John Swinney will need to make “significant spending reductions” to balance the books, the Scottish Government’s most senior civil servant has warned.
Appearing before the Finance and Public Administration Committee on Tuesday, John-Paul Marks, the Permanent Secretary, budget-setting process this year would be one of the hardest in the history of devolution.
The mandarin was speaking to MSPs just hours after Finance Secretary Shona Robison announced the delay the SNP’s medium term financial strategy and tax plans.
She said they would be pushed back until June 20 due to the change in First Minister.
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Mr Swinney is due to make a statement to parliament tomorrow to set out the direction of government.
During Mr Marks's appearance at the committee, he was asked by Labour’s Michael Marra about his conversation with the new First Minister.
“Have you told him that there is going to have to be significant spending reductions when we hear this update from him as regard to his programme? Is that what we should be expecting as a parliament?” he asked.
“I have already done that, yes,” the Permanent Secretary said.
He added: “It is a risk, and it needs to be carefully addressed and I expect the Finance Secretary will say a lot about this in June when she sets out her medium-term fiscal strategy.”
Mr Marks went on to say: “I have been very open that I consider fiscal sustainability to be a significant risk that needs active mitigation now, and that has been underway through 2022-23 with the emergency budget review, through 23-24 as well where we used a set of very significant set of controls to reduce our outturn.”
He said high inflation, backlogs caused by the pandemic and a real terms fall in the capital block grant, meant the “right choices” had to be taken to balance the budget.
“Budget 24-25 did that, but it was, I’m sure for all concerned, one of the hardest experiences of prioritisation that we’ve been through under devolution,” he added.
Speaking to journalists, a spokesman for the First Minister later said: “I don’t think it’s a secret that we’re under significant pressure.
“The First Minister himself has said that in the chamber – that’s obviously been a reality for some time. We’ve had 14 years of austerity, that’s the way it is.
“Obviously inflation and other issues in the economy are causing problems.”
The announcement that the first fiscal event of Mr Swinney’s administration will take place just over a week before the summer recess drew the ire of committee convener Kenneth Gibson.
He said it would have been understandable had there had been a change of Finance Secretary, but Ms Robison is staying in post.
“I think there will be disappointment across the committee… surely sending something along the lines that the strategy will not come out until Thursday June 20 is not really acceptable from a scrutiny point of view?” he said.
“It makes it extremely difficult for clerking teams to get papers out to members, let alone for members to absorb it to have any meaningful strategy in our last committee meeting on the Tuesday before recess.”
Mr Marks said he would “take that message back” to ministers, adding: “Events in the last two weeks are such that we have a new First Minister, a new Deputy First Minister, a new cabinet.”
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Mr Marra said “This revelation from the Permanent Secretary exposes just how precarious Scotland’s public finances are.
“Successive SNP Governments and Finance Secretaries, including the current First Minister, have pushed the public finances to breaking point.
“Their recklessness means that frontline services for the most vulnerable now face swingeing cuts.
“In his statement to Parliament tomorrow, the First Minister must come clean with the people of Scotland as to how he will fix the SNP’s culture of financial incompetence and get the public finances back on track.”
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