FINANCE Secretary Kate Forbes has warned the Scottish Government may have to make “deep cuts” to public services if Holyrood is not handed new financial powers to help recovery from the Covid-19 crisis. 

Ms Forbes said that the current financial arrangements is making it “increasingly difficult” for the Scottish Government to fund its response to the coronavirus pandemic without hitting other others. 

She stressed that it is now “critical” that the Scottish Government is given new borrowing powers, believing this is the only way that ministers could reject a “return to austerity”.

Since the start of the Covid-19 outbreak, ministers have put in place a number of schemes aimed at helping both businesses and communities left struggling because of the pandemic - with Ms Forbes saying cash from the UK Government had provided "about £3.6 billion" of the £4 billion being spent on these. 

READ MORE: Finance Secretary triggers funding row with Westminster

But she has raised concerns that the "costs associated with coronavirus are significantly higher than the consequential funding we have received from the Treasury", warning that the Scottish Government takes on risk by making “funding commitments” which are only “based on estimates from the UK Government”. 

But writing in The Scotsman newspaper, she said: "Our funding needs for the NHS, business and the third sector are greater than the sums provided by the UK Government and, as things stand, the Scottish budget will have to make up the balance. 

"While we have been able to re-prioritise some existing budgets, it is becoming increasingly difficult without impacting on vital public services. 

"The devolved arrangements were not designed for a health emergency and an economic crisis of this scale. 

"With a global pandemic raging, fast decisions on public spending are required and it is critical that we have borrowing powers and greater financial flexibility to respond effectively. 

"Otherwise, the only way the Scottish Government will be able to fund our ongoing response would be to make deep cuts to other services." 

READ MORE: Coronavirus: Kate Forbes blasts 'unnecessary concerns' as councils to get £155m by end of June

She added: "The situation is made even more difficult if promised funding is not delivered, as happened when we were informed that £70 million of funding for businesses and charities would no longer come to Scotland. 

"There is a real risk that this could be repeated on a far larger scale, compounding the need for the Scottish Parliament to have greater fiscal powers." 

"Additional funding is welcome but if there isn't going to be anything further then at the very least we need the powers to manage financial uncertainty and the guarantees of current promises. 

"The Scottish Government will always resist a return to austerity, but only with greatly enhanced fiscal powers can we ultimately reject it."