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by Kirsteen Paterson
02 November 2022
John Swinney confirms Scottish Government budget cuts

John Swinney confirms Scottish Government budget cuts

Deputy First Minister John Swinney has confirmed more than £1bn of "savings" in his emergency Budget review.

In September, the acting finance secretary announced £560m worth of reductions. Now he has revealed details of a further £615m worth of cuts.

Swinney said the demands for pay rises in the public sector are "legitimate" but "the Scottish Government budget is largely fixed" and "inflation means that our annual budget today is worth £1.7bn less than when it was published last December".

A total of £400m will be reprioritised within the health and social care budget, including £116m previously allocated in relation to Covid testing and other measures. 

Another £65m of changes related to primary care, £38m has been cut from the mental health budget and a "vacancy freeze" and other changes to Scottish Government operations are set to save £21m.

They are decisions we are compelled to make

Swinney said these are "not decisions we would wish to make, but in the absences of additional funding from the UK Government, they are decisions we are compelled to make".

He told the chamber: "They ensure a path to a balanced budget, whilst also prioritising fair public sector pay offers and recognising that this is critical to the delivery of key public services."

"We're having to do this because of the severe financial pressure applied to us by the mismanagement by the United Kingdom Government of the public finances and the economy, where inflation has been allowed to rage rampant across our society," he said under questioning about the impact of the changes. "Those are the hard choices that we have got to address as we deliver on the expectations of members of the public."

Swinney, who is acting finance secretary during Kate Forbes' maternity leave, said "calamity" caused by UK Government "inactivity" became more "disastrous" through the mini-Budget, which "sent shockwaves throw the markets, driving up borrowing costs for government, businesses and households".

He said: "The utterly needless upheaval has created significant damage for individuals and great uncertainty for Scotland's finances. Initially, the Scottish Government was told that we would receive an additional £660m through the Block Grant adjustment. Now, with the new chancellor scrapping the plan to cut the basic rate of income tax in the rest of the United Kingdom, our funding will be reduced by £250m over the period of the UK spending review. This represents a swing of almost £900m in the space of less than a month.

The choices this government has made are manifestly wrong

"Under a new prime minister and the new chancellor, calamity is giving away to austerity with deep spending cuts expected."

Chancellor Jeremy Hunt has delayed his fiscal statement until November 17.

Lib Dem leader Alex Cole-Hamilton questioned Scottish Government priorities, saying: "Make no mistake, we're here in large part because of the calamitous decisions by the Conservative government. They've added hundreds of pounds to people's mortgages and it is unforgivable. That's why we need a general election. 

"But the choices this government has made are manifestly wrong as well. Irrespective of when that £20m is allocated for, we're still spending civil service time and money on the production of constitutional papers, £17m on national testing every year and up to £1bn on the ministerial takeover of social care, all the while councils are being squeezed to the pips, long Covid sufferers continues to struggle without, and £38m is being stripped from mental health."

Health secretary Humza Yousaf said "every single penny of health funding we have had to re-profile will stay within [the] health and social care portfolio". He said there are "no easy decisions" and steps were required to deal with the impact of "ensure we can offer [a] record pay deal for staff".

Scottish Labour finance spokesperson Daniel Johnson said: "The Tories' economic vandalism has pushed things to crisis point, but years of low growth and mismanagement from both our governments has laid the groundwork for this perfect storm."

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