'Short-changed': Scottish Government reacts to Spending Review

Scotland has been "short-changed" by the UK Government spending review, finance secretary Shona Robison has said. 

UK Chancellor Rachel Reeves has said Scotland is in line for the "largest settlement in real terms since devolution was introduced".

The Labour politician said the plan, which includes investment in defence, computing and carbon capture, will deliver an additional £52bn for Scotland.

But the Scottish Government has called the settlement "disappointing", and said that at 0.8 per cent a year for the overall block grant, the allocation for Scotland is lower than that for other government departments.

Robison said: "Had our resource funding for day-to-day priorities grown in line with the UK Government's overall spending, we would have £1.1bn more to spend on our priorities over the next three years. In effect, Scotland has been short-changed by more than a billion pounds.

"This all comes on top of the UK Government's failure to fully fund their employer National Insurance increase, depriving us of hundreds of millions of pounds in funding."

Reeves' review includes more funding for the NHS and housing outwith Scotland, making for a change in the allocation for Scotland under the Barnett formula. 

Defence spending will increase to 2.6 per cent by April 2027, with £250m to be spent on HM Naval Base Clyde – home to the Trident submarine fleet – over three years. 

Meanwhile, the long-awaited Acorn carbon capture project in Aberdeenshire will be given an as-yet unknown amount of development funding. And up to £750m will go to reinstate the University of Edinburgh supercomputer project, which had been shelved by the UK Government after the general election.

Scottish secretary Ian Murray said the Chancellor had "unleashed a new era of growth for Scotland", commenting: "This is a historic spending review for Scotland that chooses investment over decline and delivers on the promise that there would be no return to austerity."

However, Robison said: "We made extensive representations to the UK Government on our priorities for the spending review, including calls for an end to spending that bypasses devolution, but there has been limited opportunity to engage with them. It appears that the continuation of local growth funding, which fails to match the European Structural Funds it was supposed to replace, will come directly from Whitehall, yet again bypassing devolved governments."

The Scottish Government's delayed medium-term financial strategy is expected on 25 June.

Responding to the spending review, the independent Fraser of Allander Institute on economics said: "We have seen Labour MPs and MSPs describing the spending review event as increasing the block grant by £9.1bn over the spending review period. While Barnett consequentials add up to this, it's a figure that is neither transparent nor helpful. It essentially assumes that no additional funding would have been made available for the Scottish Government in cash terms relative to that in 2025-26, which is not a credible baseline.

"A much more insightful – though perhaps less cheery – conclusion from looking at the SFC’s [Scottish Fiscal Commission's] forecast is that by 2028-29, funding will be £0.7bn lower than their central estimate published on 29 May."