Latest news with #MTFS
The Herald Scotland
26-06-2025
- Business
- The Herald Scotland
Robison unable to rule out compulsory redundancies
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. READ MORE 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.' READ MORE 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.
The Herald Scotland
25-06-2025
- Business
- The Herald Scotland
Robinson unable to rule out compulsory redundancies
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. READ MORE 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.' READ MORE 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.
The Herald Scotland
22-06-2025
- Business
- The Herald Scotland
Scotland's financial plan must show child poverty funding
The documents set out the Scottish Government's priorities for the next five years, and includes estimates for amounts of tax to be collected, and spending in areas like health, education and local government. Read more: Ahead of the Holyrood statement, Ms Robinson blamed the 'disappointing' outcome of the UK Government's recent Spending Review and Westminster's welfare reforms for worsening Scotland's financial outlook. She said the Scottish budget had been short-changed by £1.1 billion in day-to-day funding compared to UK departments. 'This government has delivered a balanced budget every year while taking steps to improve the overall sustainability of our finances. "This is despite a deeply challenging financial situation caused by rising global instability, persistent higher inflation and over a decade of UK austerity. 'Our disappointing settlement at the recent UK Spending Review has made the situation worse, short-changing the Scottish Government by £1.1bn in our day-to-day funding compared with UK Government departments. "This comes on top of reductions in our funding worth hundreds of millions of pounds as a result of the UK Government's proposed welfare reforms and failure to fully fund its employer National Insurance increase. 'In this context, it is important that we take action to maximise funding targeted at frontline services such as our NHS.' Shona Robison will deliver the MTFS on Wednesday (Image: Robert Perry) The MFTS is usually published each May, but this year's was delayed by four weeks due to the timing of the UK Government's multi-year Spending Review, published on June 11. As a result, MSPs will not be able to scrutinise the document until September, after the summer recess— much to the frustration of Holyrood's Finance and Public Administration Committee. According to the Scottish Fiscal Commission, the gap between what the Scottish Government spends and what it takes in is expected to grow from £1bn in 2024–25 to almost £2bn by 2027–28. The Fiscal Sustainability Delivery Plan, due to be published alongside the MTFS, is expected to set out how the government intends to close this gap—though details remain sparse. Stephen Boyd of the IPPR think tank told The Herald on Sunday that expectations were high for a more detailed and transparent strategy. 'At this stage, and given the month-long delay in publication, it is entirely reasonable to expect that long-standing criticisms will start to be addressed in this MTFS,' he said. "Information presented consistently on a year-to-year basis; more detailed information on spending priorities and future trends; more detailed information on risks and how these will be mitigated.' Mr Boyd said the strategy must outline how the Scottish Government plans to fund the First Minister's key priorities: tackling child poverty, growing the economy, addressing the climate crisis and improving public services. 'It is difficult to see how significant progress can be made on these priorities, especially the first, without spending more money,' he said. 'The MTFS should begin to set out a longer-term tax strategy, recognising that taxes will likely have to rise. 'The tax strategy published alongside this year's budget included a number of commitments for the remainder of this parliament—for example, that over half of Scottish taxpayers will pay less Income Tax than they do in the rest of the UK. 'The MTFS should begin to set out a longer-term strategy recognising that taxes will likely have to rise to respond to the demands of an ageing society and the climate crisis.' Read more: Mr Boyd said that despite increases in the block grant announced in the UK autumn budget and the Spending Review, Scotland's public finances 'remain tight'. 'Unless the Cabinet Secretary is prepared to raise taxes, portfolio funding settlements are likely to be tight, especially if—as it's reasonable to expect—health is protected. 'It is reasonable to expect that parts of the public sector—and their workforces—will be disappointed by the MTFS. 'It is entirely possible that a revised approach to pay and workforce will be signalled in the MTFS. Pay settlements have been relatively generous in the devolved public sector over recent years. 'It will be interesting to see how the Cabinet Secretary navigates this politically fraught terrain. 'As the modelling produced by IPPR Scotland and others shows, it is clear that more generous welfare payments are required to make significant progress on the First Minister's main priority of eradicating child poverty. "Yet, the First Minister recently suggested there will be no further increases in the Scottish child payment. 'The MTFS will provide a clear signal on just how serious the Scottish Government is about meeting this priority.'
Powys County Times
14-06-2025
- Business
- Powys County Times
Powys County Council's budget black hole value queried
HOW big a funding gap Powys County Council is expected to fill with cuts and savings over the next four to fove years varies by over £20 million – a councllor has pointed out. Calls were made to clarify the figures that the council is using to explain their predicted financial black hole during a joint meeting of all of the council's scrutiny committee's on Wednesday, June 11. At the meeting, councillors looked at the council's draft Corporate and Equalities Strategic Plan which has been updated from the version that was agreed earlier this year. The plan sets out the council's well-being objectives, and what action they need to take to deliver them up the next local election in 2027. All the departmental strategies, action and business plans are linked by a 'golden thread' into this document which encompasses them all. This plan is supposed to keep track of how the council is performing against the three objectives of the Liberal Democrat/Labour cabinet's Stronger Fairer, Greener agenda. Cllr Gareth E Jones (Powys Independents) highlighted the problem and said: 'If you go to the leader and deputy leader's introduction (to the document) there's a statement there that the funding gap is £60 million but on the MTFS (Medium Term Financial Strategy) the funding gap on those assumptions is shown as £39.1 million. 'I think they two figures need to be the same for consistency.' Director of corporate services and section 151 officer, Jane Thomas replied: 'We can and will amend that to the latest figure, it should reflect what was approved in council back in February. 'We will see the gap change quite often now as we go through the years and we develop our five year plans.' Making sure that the figure changes forms one of the recommendations made by councillors at the meeting – which will be added to the report when it goes before cabinet at a later date. Another recommendation by councillors is that members of the Liberal Democrat/Labour cabinet should attend the joint scrutiny meeting to explain and if needed defend the council's performance. Cllr Jones said: 'It was very disappointing about the number of cabinet members that were present today, we should have a recommendation at future meetings that they have more presence. 'This is the council's performance document ,officers develop the plan but cabinet member sign it off.' Learning and skills committee chairman who chaired the joint-scrutiny meeting, Cllr Gwynfor Thomas (Conservative) said: 'I'm happy to do that as they (cabinet members) are the line holders and are responsible for the different measures and things.'
