Scottish budget: Could the first be Humza Yousaf's last?

It’s been a year of firsts at Holyrood, especially for the SNP. 

The first leader from an ethnic minority background, the first arrests in Operation Branchform, the first time the party has looked electorally mortal in office.

Now comes another first, and a very important one it is too.

Humza Yousaf’s first budget is due on December 19.

The draft £60bn package for 2024/25, including income tax rates and thresholds, will be delivered by the First Minister’s trusted deputy, Finance Secretary Shona Robison.

Following Mr Yousaf’s surprise promise to freeze council tax next year by paying councils not to raise it, the budget should also include the headline cost for that.

After a painfully bumpy start to his time at Bute House, the last thing the First Minister needs is for the set-piece occasion to turn into another problem.

However, while the SNP-Green deal means the budget is sure to pass in the New Year, it is clearly not going smoothly.

After Chancellor Jeremy Hunt set out his autumn statement last month, Ms Robison declared it was a “worst case scenario for Scotland”.

This was largely because Mr Hunt prioritised National Insurance cuts and tax breaks for business ahead of spending on public services.

Spending on the NHS in England was forecast to “crawl up from £161.1bn to £162.5bn in cash terms” next year, according to the King’s Fund think tank, meaning a real terms cut.

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In previous years, extra spending on the NHS south of the border resulted in a Barnett formula boost for Holyrood. 

This time, it’s £10.8m more, negligible next to our health and social care budget of £19.1bn. 

That is bad news for a Scottish Government which had been hoping the Barnett formula would help it cover a host of recent public sector pay deals, including in the NHS – £1.75bn worth this year, around £800m more than anticipated, and with more expected in 2024/25.

A sign of the Scottish Government’s difficulty in coping with the autumn statement came on Tuesday, when the Scottish cabinet met to finalise the budget. Except it didn’t. 

Faced with soaring spending and piddling revenue increases, ministers found themselves unable to “square the circle”. 

There will now be a highly unusual second budget this week at 6pm on Thursday. 

The discussions may have to continue on Monday, when the cabinet has one of its periodic meet-the-voter days in Haddington in East Lothian.

The politics of this could, in theory, work to the SNP’s advantage. 

That’s certainly what some in the party are contemplating. 

Mr Hunt’s misguided decision on cutting tax and stiffing public services shows just how economically warped and morally degenerate the Tories have become, goes this theory.

And in pledging to follow his lead, Labour are just as bad.

Welcome to Brexit Britain, where nothing works and there’s never enough money. Can we interest you in a refreshing glass of independence?

Like I say, that’s the theory, and a pretty optimistic one.

The Scottish cabinet failed to finalise the budget, resulting in a rare second budget (Image: Newsquest)
Another way things could go is for the budget to become increasingly problematic and for the opposition at Holyrood to cite it as further evidence of SNP-Green incompetence.

It’s not as if the Scottish Government hasn’t been warned about its finances, after all.

The Scottish Fiscal Commission, Auditor General for Scotland and Holyrood’s finance committee have all flagged up a £1bn shortfall in income in 2024/25.

The Commission has also warned repeatedly about the ballooning of devolved benefits – ministers love to boast of their generosity but are slower at paying for them.

While the Finance Committee has drily voiced its concern that “affordability does not appear to be a key factor in Scottish Government decision-making”. 

It all fuels the impression of a spendthrift administration that now faces a reckoning, probably meaning tax hikes for you and me.

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As ministers have long bragged about their ability to balance the books, any sudden loss of that knack will be pinned on Mr Yousaf and Ms Robison, even if the bad habits are old ones. 

True, Mr Hunt may have a pre-election splurge in the spring that brings extra funding for Holyrood, particularly if he cuts income tax.

That possibility offers some hope, and will encourage Scottish ministers to stretch and defer their spending plans rather than amputate parts of the public sector in a panic.

But December 19 remains a hazard for Mr Yousaf – a broken budget is unforgivable – and his critics are waiting to pounce.