Robinson unable to rule out compulsory redundancies

The Herald Scotland

4 days ago

The long-delayed report, which was supposed to be published last month, says that without action, Scotland faces a £2.6bn gap in resource spending and £2.1bn in capital spending by 2029–30.
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Alongside the MTFS, the Government published a Fiscal Sustainability Delivery Plan, setting out how ministers hope to close that gap.
Specific measures include reducing the public sector workforce by an average of 0.5% annually.
With 469,100 full-time equivalent staff on the books, this would be the equivalent of around 11,611 full-time workers by the end of the decade.
Forbes, Swinney and Robison outside the chamber (Image: Andrew Milligan/PA) The move should lead to savings of £700m annually, and ministers are confident it can be achieved through staff turnover and a freeze on recruitment.
However, speaking in Holyrood, the Finance Secretary, Shona Robison, was unable to say there would be no compulsory redundancies.
Answering a question from Labour's Daniel Johnston, the minister said: "I have been engaging with the unions and the STUC around this, is that no compulsory redundancy maintains to be the default position.
"But as a last resort, once all steps have been taken through voluntary severance, through redeployment, if there is no other route and there are no jobs for those people involved, then the compulsory redundancy can be considered, but only at the end of that route.
"So we believe that these reductions can be made through natural attrition and voluntary severance, and it is only in that extreme position that that would be enabled, and we don't see that happening in very many cases."
Public sector wages represent 55% of Scotland's resource budget. Pay agreements in 2025–26, including NHS workers' 4.25% increase, have already exceeded the Government's 3% guideline.
Alongside the strategy and the plan, the Scottish Fiscal Commission (SFC) published its latest economic and fiscal updates.
The watchdog said that the total funding available to the Scottish Government will rise from £61.3bn in 2026–27 to £66.5bn by 2029–30.
However, after accounting for inflation, this represents an increase of only 0.8% per year in real terms.
Next year, the Scottish Government's day-to-day spending will be £54bn, but after subtracting social security costs, only £46.3bn will remain.
By 2029–30, this will increase slightly to £50.1bn.
Ms Robison blamed the financial settlement from Westminster, pointing to a £400m shortfall triggered by the Labour Government's refusal to fully fund increased employer National Insurance contributions.
She said changes to welfare payments could cost Scotland an extra £440m by 2029–30.
"Managing the impact of Westminster austerity is all too familiar," Ms Robison told MSPs.
"We continue to invest in the people of Scotland, supporting a better-paid public sector, delivering high-quality public services and providing welfare support not available elsewhere in the UK. And we have managed this while balancing the budget every year."
Beyond cutting the workforce, the Government believes it can save between £600m and £1.5bn each year over the next five years by adopting new technology, increasing automation, and encouraging closer working between public agencies.
Around 12,000 civil service jobs to go (Image: PA)
The Government will also carefully reassess infrastructure spending due to high inflation in construction costs.
Ms Robison confirmed she would publish a multi-year Scottish Spending Review alongside December's budget.
The other key pillars of the plan to tackle the black hole are growth and tax.
On economic growth, the minister said the Government would aim to increase business activity to broaden the tax base, while on taxation, she hinted at a potential wealth tax, with the Government committing to the publication of a literature review on the measure.
Labour finance spokesman Michael Marra pointed to the £9.1bn extra coming to the Scottish Government in the coming years as a result of UK Government decisions.
'Today is the day years of gross mismanagement of the public finances by SNP ministers caught up with them – and the price is being paid by ordinary Scots,' he said.
'Let's be crystal clear, by no definition other than the SNP's can the budget they receive be described as austerity.
'The reason this Government is making cuts is because they have spectacularly mismanaged Scotland's budget.
'It's SNP ministers who have created a structural deficit of a staggering £2.6bn – that's a result of choices that you made.'
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Scottish Conservative finance spokesman Craig Hoy said the workforce reduction target 'lacks ambition and detail.'
He told MSPs: 'The last medium-term financial strategy was over two years ago – last year's was binned and this year's was delayed.
'By slipping out this year's strategy just before recess, we have no time to properly scrutinise this plan.
'But what we do know is that without radical action on public sector reform, on health and on labour force trends, Scots face substantially higher taxes or a state that does less.
'But the projected £5bn fiscal gap by the end of the decade is not Westminster's fault or responsibility, it is the SNP's.'
David Phillips, an Associate Director at the Institute for Fiscal Studies, said "tougher financial choices" were still to come.
He said the £2.6bn a year funding gap was "roughly equivalent to spending on Scottish police and fire services, or the revenue from increasing all rates of income tax in Scotland by around four percentage points."
"As the MTFS and SFC make clear, current forecasts for the contribution of devolved tax revenues to the Scottish Budget are likely optimistic, as they assume earnings grow significantly faster in Scotland than in the rest of the UK from 2026–27 onwards.
"All else equal, if earnings instead grew at the same rate as in the rest of the UK, the 'funding gap' for day-to-day spending would be closer to £3.5bn."
He said the multi-year spending review would also have to say which services will be cut back in order to protect spending on the Scottish Government's key priorities – poverty, climate change, economic growth, and effective public services.
"This will likely require steep cuts to some other 'non-priority' areas, and a laser-like focus on how effective spending actually is – not all spending on the Government's priorities can and should survive the chop.
"Indeed, the scale of the fiscal challenge could necessitate the Scottish Government to make trade-offs between its four priorities."
"The fiscal challenge facing Scotland is large and real. So as the current Government and opposition parties begin to set out their election pitch to voters, it will be vital to scrutinise what their plans would mean for Scotland's finances," he added.