John Swinney has said he will be forced to make hundreds of millions of pounds worth of cuts to Scotland’s budget this year due to the surging costs of public sector pay deals.
Speaking to STV News ahead of his party’s conference on Friday, the First Minister said he has “no choice” but to balance the Scottish Government’s books by slashing services by at least £250m.
He said ministers were “wrestling with very significantly higher pay demands than we anticipated”.
He added that cash would need to be found within existing budgets.
It comes after the independent Scottish Fiscal Commission (SFC) said the Scottish Government was to blame for “much of the pressure” on the nation’s finances.
This included public sector pay deals in Scotland that were more generous than other parts of the UK, alongside spending on social security and former first minister Humza Yousaf’s council tax freeze.
Scottish GovernmentPrime Minister Keir Starmer also said this week that “painful” cuts are on the way across the UK, warning that “things will get worse before they get better”.
The SFC said “significant uncertainty” around UK Government funding also played a role in Holyrood’s financial struggles.
Speaking to STV News Political Editor Colin Mackay on Thursday, Swinney said he will have to squeeze this year’s budget.
He said: “The challenge we’ve got during this financial year is that we are wrestling with very significantly higher pay demands than we anticipated.
“We’ve got to find that money from within our existing resources and as we work our way through the year we are trying to get to a position of greater financial certainty.
“And this is a crucial point, the Scottish Government has to balance its budget, we’ve done that every year since 2007 – we have no choice.
“We’ve got to do it this year and we have to make a set of decisions to make that the case”.
The First Minister admitted that whilst an exact figure is not yet known it would be at least a quarter of a billion pounds.
Asked if hundreds of millions would have to be cut from other budgets to fund these pay deals, he confirmed: “That’s correct, yes.”
Asked if that could be at least £250m, he said: “Yes”.
iStockBut he said more details will be set out next Tuesday ahead of the programme for government on Wednesday.
The FM has come under pressure from artists such as Paolo Nutini and Biffy Clyro to reverse the decision to close Creative Scotland’s open funds.
Swinney said he would “explore” if Scotland could keep the fund open, and said Creative Scotland already benefits from £50m in funding.
That came as part of a measure of emergency spending curbs by finance secretary Shona Robison.
Finance secretary Shona Robison said she had saved £10m by pausing funding the rollout of free iPads and laptops for those who are “digitally excluded” in Scotland.
The cash will be used to help fund the cost of council pay deals which will cost around £77.5m.
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