The SNP's welfare spending rise outpaces revenue growth
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Wednesday's GERS figures show total public spending for Scotland rose 5.5% to £117.6 billion in 2024/25, but within that the biggest line item — social protection — grew 7.9%, faster than the UK's 5.3%, and now accounts for roughly 30% of all spending.
Officials explicitly link that faster growth to programmes such as the Scottish Child Payment and the replacement disability benefits.
The Adult Disability Payment is due to rise to £3.13 billion from £2.63 billion, the Child Disability Payment to £514 million, and the Scottish Child Payment to £454 million.
This is reflected in the increased spending per head in Scotland, now £2,669 more per person than the UK average, up from £2,311.
Revenues are not keeping up with that growth. Overall Scottish revenue edged up to £91.4 billion, while spending rose to £117.6 billion, taking the net fiscal balance to -11.7% of GDP.
How will the SNP bridge that gap? They are putting a lot of stock in their efficiency programme. Ministers believe a Public Service Reform drive can make £1 billion of savings over five years, largely through corporate functions and shared services.
Speaking to journalists in St Andrew's House, Public Finance Minister Ivan McKee, who is charged with delivering these efficiencies, said he was confident the government would meet its promises.
'We are absolutely clear-eyed about what that challenge is, but also about what the solutions are, and we have been very explicit in laying those out.'
The welfare spending, he added, was an investment.
'It's about getting young people, giving them the best start in life, so they end up being contributing members to society, rather than the opposite. And that's really, really important.'
The tables accompanying the GERS report show devolved social security payments rising by hundreds of millions. Aggregate social security spending in Scotland rose from £25.29 billion to £27.60 billion in a single year, before adding social care and pensions-related items within social protection.
The government argues that devolved revenues cover devolved spending. But GERS shows that total spending growth is being driven by social protection faster than revenue growth, which is why the overall balance deteriorated despite onshore tax gains.
Even if Mr McKee meets his £1 billion target, the annual increases in social security and wider social protection are already outpacing it.
The question then is: what next?
If social protection is ,er, protected in the budget, and if health spending is, as per usual, protected, then what needs to give for the government to keep its social contract?
The obvious choices are higher taxation or further cuts.
There are tough choices ahead.
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