Public services reform in face of cost of living crisis, warns Forbes

Finance secretary Kate Forbes has said Scotland’s public sector will need to reform in the face of an “unprecedented cost of living crisis”.

Speaking at Holyrood, she set out the Scottish Government’s resource spending review – the first time a multi-year programme has been laid out since 2011.

She told MSPs reforms would focus on areas including digitalisation, the public sector estate and improving public procurement.

“The UK Government has chosen not to act on public sector pay, meaning our more progressive approach, with public sector wages on average 7% higher than where the UK Government is the employer, is funded from within our severely limited budget,” Forbes said.

“We do not intend to take the same approach as set out by the UK Government today, but we do need to reshape and refocus the public sector post-Covid and the spending review calls upon all of the public sector to look creatively at ways to sustainably address that challenge, while seeking to ensure fair increases.”

Against the backdrop of the cost of living crisis, skyrocketing inflation, the recovery from the Covid-19 pandemic and the largest decline in living standards since the 1950s, Scotland faces a summer of discontent as public sector workers across a slew of industries consider sweeping strike action over a series of pay disputes.

UK inflation increased to nine per cent in the 12 months to April, up from seven per cent in March. It was the fastest measured rate since records began in 1989, and the Office of National Statistics (ONS) estimates it was the highest since 1982.

Research, carried out by Glasgow University and the Glasgow Centre for Population Health, has suggested people across the UK are dying younger as a result of austerity.

Forbes said inflation has limited the Scottish Government’s funding increases.

She told MSPs: “Following a real-terms reduction of 5.2% between last year and this, our real terms funding grows by only 2% across the whole four-year period, after accounting for the devolution of social security benefits.

“That is the stark reality – reflected in the commentary by the IFS and Fraser of Allander Institute last weekend.

“But it is not inevitable – it is the result of a deliberate choice by the UK Government – as they sit on their hands.

“While the chancellor has provided welcome, if limited support for households, the chill winds of Tory austerity are blowing when it comes to spending on public services.”