MAREE TODD: Bleak picture for Scotland's finances ahead of budget
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Holyrood Notebook by Maree Todd
The last week of parliamentary business before the Christmas break will see the Deputy First Minister deliver a statement on the Scottish Budget, marking the first stage of the budget's progress through parliament.
While budget time is never without its challenges, the recent Autumn Statement from the UK government has painted a very bleak picture for Scotland’s finances.
Scotland needed investment in the services that people rely on and in infrastructure vital to the economy. Instead, the Chancellor chose to cut National Insurance and deprive public services of crucial funding.
Financial support for fuel poor households was also neglected in the statement. Already this winter, I've heard from many constituents who are struggling to keep their homes warm.
With energy bills almost double what they were in 2021, ensuring folk are warm and healthy this winter should have been a priority for the UK government. It is astonishing that the Chancellor did not see that, and chose not to provide crucial, life-saving support for vulnerable households.
This decision will have a significant impact on my constituency and throughout the Highlands, where fuel poverty rates are higher than the Scottish average.
It was interesting, and revealing, to listen in on the recent Finance and Public Administration Committee meeting in the Scottish Parliament, where senior finance chiefs from the Office of Budget Responsibility (OBR) presented evidence. It was here that the consequences of UK government decision making on Scotland were laid bare.
The starkest comment of all related to the level of UK debt, which is nearing £3 trillion – three times more than it was at beginning of the century. Dr Richard Hughes of the OBR highlighted that if debt servicing were treated as a UK government department, it would be the second largest after the national health service.
The decision to deliver tax cuts over increased spending for public services will have grim consequences across the UK, including in Scotland.
The Barnett formula – the mechanism which decides the funding for Scotland and the other devolved administrations – is determined by spending in England. So, when public spending goes down in England, the implication is fewer real increases in Barnett consequentials for Scottish departments.
Combined with the UK government’s decision to freeze total capital spending – a move OBR officials emphasised would be detrimental to economic growth if maintained – Scotland's finances are placed in a worst-case scenario.
Financial mismanagement at the hands of the Tories has put avoidable strain on households, businesses, and public services. While the Scottish Government may be left with limited resources for its own priorities, it remains committed to presenting a budget aligned with its core missions of equality, community, and opportunity.
Since this is my last column of 2023, I would like to take the opportunity to wish all my constituents a very merry Christmas and a happy and healthy new year.
As always, please do not hesitate to get in touch if there is anything I can do to assist you. I can be contacted by email on maree.todd.msp@parliament.scot or by telephone on 01349 888281.
- Maree Todd is the SNP MSP for Caithness, Sutherland and Ross.
