KATE Forbes has hinted she will cut back some public services in today’s four-year spending review, saying it would “prioritise public investment in areas that will deliver the greatest change for Scotland and help tackle the cost of living crisis”.

The SNP finance secretary warned Scotland would need to make "difficult decisions" to achieve the long-term goal of a fairer, greener and more prosperous society.

The SNP-Green Government is facing a £3.5billion spending shortfall by 2026/27, according to its own central projections.

The Institute for Fiscal Studies last week warned that left a choice between axing services, hiking taxes, or hoping the UK government would give Holyrood more money or new borrowing powers.

Ms Forbes will also publish the annual Medium Term Financial Strategy today and a targeted review of the Government’s capital spending programme.

Speaking ahead of her statement to the Scottish Parliament this afternoon, Ms Forbes said: “The Resource Spending Review - which is not a Budget - will set out how we can best focus Scotland’s public finances in the coming years to tackle child poverty, address the climate crisis, strengthen our public sector as Scotland recovers from Covid, and grow a stronger, fairer and greener economy.

“We are living in unprecedented times when it is necessary to be canny with our spending, and the Scottish Government is no different.

“Within our resources and current powers, we have to make sure we are doing the best for households and businesses, in the midst of Covid recovery, a war which is affecting the global economy, and the cost-of-living crisis.

“This review gives broad parameters for spending over the next four years and sets out areas we want to engage with partners on to deliver the reforms necessary for Scotland to deal with the challenges ahead.

“While we face challenges, this does not mean we cannot achieve our ambitions of a fairer, greener and more prosperous society if we are prepared to make the difficult decisions now which will bring about the changes needed to achieve this.”

Labour MSP Daniel Johnson said: “The SNP have been in charge of Scotland’s finances for fifteen years, and they have left our economy vulnerable and our public finances in a state.

“We are facing impossible choices to patch over the £3.5 billion blackhole they have created by failing to grow our economy and boost wages. 

“The SNP have always delivered plenty of rhetoric but a dearth of detail – tomorrow must be different. 

“We need real answers on how they will fix the mess they have created and get Scottish finances back on steady footing without breaking the promises they have made. 

“As the cost of living crisis piles pressure on to household it is all the more urgent that we see an end to the SNP’s catastrophic incompetence.”

Scottish Liberal Democrat finance spokesperson John Ferry added: "Government sources are already suggesting that justice and education spending will be in the firing line.

"That's despite the worst ever figures for criminal justice cases completed within six months, and two years of disruption to schooling.

"Even with the extra money that Scotland gets because of the United Kingdom's pooling and sharing arrangements, there is a gaping hole at the heart of our public finances.

"That is down to the utter incompetence of SNP ministers.

"It's hard to think of an economic intervention by SNP ministers which wasn't a disaster. Anyone who has ever run a business is looking on in horror at the SNP's economic mismanagement."