Shona Robison will update Holyrood early next month on plans for major public sector cuts to 'address profound financial pressures' the Scottish Government is facing.

The finance secretary is to tell MSPs what "urgent action" is to be taken to address the crisis.

In a letter to the finance and public administration committee, Ms Robison said it was necessary to "reduce expenditure to deliver sustainable finances particularly as it was unclear whether the UK Government would fully fund its public sector pay deals".

She said she is working closely with counterparts in Wales and Northern Ireland, along with the Chancellor of the Exchequer and the Chief Secretary to the Treasury, to ensure that all avenues are explored to navigate the financial challenges in the months and years ahead.

In her letter to committee convener Kenny Gibson, she said the Scottish Government is facing "a very challenging environment as we manage our finances through the current financial year" and set its budget for 2025-26.

"I am working with my Cabinet colleagues to agree the necessary actions to reduce expenditure and ensure our finances are on a sustainable footing. Further to this, additional measures are now necessary following the UK Treasury’s recent audit of public spending and lack of clarity over whether their decision to deliver Pay Review Body recommendations will be fully funded," she said.

"Over the last few weeks, the Scottish Government has set out that we had no choice but to replicate the UK Government’s decision to restrict eligibility for the Winter Fuel Payment to older people.

"The Scottish Government has also introduced a set of spending controls with the intention of further reducing spend in 2024-25. In addition, I am working closely with my counterparts in Wales and Northern Ireland, along with the UK Chancellor of the Exchequer and the UK Chief Secretary to the Treasury, to ensure that all avenues are explored to navigate the financial challenges we face in the months and years ahead."

She said she would forward a full update to Parliament in early September where she would set out "in detail the scale of the fiscal pressures that we are facing, in 2024-25 and beyond, and the action the Scottish Government is taking to address this challenge."

Ms Robison last week confirmed a public sector recruitment freeze in all but “essential frontline” post saying the government had been forced to take the decision in a bid to find cash for pay demands.

Earlier this month, with the threat of refuse and recycling workers going on strike, leaving bins unemptied, ministers agreed to extra money for councils to allow them to offer a 3.6% increase for all grades, with a rise of £1,292 for the lowest paid, equivalent to 5.63%.

Speaking to the BBC, Ms Robison said she would need to take "exceptional measures" to pay for the hike. The minister blamed the UK Government.

In a statement to the Commons last month, Chancellor Rachel Reeves said her government would accept the recommendations of public sector pay review bodies for a 5.5% wage rise.

However, she said a third of the £9.4 billion necessary to fund the hike would come from savings, with government departments told to tighten their belts and stop non-essential spending.

Had the pay deal been paid for by new money, or borrowing then Ms Robison would have had corresponding consequentials for all £9.4bn.

But because only two-thirds is coming from new money, the Scottish finance secretary will have to find her own efficiencies to pay for the remaining third.

The situation led some economists to say the Scottish Goverment could have planned more prudently and anticipated the public sector pay rises earlier this year when it set its budget.

Responding to Ms Robison's letter today Scottish Conservative shadow finance and local government secretary Liz Smith MSP said: “Shona Robison’s imminent spending cuts are entirely of her party’s own making.

“The SNP finance secretary will continue to try and point the blame elsewhere, but after 17 years of financial mismanagement, the nationalists have nowhere left to hide.

“Despite being in receipt of record block grants, they have squandered money on a colossal scale on their own pet projects, rather than on Scotland’s real priorities.

“Now our already overwhelmed public services and some of our most vulnerable people – including pensioners – are set to face the devastating consequences.

“Shona Robison must use her statement to Parliament to be honest about her party’s financial mismanagement and accept responsibility for the sweeping cuts she will impose.”

Ms Robison's announcement of further cuts comes after the Scottish Government revealed it would be ending its pilot allowing rail passengers to travel for cheaper off peak fares throughout the day.

Ministers said ScotRail peak fares will be reintroduced at the end of September in “light of the financial challenges” facing the Scottish Government.

Transport Scotland said there had been a “limited degree of success” in the £40 million, year long pilot scheme.

In addition, the Scottish Government has said it will means test its replacement for the Winter Fuel Payment.

The decision follows Chancellor Rachel Reeves restricting the annual payment to those on pension credit or certain other benefits as part of her plan to tackle a £22 billion black hole which ministers north of the border said left them with no choice but to restrict the benefit to the pensioners on the lowest incomes.