Scottish spending cut by £900m after Spring Statement
Scottish ministers are facing 'significant cuts' to their spending of almost £1 billion by the end of the decade, an expert analysis of the Chancellor's Spring Statement has found.
Treasury figures showed the Scottish Government's total expenditure is still expected to rise, from £48.2 billion in the forthcoming financial year to £53.5 billion in 2029-30.
But the University of Strathclyde 's Fraser of Allander Institute said cuts in Rachel Reeves 's statement would mean the Scottish Budget being around £900 million smaller at the end of the decade than previously forecast.
Joao Sousa, the institute's deputy director, said the Chancellor's cuts to UK departmental spending would result in around £435 million of cuts to Scotland through the Barnett formula.
A further £455 million of cuts are heading down the line in 2029-30, the analysis said, thanks to Labour's crackdown on benefits in the rest of the UK.
Control over some benefits have been devolved to the SNP administration in Edinburgh, with the Treasury handing Scottish ministers a sum equivalent to the cost of the same welfare payments in the rest of the UK.
Economists had previously warned that every £1 billion of cuts to welfare spending by the UK Government will lead to a £116 million reduction in funding to the Scottish Government.
Concerns over a financial black hole in the Scottish Government's Budget have been exacerbated thanks to the SNP introducing a more generous benefits system, with fewer eligibility checks.
This means SNP ministers could face a choice between making similar cuts to benefits in Scotland, reducing spending on other public services or raising taxes again.
Shona Robison, the SNP Finance Secretary, said: 'Today's statement from the Chancellor will see austerity cuts being imposed on some of the most vulnerable people in our society. The UK Government appears to be trying to balance its books on the backs of disabled people.'
She also accused the Chancellor of 'short-changing' public sector bodies over compensation to cover the cost of Ms Reeves's increase to employers' National Insurance contributions.
But the Chancellor told the Commons that she had provided the 'largest settlements in real terms for Scotland, Wales and Northern Ireland in the history of devolution'.
Ian Murray, Labour's Scottish Secretary, said the Spring Statement had handed the Scottish Government an extra £28 million on top of a £4.9 billion boost provided in last autumn's Budget.
He said: 'This is the biggest budget settlement in the history of devolution and an end to austerity. The Scottish Government must now use that wisely – to improve Scotland's failing public services.'
Mr Sousa's analysis confirmed that the Spring Statement would result in a further £28 million rise in the Scottish Government's spending money for 2025-26.
However, he warned that 'the picture is significantly more challenging in terms of what it means for Holyrood's finances' in later years.
He said the cuts to departmental spending south of the Border would result in 'significant reductions' of £200 million and £435 million in the Scottish Government's block grant in 2028-29 and 2029-30 respectively.
The adult disability payment replaced the personal independence payment (Pip) in Scotland in 2022 when control over the latter benefit was devolved to Holyrood.
Mr Sousa said reforms to Pips south of the Border would lead to Scotland's block grant being cut by £177 million in 2027-28 and £455 million in 2029-30.
However, he noted that the Chancellor's decision to increase capital spending on infrastructure would lead the Scottish Government's funding for similar projects, such as buildings and roads, to rise by nearly £250 million by the end of the decade.
Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, called for action to tackle poor economic growth forecasts.
But she said: 'The Chancellor's focus on the efficiency of government spending represents a bold step in the right direction.
'Reducing costs and boosting productivity are things which businesses must think about on a daily basis, and it is right that the Chancellor should treat public finances in the same way.'
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