Shona Robison confirms £500m worth of cuts to public spending

Finance secretary Shona Robison has confirmed £500m-worth of cuts to public services to balance the Scottish budget this financial year.

That total includes £60m of savings from the emergency spending controls she implemented last month, plus an additional £188m of savings across multiple portfolios.

In addition, Robison announced she would release £460m of one-off funding from ScotWind revenue to plug gaps in the budget.

That money was previously earmarked to support the transition to net zero. She said having to use this cash for was “not what I would want to be doing” but without it, further cuts would be required.

Addressing the Scottish Parliament on Tuesday afternoon, Robison said: “Within the current devolution settlement the fact remains that our main lever to remove these pressures in-year is to reduce spending to achieve balance.

“That is why I am setting out today a range of measures to support the 2024/25 budget totalling almost £1bn, of which up to £500m are direct savings.”

The finance secretary went on to blame the decisions on the UK Government, saying the Scottish budget will continue to be “tightly constrained” under Labour.

She has urged Chancellor Rachel Reeves to invest in public services and infrastructure in her autumn statement at the end of October.

But on balancing her budget, Robison said: “If the Scottish Government does not act, spending will continue to outstrip available funding. This is not sustainable and tough decisions will be required.

“Annual savings alone will not address this. All members of parliament must face up to this challenge in the demands they make during the budget process.”

She will set out her own tax and spending plans for 2025-26 to the Scottish Parliament on 4 December.

She said her government would prioritise cash for the NHS in that budget, with a commit to “build on the record funding that we have allocated in the current financial year”.

But outwith the health portfolio, she said the government would “identify and implement opportunities to deprioritise lower impact spend and programmes”.

That will include expanding the Scottish Government’s recruitment freeze to more public bodies and seeking to “maximise efficiencies” in how public bodies operate.

Robison also warned of the impact the cuts will have on capital spending plans, accepting the government “cannot afford all of our capital commitments”. She said the government would instead focus on delivering “essential maintenance” of infrastructure.

In a letter to the parliament’s finance committee, she confirmed £115.8m of the £188m of portfolio savings will be made in health and social care, including £18.8m less for mental health services.

Transport will see a reduction of £23.7m, all coming from active and sustainable transport plans (including the reintroductions of peak rail fares), while the net zero and energy portfolio has found savings of £23.4m, largely coming from additional income from Scottish Water interest on voted loans.

Scottish Conservative economy spokesperson Liz Smith said the spending announcements were a result of Scottish Government actions, not decisions taken at Westminster.

She also said it was “time to review universal payments”.

Scottish Labour’s Michal Marra said the statement proved the SNP was “incompetent and wasteful”.

He added: “Scots are left paying more and getting less and today’s statement guarantees that this cycle of short-term sticking plaster politics will run and run.”

Economists at the Institute of Fiscal Studies said that while funding from the UK Government remains “very tight”, the Scottish Government “isn't blameless” for today's announcements.

David Phillips, head of devolved government finance at the thinktank, said the government could have “held back funding” for public sector pay deals at the start of the year, when it was clear substantial increases were be needed. This would, he said, have avoided the need for in-year cuts.

He also said the decision to freeze council tax increases pressure on the budget, because the policy “cost almost double the amount raised from increases in income tax rates on higher earners”.

Phillips added: “As the Scottish Fiscal Commission has highlighted, the last few years have seen the Scottish Government increase public sector pay, and roll out new, more generous social security benefits. These are legitimate things to prioritise. But they do reduce the amount available for other areas of spending and add to budgetary pressures. Previous pay increases, which were more generous than in England, also mean higher pay levels – increasing the cost of further increases.

“More difficult decisions are likely next year and beyond given the different fiscal outlook. The Scottish Government should use its forthcoming Budget and subsequent Scottish Spending Review to be clear about priorities – and which areas will see cuts – in order to reduce the need for in-year cuts, which are often more damaging.”

Speaking to the press afterwards, the finance secretary said these decision had to be taken because the Scottish Goverment had no way to manage in-year "headwinds".

She said: "Fundamentally, devolved governments don't have levers in-year to be able to take on these headwinds. We have one main lever, and that is spending controls. I would like additional levers, and that's something we're talking to the UK Government about."