Scottish Government borrowing limits raised to nearly £5bn
The Scottish Government's borrowing limits are set to be raised to nearly £5bn in total.
Scottish secretary Ian Murray announced that Scotland will have increased borrowing powers following a debate to be held in the UK Parliament on Wednesday morning.
'I'm very pleased to be taking forward this important Scotland Act Order, which increases the Scottish Government's cumulative borrowing limits to a total of £4.9bn,' Murray said.
'These borrowing powers are on top of the Scottish Government's record funding settlement of £50 billion this financial year, ending austerity.'
The debate to raise Scotland's borrowing powers follows a draft Order laid by Murray.
It will increase the Scottish Government's borrowing limits to a cumulative total of more than £3.1bn for capital and £1.8bn for resource.
It's all part of the Fiscal Framework that sets out the Scottish Government's financial arrangements – including how its UK Government funding is calculated.
The framework also gives the Scottish Government power to borrow money to handle the tax and social security reconciliations, through which the Budget is adjusted to correct errors in forecasting.
In response to the updated borrowing limits, Scottish finance secretary Shona Robison said that Scotland's finances 'remain largely dictated by the spending decisions of the UK Government'.
'To give just one example, by funding less than half of the cost of their employer National Insurance increase, the UK Government has left Scotland's public services with a bill running into hundreds of millions of pounds,' she said.
'While the Fiscal Framework Agreement gives some limited flexibility to manage budget volatility, it remains very narrow due to the approach of the Treasury.
Robison added: 'The only way we will have control of all fiscal levers and the full flexibility to address the challenges that emerge is through independence.'
However, Murray emphasised that the UK Government has 'reset the relationship' with the Scottish Government.
'This Order is a key part of our commitment to maintain the devolution settlement,' he said.
The Scottish Government borrowing limits are (both annual and cumulative) are uprated annually in line with the UK's independent economic and fiscal forecaster – known as the Office for Budget Responsibility (OBR).
Officials in both the UK Government and the Scottish Government worked together to deliver the Order, as they do with all Scotland Act Orders. The new limits will take effect from June 30.
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