for Swinney, the public will have no confidence in him to identify and eliminate waste while protecting frontline services.”

In his speech at Glasgow’s Queen Elizabeth University Hospital, Mr Swinney also committed to the devolved version of pensioners’ winter fuel payments matching the value of the UK benefit.

Earlier this month the Labour UK government said it was reinstating a winter fuel payment of up to £300 for pensioners with an income of less than £35,000 in England and Wales.

There were fears this would leave pensioners in Scotland receiving less money, as the scheme introduced by the SNP would give them only £100 unless they were in receipt of pension credit or over the age of 80.

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However, the First Minister on Monday confirmed that no pensioner in Scotland would receive less money than those south of the Border.

Mr Swinney said: "I can confirm today that no pensioner in Scotland will receive less under the new UK government scheme. The details will be set out soon, but the Scottish Government will always seek to do what's best for Scotland's pensioners."

In his speech, Mr Swinney also said he was "appalled" when the Labour government in Westminster scrapped universal winter fuel payments last summer.

He said: "To be blunt, I don't believe cutting winter fuel payments was ever going to save a penny because making millions of pensioners poorer makes them colder, which makes them sicker.

"That is turn puts up the bill for social services and the NHS."

The First Minister also hit out at Scottish Secretary Ian Murray over how much money would be coming the Scottish Government’s way from the Treasury for the winter fuel payments.

Mr Swinney questioned Mr Murray’s claim that it will be around £250 million.

He said: “We will set out the details about winter fuel payments in due course, but there’s no way in a month of Sundays it will be £250m. I don’t know what Ian Murray was blathering on about.

“Anyone looking at what the UK government was setting out, who then extrapolated £250m, is not one to be relied upon with the sums. It will be much closer to £120m.”