The Scottish Government underspent its budget by almost £300 million last year despite complaints about a lack of funding from Westminster.

The provisional outturn figures for the 2023/24 show that the government spent £49.3 billion against a total fiscal budget of £49.6bn.

Public finance minister Ivan McKee told MSPs the £292m difference amounted to 0.6% of the budget and was not lost.

He said it would be carried forward into spending for 2023/24. The Scottish Government has a legal obligation to balance its budget every financial year.

The minister said it had been a “significant challenge” to manage the Scottish Government’s financial position.

He said: “The continued impact of persistently high inflation, pressure on public sector pay, backlogs as a result of the Covid pandemic and the ongoing war in Ukraine, combined, have placed pressure on the public finances.

“In addition, inflationary pressures continued to impact households and businesses across the country.”

Mr McKee said with the majority of Scottish Government tied to the decisions of the UK Government, it was “subject to high levels of uncertainty.”

“Whilst the Fiscal Framework was revised in August 2023, and does offer some additional flexibility, we are still unable to borrow to meet day-to-day costs.

“Our income tax powers do not allow changes to be made during the current financial year.

“The only real lever we have to respond to emerging pressures and ensure we balance the budget is to reprioritise current year spending plans.

“No one should underestimate the scale of that challenge - our spending is committed to supporting vital public services.”

He said “careful management and rigorous reprioritisation” meant taxpayers’ cash has been “channelled to where it is most needed.”

The minister said he and colleagues had continued to “proactively drive efficiency savings and to maximise income streams” while also agreeing pay deals with public sector workers and junior doctors.

Earlier this year, Finance Secretary Shona Robison described Jeremy Hunt’s Spring Budget as a “betrayal ” of public services in Scotland.

“This is a budget that is not balanced, and like the Autumn Budget, it is at the expense of investment in public services and particularly on our capital budget,” she said.

“There is not a penny of extra money for capital in Scotland, that’s no extra money for affordable housing or health facilities.

“It is not good for Scotland and I think the judgement of the people of Scotland will be that it is a bad deal for Scotland.”

However, in his statement, Mr McKee told MSPs that £130m of the underspend was in the capital budget, a significant hike from the £24.7m capital underspend the year before. 

Scottish Conservative shadow finance secretary Liz Smith said: “Ivan McKee did not dispute the Fraser of Allander Institute’s assessment that, with the exception of Covid spending, the UK block grant was higher than in previous years.

“Yet he still managed to complain about Westminster funding – even though the SNP’s capital underspend has quadrupled on last year’s figures.

“When it comes to spending taxpayers’ money, the Scottish government got itself into a complete muddle over what EU funds were available to spend and what had been handed back. The SNP should take immediate steps to improve the transparency of public spending as Audit Scotland have requested.”