Finance Secretary will update Parliament after
recess outlining the urgent action being taken to address
profound financial pressures.
In a letter to the Finance and Public Administration Committee,
Ms Robison said it was necessary to reduce expenditure to deliver
sustainable finances, particularly as it was unclear whether the
UK Government would fully fund its public sector pay deals.
The Cabinet Secretary said she is working closely with
counterparts in Wales and Northern Ireland, along with the
Chancellor of the Exchequer and the Chief Secretary to the
Treasury, to ensure that all avenues are explored to navigate the
financial challenges in the months and years ahead.
The letter is included in full below.
MSP
Convener
Finance and Public Administration Committee
The Scottish Parliament
Edinburgh
EH99 1SP
23 August 2024
Dear Kenneth
I am writing to set out an update on key issues ahead of our
meeting on 29 August. The Scottish Government, along with
government and public sector bodies across the UK, faces a very
challenging environment as we manage our finances through the
current financial year and set our budget for 2025-26.
I am working with my Cabinet colleagues to agree the necessary
actions to reduce expenditure and ensure our finances are on a
sustainable footing. Further to this, additional measures are now
necessary following the UK Treasury's recent audit of public
spending and lack of clarity over whether their decision to
deliver Pay Review Body recommendations will be fully funded.
Over the last few weeks, the Scottish Government has set out that
we had no choice but to replicate the UK Government's decision to
restrict eligibility for the Winter Fuel Payment to older people.
The Scottish Government has also introduced a set of spending
controls with the intention of further reducing spend in 2024-25.
In addition, I am working closely with my counterparts in Wales
and Northern Ireland, along with the UK Chancellor of the
Exchequer and the UK Chief Secretary to the Treasury, to ensure
that all avenues are explored to navigate the financial
challenges we face in the months and years ahead.
Subject to the agreement of the Parliamentary Bureau, I will be
looking to bring forward a full update to Parliament in early
September. During this statement, I will set out in detail the
scale of the fiscal pressures that we are facing, in 2024-25 and
beyond, and the action the Scottish Government is taking to
address this challenge
Fiscal Update
I welcomed the Committee's engagement on publishing a Medium Term
Financial Strategy in 2024, given the timing of the UK General
Election and uncertainty over the timing of the Autumn Statement.
My update in September will provide further information to
Parliament on the medium term position to support pre-Budget
scrutiny.
Given the announcement of a UK Government multi-year Spending
Review, due to conclude in the Spring, it is my intention not to
publish an MTFS alongside the 2025-26 Budget.
Publishing an MTFS shortly before the UK Government Spending
Review would risk the information provided becoming quickly out
of date in the Spring. It is instead my intention to return to
the usual schedule for the MTFS and publish a full MTFS in good
time ahead of Budget 2026-27; recognising the precise timing will
depend on the timing of the UK's multi-year Spending Review which
we expect to hear more about in the UK Autumn Statement on 30
October. In the meantime, I am keen to explore what medium-term
information could be included in the Scottish Budget
documentation, alongside the Tax Strategy. I would welcome the
Committee's views on where there are particular gaps that can
reasonably be addressed prior to the UK's multi-year CSR and 2025
MTFS.
Budget Date
The early confirmation of the UK Autumn Statement supports early
planning of the 2025-26 Scottish Budget, and I am mindful of the
interests of the Committee in securing an early Budget, along
with the time necessary for Ministers and officials to work with
the Scottish Fiscal Commission and to finalise policy, tax and
spending plans. It would be very helpful if we could reach an
early consensus on the Budget date to support our planning and to
allow early notification to the Scottish Fiscal Commission.
Tax Strategy
The Tax Strategy will publish as a final document alongside the
2025-26 Scottish Budget later this year. My officials are in
discussion with the Committee Clerks to confirm the best way to
ensure the Committee has adequate time to feed in further views
on this important piece of work. I believe there will be an
opportunity to discuss this with you on 29 August.
I hope this information is helpful and I look forward to meeting
with you and Committee members on 29 August for further
discussion.
I have copied this letter to Professor Graeme Roy, Chair of the
Scottish Fiscal Commission for information.
Kind regards,
SHONA ROBISON
