Shona Robison has confirmed that the Scottish Government will need to make £500 million of cuts to Scotland's public services to balance the budget. 

The Finance Secretary told MSPs that there was "uncertainty about additional funding" and that she was facing further in-year pressure.

Ms Robison said around £60m of savings would come from emergency spending controls, targeting civil service recruitment, overtime, and travel.

Another £188m will come from savings across all government departments, including around £115m from health, including £18.8 from mental health services. 

There was also £23.4m from Net Zero and Energy and £23.7m from active and sustainable travel.

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Other savings include the scrapping of free bus travel for asylum seekers and the end of a pilot scheme removing peak fares from ScotRail trains. 

The Finance Secretary said higher than expected public sector pay increases had added £0.8 billion to the government's spending in this financial year.

The minister said she was also planning to use up to £460m of money raised through Scotwind leasing round - though she said she hoped it would not all need to be used.

Ms Robison said if Scotland was an independent country the government "would not be paying the price for bad decisions taken at Westminster - whether that be years of austerity cuts, Brexit, or reckless mini budgets - all of which have taken money out of the economy and funding for public services."

She added: "However, within the current devolution settlement the fact remains that our main lever to remove these pressures in-year is to reduce spending to achieve balance."

Ms Robison said she would hold the budget on 4 December. Despite the black hole, she suggested there would be no tax hikes. 

“On the application of taxation, we can only go so far, given the scope of our devolved tax powers," she said.

“Raising significant further revenue would require substantial reform to the tax system or further devolution of powers.

“These will take time and rely on the UK Government. It is therefore essential that we aim to grow the economy and the tax base to support a sustained flow of revenues over time.”

Ms Robison said she would use the budget to "highlight how we will double down on reform opportunities and maximise efficiencies, with a particular focus on the operation of public bodies and driving further savings through efficiency levers."

 

Speaking to journalists in Holyrood shortly after the statement, Ms Robison said the new Labour government, having accepted the UK pay review body recommendations, should have then fully funded them. 

Instead, Chancellor Rachel Reeves said her government would partly pay for the hikes by asking government departments to tighten their belts and stop non-essential spending. 

If the pay deal had been paid for by new money, or borrowing then Ms Robison would have had additional consequentials for all £9.4bn. However, she will only receive two-thirds of this.

"That gives me an in-year problem that has come as an absolute game changer," the SNP minister said. "And I have to then act to create that headroom because I don't know what the final position is going to be, where we end up." 

"What I can't do is to say to Scottish nurses, 'you're not getting a pay rise like the nurses down south are getting," she added.

"Because that would inevitably, I think, lead to disruption and industrial action in our health service, and that has a cost attached to it. 
"So that is my problem, because fundamentally, devolved governments don't have levers in here to be able to take on these headwinds. We have one main lever, and that is spending controls."

Ms Robison was asked if she regretted the council tax freeze, which ultimately cost the Scottish Government £150m. 

"The council tax freeze was a recognition of the cost of living crisis that people were suffering, and it was a lever that we felt we could deliver in order to help with household budgets. 

"This year, the discussion about council tax will be part of the budget setting process, and the discussions with local government around what we can do to support their budgets going forward."

Responding to the statement, Scottish Labour Finance spokesperson Michael Marra described it as a "threadbare, shameless attempt to once again pass the buck."

He added: "After 17 years in power, the SNP is still insisting ‘it wasn’t us’.

“It’s the same script again and again.

“All of the independent experts – the Fraser of Allander Institute, the Institute for Fiscal Studies, Audit Scotland, the Scottish Fiscal Commission – are absolutely clear that these SNP cuts stem from their incompetence.

“This incompetent and wasteful SNP government has lost its way and is mismanaging public money."

The Scottish Greens finance spokesperson, Ross Greer, said the cuts were a "disaster for our climate."

He added: "The SNP have chosen to slash spending on climate action and increase costs for commuters.

"Other options were available, but they’ve decided to cut the budgets for nature restoration and walking, wheeling and cycling, bring back peak rail fares and raid ScotWind funds originally intended for investment in our country’s future, especially in the green economy.

“With global temperatures rising, Scotland must be a climate leader but the SNP is taking us backwards." 

Scottish Lib Dem leader, Alex Cole-Hamilton said: “Rather than stand up and be honest that she was taking an axe to NHS services, the Finance Secretary has chosen to sneak these cuts out in a letter.

"The Finance Secretary should crawl over broken glass to protect essential NHS services, people are already waiting far too long for mental health care and to see their GP.

“This is a fiscal firestorm of the SNP Government’s own creation.

“People feel like they are working harder but falling further behind. They just don’t trust the SNP Government with their child’s education, with their granny’s care, or with their money anymore.

“One-off income from selling off Scotland’s prize seabed on the cheap will soon be gone. With that in mind I fear that the Finance Secretary will return with further cuts to our NHS next year.”

Scottish Conservative leadership candidate, Russell Findlay, said: “17 years of reckless waste and squandering of taxpayers’ money has finally caught up with the Nationalists.

“But the public are still in the dark about exactly how the SNP will plug the billion pound black hole in their budget.

“Public services will suffer hundreds of millions of pounds of stealth cuts, but there’s little transparency over what will face the chop.

“The SNP need to open the books and start being honest with the Scottish public, for a change.”