Economic growth, progressive taxation and spending plans that
unapologetically target those in greatest need are at the heart
of a financial strategy announced by Deputy First Minister .
The Medium-Term Financial Strategy outlines the approach to
ensuring Scotland’s finances are on a sustainable footing and
delivering high-quality public services in the face of high
inflation. This includes:
- growing the economy, including by delivering on ambitious
commitments on childcare, seizing opportunities in areas where
Scotland has a competitive advantage and supporting
entrepreneurs, start-ups and scale-ups
- taking tough decisions around spending, focusing on what is
needed to achieve the missions of equality, opportunity and
community
- updating the tax strategy, with a new advisory group to be
established this summer and chaired by the Deputy First Minister
The strategy details the tough choices required in challenging
financial circumstances. Scottish Government estimates indicate
that due to inflation, pay increases and the lack of further
funding from the UK Government, current resource spending
requirements could exceed funding by £1 billion in the next
financial year, and by £1.9 billion in 2027-28. The gap between
capital spending commitments and funding could rise to 16% in
2025-26.
Ms Robison said:
“We are steadfast in our commitment to tackling poverty, building
a fair, green and growing economy, and improving our public
services to make them fit for the needs of future generations.
But we must recognise that our current financial situation is
among the most challenging since devolution, driven by the Covid
pandemic, the war in Ukraine and the recent period of high
inflation.
“Our funding remains largely based on decisions made by the UK
Government, but they have failed to take the steps required to
inflation-proof our budgets, and their decisions from Brexit to
the disastrous mini-budget have made matters worse. This is
creating substantial pressure on our public services, which we
have no choice but to address.
“Today I have outlined our strategy for managing these
challenges, doing all we can within our powers to ensure public
finances are on a sustainable path. We will have a laser-like
focus on spending, ensuring it targets equality, opportunity and
community. We will generate economic growth, supporting
businesses to invest and create new jobs while increasing tax
revenues to invest in better public services. And we will
continue to build the most progressive tax system in the UK,
ensuring the burden of taxation is placed on those with the
broadest shoulders.
“There can be no escaping the difficult choices ahead, but by
following the plan outlined today we can provide a more
prosperous and fairer future for the people of Scotland.”
Background
The Deputy First
Minister's statement to the Scottish Parliament
The updated tax strategy will be published alongside the 2024
Medium-Term Financial Strategy.
