Tag: financial strategy

Targeting funding at frontline services

Financial strategy and action plan published

Savings rising to £2.6 billion in 2029-30 will ensure funding can be targeted at frontline services such as the NHS, social security, action to eradicate child poverty and other priorities.

Under the five-year Medium Term Financial Strategy and Fiscal Sustainability Delivery Plan the Scottish Government will:

  • increase value for public money, with affordable and sustainable investment plans set out through a Scottish Spending Review in December
  • improve efficiencies and productivity across the public sector by using more technology and automation while improving collaboration between public bodies
  • reform public services, doing more with available resources and prioritising people with the greatest need
  • reduce the public sector workforce by an average of 0.5% every year until 2030 while protecting frontline services
  • invest in preventative measures to reduce demand on services such as health, social care and justice

The strategy and action plan also include measures to support sustainable, inclusive economic growth and ensure a strategic approach to tax policy that considers longer term impacts and competitiveness.

Finance Secretary Shona Robison said: ““With the world facing profound economic uncertainty this Medium Term Financial Strategy is being published in deeply challenging circumstances. Those challenges have been exacerbated by the actions of the UK Government, whose decisions continue to have serious consequences for the delivery of our public services.

“Managing the impact of Westminster austerity is all too familiar. In spite of this we continue to invest in the people of Scotland, supporting a better paid public sector, delivering high-quality public services and providing welfare support that is not available in other parts of the UK. And we have done this while delivering a balanced budget every single year.

“Fiscal sustainability is about more than balancing the books – it’s about delivering value, driving reform and making strategic choices that support long-term growth. By focusing on efficient public spending, modernising services, growing our economy and taking a strategic approach to tax, we can build a stronger, fairer Scotland.”

Medium Term Financial Strategy 2025

Fiscal Sustainability Delivery Plan 2025

Tough decisions: Scottish Government publishes financial strategy

Plan to grow economy, target spending and deliver progressive tax system

Economic growth, progressive taxation and spending plans that unapologetically target those in greatest need are at the heart of a financial strategy announced by Deputy First Minister Shona Robison.

The Medium-Term Financial Strategy outlines the approach to ensuring Scotland’s finances are on a sustainable footing and delivering high-quality public services in the face of high inflation. This includes:

  • growing the economy, including by delivering on ambitious commitments on childcare, seizing opportunities in areas where Scotland has a competitive advantage and supporting entrepreneurs, start-ups and scale-ups
  • taking tough decisions around spending, focusing on what is needed to achieve the missions of equality, opportunity and community
  • updating the tax strategy, with a new advisory group to be established this summer and chaired by the Deputy First Minister

The strategy details the tough choices required in challenging financial circumstances. Scottish Government estimates indicate that due to inflation, pay increases and the lack of further funding from the UK Government, current resource spending requirements could exceed funding by £1 billion in the next financial year, and by £1.9 billion in 2027-28.

The gap between capital spending commitments and funding could rise to 16% in 2025-26.

Ms Robison said: “We are steadfast in our commitment to tackling poverty, building a fair, green and growing economy, and improving our public services to make them fit for the needs of future generations.

“But we must recognise that our current financial situation is among the most challenging since devolution, driven by the Covid pandemic, the war in Ukraine and the recent period of high inflation.

“Our funding remains largely based on decisions made by the UK Government, but they have failed to take the steps required to inflation-proof our budgets, and their decisions from Brexit to the disastrous mini-budget have made matters worse. This is creating substantial pressure on our public services, which we have no choice but to address.

“Today I have outlined our strategy for managing these challenges, doing all we can within our powers to ensure public finances are on a sustainable path. We will have a laser-like focus on spending, ensuring it targets equality, opportunity and community.

“We will generate economic growth, supporting businesses to invest and create new jobs while increasing tax revenues to invest in better public services. And we will continue to build the most progressive tax system in the UK, ensuring the burden of taxation is placed on those with the broadest shoulders.

“There can be no escaping the difficult choices ahead, but by following the plan outlined today we can provide a more prosperous and fairer future for the people of Scotland.”

Responding to the statement, STUC General Secretary Roz Foyer said: “The Cabinet Secretary for Finance is in a slightly better budgetary position than was predicted this time last year. However, she rightly points out that UK Government austerity and its manufactured cost-of-living crisis continue to hit Scotland hard.

“However, this is not an excuse for inaction. There is a worrying lack of ambition from the government ministers which cannot be condoned.

“Tax reform cannot be kicked down the road for another year. To protect services and pay, the Scottish Government must make good on the First Minister’s pledge to leave no stone unturned in seeking to raise additional income by rebalancing wealth. This means committing now to the policy changes required to introduce wealth and property taxes as the STUC has advocated.”

The Deputy First Minister’s statement to the Scottish Parliament