UK Budget delivers real cut to Scotland’s funding

• DFM - Action on energy bills falls short of what is needed'

The UK Budget delivers a real terms cut in Scotland's budget of around £650 million in 2027-28, the Deputy First Minister has warned.

Scotland's resource block grant is set to reduce by 1.3% in real terms in 2027-28, equivalent to a reduction of around £550 million. Scotland's capital budget will see a 1.5% real terms reduction in 2027-28, equivalent to around £100 million.

The Deputy First Minister also confirmed that the Scottish Government will ensure that households in Scotland benefit from the £100 payment for energy bills support. 

Jenny Gilruth said that while any measures to bring down the cost of energy bills are welcome, the steps confirmed by the Chancellor today fall far short of what is required and do not meet the promises on which the UK Government came to office.

The Deputy First Minister said:

The Scottish Government's budget will be cut by around £650 million next year - reducing the money we have to spend on public services and supporting people with the cost of living.

The Prime Minister has previously claimed that he would respect devolution and the Scottish Government but his actions do not match his words. Cutting Scotland's budget shows that, yet again, we are being treated as an afterthought.

The Scottish Government will ensure that households in Scotland will benefit from the one-off £100 payment for energy bill support, however, it is clear that the measures announced today fall far short of the action which is required. Furthermore, this support does not come close to meeting the promises on which the UK Government came to office, including reducing energy bills by £300 which remain significantly higher than they were in July 2024. The UK Government has failed to meet the moment and has failed to keep its promise.

It is also unacceptable that there was no announcement about ending wider austerity policies which are pushing families into poverty like the bedroom tax, the benefit cap and young parent penalty in Universal Credit which would make a significant difference to tackling poverty.  The Chancellor had the opportunity to lift thousands more families out of poverty, and he has chosen not to.

We will now take the time to assess the full implications for Scotland of today's statement. I will be announcing further details as part of the Scottish Budget on 3 December.