Scottish budget timing process 'not ideal', says economic watchdog

The timing of Scotland's budget – two months before the publication of Chancellor Rishi Sunak's spending plans – is “not ideal”, the UK’s public spending watchdog has said.

Kate Forbes will publish her budget at Holyrood on Thursday

The gap means the Office for Budget Responsibility (OBR) will have to set out its forecasts for the year ahead weeks after Scotland's estimated tax take for 2021/22 is unveiled on Thursday by the Scottish Fiscal Commission (SFC).

Scottish finance secretary Kate Forbes will publish her budget at Holyrood on Thursday, but has been critical of the fact she must do so two months before the UK Budget.

She claims she is in the dark about the full extent of the resources available to her because Scotland's "block grant" allocation will only be set out by Mr Sunak in March.

It also has an impact on the economic forecasts which are published alongside the respective Scottish and UK budgets.

Scotland's economic watchdog, the Scottish Fiscal Commission, will set out its estimates for the Scotland's income tax take in 2021/22 when Ms Forbes publishes her budget.

This will come two months before the OBR unveils its own estimates for November that set out the necessary "adjustments" to Scotland's block grant from Westminster.

Richard Hughes, chair of the OBR's budget responsibility committee, told Holyrood's finance committee this is not the norm.

"It's a bit unusual for the SFC to be going first and us to going second," he said.

"That's probably not an ideal sequence to be frank, but we're not in ideal circumstances."

Mr Hughes described the situation as a "necessary artefact" of the impact of coronavirus, which has seen massive fiscal interventions from the UK Government to try to stabilise the economy.

"In normal times it would not be ideal for a sub-national government to be producing it's fiscal forecasts before it gets an updated view of what the national picture looks like," he said.

Mr Hughes said the SFC would be able to take into account the latest information available when it produces its forecasts and this will be taken into account when the OBR produces its forecasts in March.

The UK Government has insisted Ms Forbes has access to enough information from the recent spending review to able to set a budget.

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