Warnings for Scotland's budget ahead of Autumn Statement

Cuts expected to be laid out in Chancellor George Osborne’s Autumn Statement and Spending Review today are expected to impact Scotland’s finances.

Osborne will set out today how he intends to make £20m of spending cuts and £12bn of savings on welfare.

Think tank IPPR Scotland released figures which predicted non-protected government departments in Scotland could see their budgets fall by over a tenth by the end of the Spending Review period, 2019/20, because of how cuts would affect Scotland’s funding arrangement.

Director Russel Gunson said: “We estimate that the Scottish budget as a whole is likely to drop in real terms. However, with announced increases in NHS funding and for affordable housing and childcare, we see that spending in unprotected departments in Scotland could drop significantly, seeing billions of pounds of spending cuts.”

Proposed cuts to tax credits have worried charities and unions. Yesterday charity umbrella group Parenting Across Scotland showed cuts to tax credits and working hours were already having a detrimental effect on household finances, with single parents finding it harder to cope.

And more than 197,000 working families with children across Scotland who receive tax credits could between them lose around £257m if the commitment to cut tax credits is upheld, according to research by UNISON.

The union’s general secretary Dave Prentis said: “The Lords might have forced a reluctant Chancellor to think again, but we’re not out of the woods yet. Tax credit cuts have not gone away, far from it. Even if the Chancellor announces a pause to their introduction today, it will only be delaying untold financial misery for working families.”

Scotland’s Finance Secretary John Swinney said he expected Osborne to make a “significant real-terms cut to Scotland's budget”.

The Deputy First Minister said the Scottish Government would take “a distinctive approach” using new powers coming to Scotland via the Scotland Bill.

"We will continue to do everything within our power to protect the most vulnerable from the UK government's austerity measures, but we want to use our powers and resources to lift people out of poverty, not just continually mitigate as best we can," he said.

Shadow Scottish secretary Ian Murray said Scottish labour would use the new powers to restore lost tax credits money “in full”.