Public sector job cuts loom as Scottish Government faces £2.6bn black hole

Scotland’s public sector workforce is to face five years of annual cuts as ministers work to avoid a £2.6bn black hole.

A “managed reduction target” will look to reduce headcount every year until 2030 as ministers try to reduce spending through a wider-scale public service reform strategy.

But union leader Roz Foyer said it could cost as many as 10,000 jobs.

She said: “We know Scottish ministers face fiscal constraints, but we need vision and political courage to build a better Scotland. Unfortunately, today ministers have chosen to cut public services rather than use their powers to help redistribute wealth, tackle inequality and invest in our collective future.”

Finance secretary Shona Robison said ministers will “protect valuable frontline services and continue to offer a progressive pay policy”.

But, in a ministerial statement on the government’s Medium-Term Financial Strategy (MTFS), published alongside its Fiscal Sustainability Delivery Plan, she said change was essential.

Robison said: “The Chancellor has set out the approach to achieving fiscal sustainability for the UK – with all departments to deliver at least five per cent savings and efficiencies by 2028-29.

“Within this, there are reductions in administration budgets of at least 11 per cent in real terms by 2028-29, and 16 per cent in real terms by 2029-30.

“We require to take similar actions, as without doing so the forecast gap between funding and spending in Scotland could reach £2.6bn for resource and £2.1bn for capital by the financial year of 2029-2030.”

“Natural attrition and recruitment controls” will see the public sector workforce fall by an average of 0.5 per cent each year over the period.

The publication of the MTFS was delayed and Conservative Craig Hoy said that by “slipping this out” just days ahead of summer recess, parliament had “little time” to scrutinise the document.

Robison said the document was being presented in “deeply challenging circumstances”, with the world facing “profound economic uncertainty”.

She claimed UK Government funding decisions had exacerbated Scotland’s financial woes, with decisions like the implementation of the increase to employers’ National Insurance contributions creating “serious consequences” for the delivery of public services.

The NI move alone created a £400m problem, Robison said, with UK Government funding for day-to-day spending expected to rise by 0.8 per cent in real terms over the next three years.

She said the allocations from Westminster “simply do not reflect the unavoidable realities of the demands that will be placed on public services by the demographic challenges we face, not least through an ageing population”, and cost increases resulting from Brexit.

However,  Scottish Labour finance spokesperson Michael Marra accused the SNP administration of having “spectacularly mismanaged Scotland’s budget” and making “huge reductions in frontline workers” to “mitigate their incompetence”.

He said: “All of this comes at a time when A&E waiting times are atrocious, cancer waiting times are at their worst point on record, ministers are admitting lives are being lost, domestic abuse statistics are at record high, and housebuilding rates are plummeting.”