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Scottish Government Spending Review - What does it mean?

The Scottish Finance Secretary Kate Forbes announced the Revenue Spending Review in Holyrood on the 31st May 2022, the first since 2011. That's the spending the government will make on running Scotland.

The document called 'Investing in Scotland Future', set out the spending plans of the Scottish Government between 2022-23 and 2026-27 and set out a planned growth in spending of 5% over the period. For Local Government and the public sector, it is not an evenly balanced %5 growth, some areas will in fact face a reduction in real terms. . One of the stated aims of the review is to keep Public Sector pay at 22-23 levels, a zero pay award strategy for the next 3 three years. Among the targets set are plans for an actual reduction in the public sector workforce This planned reduction was explained by the Finance minister in the following terms:

"After years of growth in the public sector...we need to reset. We need to focus on how the public sector can reform to become more efficient, giving us space to realise our ambitions for better outcomes."

Kate Forbes, Scottish Parliament, 31/05/22

The Scottish Liberal Democrats are committed to improvising local government and democracy, click here for details.

The section of the review titled 'New Deal for Local Government' explains that the plan is for a 7% reduction in Local Government Spending in real terms.

For the public sector groups it means the following:

  • Police and Fire Services, to be offered fixed amount increases, which have already been rejected. This group are legally restricted in how they respond, with the media reporting a 50% drop in those seeking to take up places.
  • Social Care, offered £640m in additional resources but tied to their acceptance of the National Care Review, which will see control of social care and social work moving from the control of locally appointed Chief Officers for Health and Social CAr partnerships to a ministerial appointed Chief. A power grab and threat to local democracy.
    • See the Scottish Lib Dems plans for Social Care, click here.
  • Education [Further and Higerer] will have a flat fixed increase which has already been defined, which will amount to a 9% reduction in funding in real terms.
    • See the Scottish Lib Dem plans for Education, click here.
  • Health, A 2.6% increase in funding over the period of the review. 2022 - 27. Which will fall short of the amounts needed to meet the promised improvements outlined in the Government's plans.
    • See the Scottish Lib Dems Plan for health, click here.

The Fraser of Allender institute says that overall there will be a 7% reduction in government spending the Institute of Fiscal Studies claims it will be nearer 9%. The reality is that the 5% suggested growth figure in the review is untrue. In real terms, the review will oversee a reduction. The recent announcement of a £3.5bn shortfall in the Scottish budget did not explain the facts that, the Scottish Government had a legal requirement to produce a balanced budget, meaning there will be cuts to find that £3.5bn

Scottish Budget 22-23

References:

  • Scottish Government Spending review
  • Fraser of Allander report on the Scottish Spending review
  • Institute of Fiscal Studies, response to the Scottish Spending review