Scottish ministers have 'limited funds' to help people

Summary

Finance Secretary Kate Forbes outlines the Scottish government's Spending Review
She tells Holyrood that there is limited support she can give people in Scotland who are facing the cost-of-living crisis
The Scottish Conservative's Liz Smith says it is clear that the Scottish government has been incompetent at handling the country's finances
The Institute for Fiscal Studies (IFS) warns of an estimated £3.5bn funding gap by 2026/27
The shortfall is the equivalent of £640 per person and the IFS warned it could rise even higher
The Scottish Fiscal Commission has also published updated economic and fiscal forecasts for the period to 2027

Live Reporting

BBC Scotland News

'We can't prioritise everything'published at 14:39 British Summer Time 31 May 2022
This Twitter post cannot be displayed in your browser. Please enable Javascript or try a different browser.View original content on Twitter
The BBC is not responsible for the content of external sites.
Skip twitter post
Allow Twitter content?
This article contains content provided by Twitter. We ask for your permission before anything is loaded, as they may be using cookies and other technologies. You may want to read Twitter’s cookie policy, external and privacy policy, external before accepting. To view this content choose ‘accept and continue’.
The BBC is not responsible for the content of external sites.
End of twitter post
Forbes accuses the UK government of 'sitting on its hands'published at 14:36 British Summer Time 31 May 2022
When the UK Spending Review in October set out funding for the Scottish Budget, inflation was 3.1%," Ms Forbes tells the chamber.
"Despite inflation hitting 9% the UK government has not updated its spending plans, leaving us with far less funding in real terms."
The finance secretary accuses the UK government of "sitting on its hands".
"The chill winds of Tory austerity are blowing when it comes to spending on public services," she adds.
The funding positionpublished at 14:34 British Summer Time 31 May 2022
Ms Forbes continues: "The funding I have at my disposal is mainly based on the existing block grant settlements implied by the 2021 UK spending review and the forecasts from the Scottish Fiscal Commission.
"These judgements can change over time, in response to the available data and economic outlook, and of course as a result of decisions taken by the UK government."
The finance secretary cites the first Medium Term Financial Strategy back in 2018 which set out the expected budget for 2022-23, by way of an example.
She says in reality, that projection was out by around £7 billion.
Minister: Scotland does not have 'tools and levers' others have to tackle crisispublished at 14:31 British Summer Time 31 May 2022
Ms Forbes reiterates her concern that Scotland has to "face these challenges without the tools and levers that others have at their disposal."
She welcomes the targeted grant-based support announced by the Chancellor last week, but says £400 per household is less than half of the predicted forthcoming rise in the energy price cap.
The Chancellor’s efforts were in reserved areas, so there is little consequential funding, explains the minister.
She tells the chamber today’s Resource Spending Review is not a budget and stresses we will have to wait to hear about future tax decisions.
"However, it is essential to share high-level financial parameters with public bodies, local government and the third sector, so that we can plan ahead together."
Pressures are mounting, says finance secretarypublished at 14:24 British Summer Time 31 May 2022
Finance Secretary Kate Forbes begins by reminding us Scotland is still recovering from the Covid pandemic.
Ms Forbes also highlights the acute pressure on the NHS, business and the wider economy, as well as the Russian invasion of Ukraine.
The UK currently has the highest inflation of any G7 country, explains the finance secretary.
"We are experiencing an unprecedented cost of living crisis," she says.
Spending Review begins...published at 14:19 British Summer Time 31 May 2022
Finance Secretary Kate Forbes gets to her feet to begin her statement at Holyrood amid growing pressure on her to balance the books.
The effect of inflation pushing up prices and public sector workers seeking improved pay settlements are among the challenges she faces.
The Institute for Fiscal Studies (IFS) has warned of an estimated £3.5bn funding gap by 2026/27.
'Difficult decisions' required to balance the bookspublished at 14:18 British Summer Time 31 May 2022
Glenn Campbell
BBC Scotland Political Editor
The finance secretary, Kate Forbes, has warned that “difficult decisions” will be required to keep the Scottish government’s books balanced as the financial outlook worsens.
The minister is today setting out her spending plans for the next few years in a Holyrood statement.
With inflation pushing up prices, lower than expected income tax revenues and expensive spending commitments to fulfil, the Scottish government’s finances are under growing pressure.
Add to that demands for more generous pay settlements from public service workers struggling with the cost of living.
The Institute for Fiscal studies has warned of a potential multi-billion pound gap in the Holyrood administration’s finances — that may require spending cuts or higher taxes to fill unless there’s extra cash from the UK Treasury.
The finance secretary is expected to set out how she intends to tackle the problem in parliament this afternoon.
