Holyrood 2026 will test voters' trust in public spending

The Herald Scotland

a day ago

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Speaking to journalists, Ian Murray said the increased settlement raised fundamental political questions ahead of the 2026 election.
'The question then becomes, who do you trust to spend that?' he said. 'The record of the SNP Government of the last 18 years has not been beneficial in terms of how they would spend it.
'In fact, I think there will be broad support for the view that the £4.9bn that they got in the budget last year has not been spent wisely either.
'So this is an incredible investment. It is the largest settlement in the devolution era. We promised to end austerity, and we have.'
(Left to right) Education Secretary Bridget Phillipson, Secretary of State for Scotland Ian Murray and Energy Security and Net Zero Secretary Ed Miliband leave Downing Street (Image: Stefan Rousseau) In total, the Scottish Government's resource budget will rise by £2.4bn per year from April 2026, while its capital funding will increase by more than £510 million annually over a slightly longer period.
However, Scottish Finance Secretary Shona Robison warned that despite the uplift, the real-terms increase in day-to-day funding was just 0.8% annually — below UK departmental averages — and amounted to £1.1bn less than if it had matched UK departmental spending.
The Scottish Government will respond to the announcement in the medium-term financial strategy on June 25, the Finance Secretary said.
Speaking to journalists in Holyrood, the SNP minister said there had been a deterioration in relations with the Treasury. She said that despite repeated requests, devolved governments were refused a meeting with Darren Jones, the Chief Secretary to the Treasury.
'I have to say, in recent weeks, the lack of engagement around the Spending Review has been a concern,' she said.
'Ourselves, the Welsh and Northern Irish governments asked for a meeting with the Chief Secretary to the Treasury to talk about the details of the Spending Review and we were not given one because he was too busy in departmental meetings and negotiations with UK departments — and then pops out the end of that to meet with us.
'I do not think that is good enough and it went down really, really badly.'
(Image: Andrew Milligan/PA) In their analysis, the Fraser of Allander Institute also queried Labour's claim that the block grant would increase by £9.1bn over the Spending Review period.
They said that figure was based on a flawed baseline and assumed there would be no funding increase otherwise.
'A much more insightful — though perhaps less cheery — conclusion from looking at the Scottish Fiscal Commission's forecast is that by 2028–29, funding will be £0.7bn lower than their central estimate published on 29 May.'
In the Spending Review, the Chancellor confirmed funding for the long-awaited Acorn carbon capture project at St Fergus, a £250m redevelopment of Faslane naval base, and the reversal of a cut to a £750m AI supercomputer at Edinburgh University.
Ms Reeves also confirmed £25m for the Inverness and Cromarty Firth Freeport, and funding for hydrogen production projects at Cromarty and Whitelee.
There was also the announcement of a new local growth fund, with investments in up to 350 deprived communities across the UK — including Kirkcaldy High Street and seafront.
'We are renewing Britain,' Ms Reeves told MPs. 'I know that too many people in too many parts of our country are yet to feel it. This Government's task, my task as Chancellor, and the purpose of this spending review is to change that, to ensure that renewal is felt in people's everyday lives, in their jobs and on their high streets.
'The priorities of this spending review are the priorities of working people, to invest in Britain's security, in Britain's health, and to grow Britain's economy so that working people are better off.'
The Chancellor outlined £190bn in extra spending on the day-to-day running of public services and £113bn on investment.
The health service in England was the biggest winner in terms of day-to-day spending, increasing in real terms by 3% a year. That will result in substantial consequentials for the Scottish Government.
As expected, defence also saw a significant boost, with spending rising to 2.6% of GDP by April 2027.
The Chancellor also promised significant savings on asylum, including a commitment to end spending on hotels for asylum seekers by the end of the parliament. This, she told MPs, would save £1bn.
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The sheer scale of the spending, and a promise to stick to her fiscal rules, led to speculation that Ms Reeves would need to hike taxes in the autumn budget.
In his response in the Commons, Mel Stride, the Conservative shadow chancellor, said the spending rise was 'not worth the paper that it is written on'.
'This is the spend now, tax later review, because [she] knows she will need to come back here in the autumn with yet more taxes, and a cruel summer of speculation awaits.'
In a round of media interviews, Ms Reeves defended her plans and rejected claims she would need to increase taxes.
The Chancellor told GB News: 'Every penny of this is funded through the tax increases and the changes to the fiscal rules that we set out at last autumn.
'We are not spending a penny more or a penny less than the envelope that we set last autumn.
'So all of this is fully funded. I said at the budget last year, and I repeated again in the spring statement in March, that public services now needed to live within the envelope that we have set.
'That has meant difficult conversations, it has meant difficult decisions, but we have stuck to that spending envelope that we set out in the budget last year.'
Most government departments have been asked to find 5% in efficiency savings by 2028–29. Some, like HMRC, face targets as high as 13%.
The Scotland Office, grouped with other smaller departments, is expected to contribute to a £296m cut across the UK — but no breakdown has been provided on how much of that will fall on Mr Murray's own department.