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Scottish Government revises budget to take account of COVID-19 spending

Kate Forbes - Image credit: Anna Moffat/Holyrood

Scottish Government revises budget to take account of COVID-19 spending

The Scottish Government has revised the budget to include the money spent on countering the effects of the coronavirus pandemic.

The budget revision allocates £4.01bn of expenditure to the COVID-19 emergency.

This includes a £2.3bn package of support for business, an extra £620m for health and care services and £358m for transport.

This doesn’t include coronavirus funding spent directly by the UK Government such as the furlough scheme.

Most of the extra spending has been funded by a £3.5bn increase in the block grant Scotland receives from the UK Government, which is made up of Scotland’s share of UK COVID-19 spending, as well as £112m of Barnett consequentials from the last UK budget.

Some of the extra £4.01bn of spending commitments is being offset by re-allocating £255m of planned expenditure from Scottish Government and by an extra £972m of income from non-domestic rates, leaving a net increase of £2.78bn in the Scottish Government’s 2020-21 budget, from £49.25bn to £52.03 bn.

Finance Secretary Kate Forbes said: “I must stress that this is a snapshot of spending to date. The situation is still developing and further action will be required.

"We have very limited room for manoeuvre within our own budget, which is why I will continue to make the case to the UK Government for an increase in both funding and flexibility to allow the Scottish Government to respond fully to this crisis.

"Significant budget challenges lie ahead and work is underway to ensure that Scottish Government resources are targeted at stimulating a safe, swift and sustainable recovery for our public services and our economy.

“We have produced this additional budget revision to provide complete transparency about how our COVID-19 response funding is being spent and where it is coming from.

“It will be many months before a full picture emerges and a further update on the funding position will be provided in the autumn.”

The Scottish Conservatives said the revised budget showed the importance of the “broad shoulders of the UK”.

Scottish Conservative shadow finance secretary Donald Cameron said: “This shows just how committed the UK Government is to supporting Scotland through this crisis.

“Essentially, nearly 90 per cent of the extra funding detailed in this document has been provided by the broad shoulders of the UK, and that’s before any account is taken of the very significant financial support in the shape of furloughing and other sums from the UK Government.

“It’s evidence that, in times of real crisis, the UK sticks together remarkably well.

“And as a result, when this is all over, hopefully all four nations will be able to emerge from the pandemic ready to face a brighter future.”

Labour and the Greens called for a debate in parliament to provide accountability for the changes.

Scottish Labour deputy leader and finance spokesperson Jackie Baillie said: “The decisions made in this year’s budget revision will have a long-lasting and deep impact on Scotland’s economy and as a result on the lives of many people.

“The amount of money being ‘re-prioritised’ from ministerial budgets gives a headline figure but no detail on what the impact will actually be.

“The reasons for cutting budgets must be explained directly to parliament.

“The Scottish budget is facing the twin threat of a collapse in income and skyrocketing expenditure.

“In light of this threat it is vital that the SNP government engages with other parties in order to safeguard our economic future.

“We already know from the medium-term financial strategy that a £1bn black hole exists at the heart of the Scottish Government’s finances.

“All must be done to ensure that the economic decisions being made now do not exacerbate the underlying weakness in our finances.”

Scottish Greens co-leader Patrick Harvie said: “This is far bigger than a normal in-year budget revision, for understandable reasons.

“When the Scottish budget was passed nobody had predicted the scale of the crisis we’ve been living with, and the impact on public services and the public purse. But given the scale of these changes they clearly need far greater scrutiny than in previous years.

“Both the immediate use of the additional funds, and the longer-term challenges in developing a fairer and greener recovery, need full debate in parliament if we’re going to hold a minority government to account and ensure that Scotland can build back better from this crisis.”

Read the most recent article written by Jenni Davidson - Two SNP parliamentarians call for national day of mourning for victims of coronavirus

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