Tory MSP asks about ScotRail's contingency plans...published at 14:11 British Summer Time 31 May 2022
Image source, Getty Images
Image caption,
More trains will be available to Hampden but most services outside Glasgow will not be running after the game
Not long to go now before Kate Forbes gets to her feet, but first MSPs are asking topical questions.
Tory MSP Graham Simpson asks what contingency plans the government has in place should train drivers reject the latest pay offer, in light of the reported hundreds of cancellations at the weekend.
Extra train services have been laid on for football fans travelling home from Scotland's semi-final play-off match against Ukraine on Wednesday.
ScotRail made the announcement hours after warning supporters travelling further than Glasgow city centre they were unlikely to get home by train.
Critics described the move as a "U-turn... after a day of chaos".
ScotRail said 13 post-match services had been added.
Six things to look out for in the spending review and fiscal forecasts...published at 14:05 British Summer Time 31 May 2022
Image source, Getty Images
Image caption,
Kate Forbes should get to her feet around 2.20pm after topical questions.
The Fraser of Allander Institute have helpfully published six things to look out for this afternoon:
1. How much detail will the government provide about its spending plans?
2. How will the government address uncertainty?
3. What insights will we get into the government’s policy commitments… and the implications for non-prioritised areas of spending?
4. How significantly will the economic outlook deteriorate?
5. What will be the implications of the fiscal forecasts for income tax and the Scottish budget?
6. What will the MTFS tell us about the government’s wider strategic ambitions?
Read more of the FAI article here, external
The Scottish government's spending plan...challenges aheadpublished at 13:55 British Summer Time 31 May 2022
Douglas Fraser
Scotland business & economy editor
Image source, Reuters
Image caption,
The Covid-19 pandemic has had a major impact on Scotland's economy
It's a spending plan, but not a conventional budget. Kate Forbes' statement at Holyrood will tackle a large, looming deficit, but not as we know that either.
It is, officially, a Resource Spending Review, plus a "targeted review" of capital spending (targeted at ferry-building, perhaps?) plus a Medium-Term Financial Strategy.
But no-one knows much about those at Holyrood, as they're such rare creatures, and previous appearances have not given them much of a predictable shape.
There is a further announcement made online as Kate Forbes sits down on Tuesday afternoon: the Scottish Fiscal Commission sets out its independent forecast for revenue and for growth, for the first time since December.
Back then, inflation was expected to rise as high as 4.4% and growth to reach 2.2%. Instead, there's a war in Ukraine, inflation is heading past 10%, and there's a high risk of recession later this year.
With that background, there is some mystery ahead of Kate Forbes' address to MSPs on Tuesday, as they digest their lunch.
Analysis: 'Difficult decisions' for Kate Forbespublished at 13:52 British Summer Time 31 May 2022
Douglas Fraser
Scotland business & economy editor
Image source, PA Media
Image caption,
Finance Secretary Kate Forbes will be setting out the Scottish government's spending plans
Our business and economy editor outlines some of the challenges facing Kate Forbes:
- A growing gulf between Holyrood revenue and spending is reaching crunch point, as the finance secretary today sets out plans up to the next election.
- The gap by then is on course to be £3.5bn but it could top £10bn, according to the Scottish government's own projections.
- With income tax raising less than expected, and health costing more post-Covid, rising prices, more generous welfare benefits and pressure for higher public sector pay are building up a long list of uncertainties.
Tough spending calls needed, says finance secretary Forbespublished at 13:47 British Summer Time 31 May 2022
Image source, Getty Images
Image caption,
Kate Forbes will set out her spending review on Tuesday
Scotland's economy is in a "very difficult position" which will force tough spending decisions in the coming months, the finance secretary has said.
Kate Forbes said tackling the cost-of-living crisis while still feeling the effects of the pandemic made her upcoming financial review critical.
It came after the Institute for Fiscal Studies (IFS) warned of an estimated £3.5bn funding gap by 2026/27.
Opposition parties have criticised the government's spending "mismanagement".
The IFS has said the government could be forced to choose between axing key policy priorities or increasing taxes to tackle the deficit.
The shortfall is the equivalent of £640 per person and the IFS warned it could rise even higher.
Ms Forbes' spending review will be the first time a multi-year plan has been announced in more than a decade.
Read more here
Welcomepublished at 12:06 British Summer Time 31 May 2022
Image source, PA
Image caption,
Kate Forbes will begin her statement around 2.20pm
Good afternoon and welcome to our live coverage of the Scottish government's Spending Review on 31 May 2022.
Finance Secretary Kate Forbes will make a statement at Holyrood amid growing pressure on her to balance the books.
The effect of inflation pushing up prices and public sector workers seeking improved pay settlements are among the challenges she faces.
The Institute for Fiscal Studies (IFS) has warned of an estimated £3.5bn funding gap by 2026/27.