Difficult choices ahead to balance books in Scottish budget, MSPs warn

Difficult choices lie ahead around how to balance the books in the upcoming Scottish budget, a committee of MSPs has warned.

The Scottish Government published an emergency budget review on Wednesday but the full budget covering the next financial year is due on December 15.

In its report, Holyrood’s Finance Committee said an “open and honest debate” is needed about the role of taxation in funding services.

The committee noted that recent pay rises agreed with public sector workers had been funded partly through a headcount reduction.

It said this should be done in a co-ordinated way which minimises the impact on public services.

Committee convener Kenneth Gibson said: “Our committee accepts that the Scottish Government faces difficult choices in balancing its approaches to spending and taxation – especially if it’s to maintain financial sustainability and support households and businesses through the cost-of-living crisis.

“An open and honest debate with the public about how services and priorities are funded is now needed, including on the role of taxation in funding wider policy benefits for society.”

On the challenges facing the public sector, Mr Gibson said: “We acknowledge the challenge the Scottish Government faces in identifying additional money to fund public sector pay rises which respond to inflation.

“The UK Government should also recognise the impact of inflation on the Scottish block grant.

“We ask for assurances from the Scottish Government that it will approach reducing the public sector headcount in a systematic, transparent, and co-ordinated way.

“This should be done in tandem with the public service reform agenda with a view to minimising any impact on the delivery of public services.

“As we say in our report, it is now time for the UK Government to concentrate on putting in place measures to bring more stability to the UK economy.”