Shona Robison, Scotland’s Deputy First Minister and Finance Secretary, is set to present the 2024-25 Scottish Budget amidst significant financial constraints.
The Fraser of Allander Institute, a prominent economic think tank, has highlighted that Robison has “limited room for manoeuvre” in the upcoming budget presentation.
This assessment comes despite the Scottish Government receiving additional funding from the UK Government’s recent budget announcements.
Key factors contributing to the fiscal pressure include public sector pay, which accounts for over half of the Scottish Government’s resource budget, increased costs in social security exceeding the funding received from the UK Government, and the larger public sector in Scotland with higher average pay rates compared to the rest of the UK.
The Institute’s report notes that £7 out of every £8 spent by the Scottish Government is allocated to just four areas: health, pay, social security, and grants to local government.
This concentration of spending significantly limits flexibility in budget allocation.
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Robison has described the 2024-25 budget as “the most challenging budget to be delivered since devolution”.
The government faces the task of addressing a £1.5 billion deficit in Scotland’s finances while balancing competing priorities.
As the budget presentation approaches, stakeholders will be closely watching how Robison navigates these fiscal challenges while attempting to meet the government’s policy objectives and maintain essential public services.
