MSPs say they remain ‘in the dark’ on Government’s long-term fiscal planning

Holyrood’s Finance Committee has urged the Scottish Government to begin long-term fiscal planning as it says it remains “in the dark”.

The committee is urging ministers to use the Scottish spending review in January to bring clarity to its priorities and how substantial savings will be made.

The committee’s report on Responding to Long-Term Fiscal Pressures was published on Thursday, in advance of the Government outlining its draft budget in January.

Finance and Public Administration Committee convener Kenneth Gibson said MSPs remain “in the dark” on the Scottish Government’s longer-term financial plans.

He said: “We agree with the Scottish Fiscal Commission (SFC) that the spending review provides an opportunity for the Scottish Government to set out how it will address Scotland’s long-term fiscal sustainability challenges.

“We seek further details of how the Government is directing spending toward its priorities and what areas are being deprioritised.

“We’d also like to know how ministers plan to meet their ambitions for public sector workforce reductions and efficiencies worth £1 billion over the next five years.

“Evidence and trends suggest these targets will be incredibly challenging to meet.”

Mr Gibson said the committee had asked the Scottish Government to provide a full response to the SFC’s fiscal sustainability report in March 2023, but is still waiting.

He said: “We, therefore, remain in the dark on the Scottish Government’s longer-term financial plans.”

The committee welcomed recent improvements in the level of information provided in the Government’s Medium Term Financial Strategy on the “challenges ahead”.

However it questioned why a separate document was needed by the Government to explain how it is responding to medium-term pressures.

Mr Gibson said: “We do not share the Government’s view that the two documents ‘set out a credible plan’ to deliver its priorities.

The report asked the Government to maximise opportunities for better aligning skills with the needs of Scotland’s economy.

This included fit-for-future funding models for colleges and universities, and careers advice.

It also asked the Government how it is supporting organisations to retain and attract older workers and those with disabilities.

The committee has also requested further details of how the Scottish Government is creating the right conditions for businesses in Scotland to grow.

On social security spending, Mr Gibson said the committee was “disappointed” in the lack of information provided in the Medium Term Financial Strategy.

He said: “Our committee is not convinced that the Scottish Government has set out sufficient evidence to support its argument that the future social security budget is sustainable.

“We are disappointed the Government’s Medium Term Financial Strategy did not include the information we requested on the fiscal sustainability of social security spending.

“Nor did the Government say how it is assessing the effectiveness of, and outcomes from, its approach to benefits delivery in Scotland – or how this impacts upon other parts of the budget.

“We’ve therefore asked the Government again to carry out this work and report back without further delay.”

Finance Secretary Shona Robison said: “The Scottish Government notes the committee’s views and we will respond alongside the Budget as is standard procedure.

“This government has delivered a balanced budget every year. However, we have been candid about the challenging financial environment we face, caused in large part by persistent high inflation and the decisions of the UK Government.

“We are calling on the UK Government’s Autumn Budget to deliver more funding for public services, infrastructure, and cost-of-living support – including by abolishing the two-child limit in universal credit.

“The financial strategy and delivery plan I published earlier this year means funding in the forthcoming 2026-27 Scottish Budget can be targeted at frontline services such as the NHS, action to eradicate child poverty and other priorities whilst ensuring the continued stability of our finances.

“We are also taking forward a Public Service Reform strategy to deliver services that are preventative, better joined up and more efficient. I will set out our multi-year Spending Review in January, alongside the Budget.”