The Scottish Parliament’s Finance and Public Administration Committee has said it cannot determine whether the Scottish government’s tax and spending plans are affordable, citing a lack of transparency from ministers and warning of ‘substantial risks’ to next year’s Budget.
In a report, MSPs said the government must provide “much greater transparency” on its progress in closing a forecasted £5bn gap in the nation’s finances. The committee took evidence from public bodies, local authorities and economic experts but said it was unable to make a determination due to insufficient answers from ministers.
The committee noted that the country faces “significant financial pressures”, including an anticipated budget shortfall of £2.6bn for day-to-day spending and £2.1bn in capital funding by 2029-30. The committee also noted economic pressures from inflation and rising energy prices, alongside a £720m reduction in next year’s Budget because of weaker-than-expected income tax receipts compared with the rest of the UK. The committee also highlighted that the UK government’s prioritisation of defence spending could reduce capital funding for Scotland by £87m.
The Scottish government has announced plans for major overhauls of public services, including proposals to shrink the number of NHS boards and regional councils, in a bid to make savings. However, the committee warned that the budget faces “substantial risks” if the three pillars of its Fiscal Sustainability Delivery Plan, including ambitious public service reform targets, are not delivered in full and on time.
Finance committee convener Clare Haughey, an SNP MSP, acknowledged the “scale of the pressure on the Scottish Budget” but said her committee had “insufficient evidence to determine whether the Scottish government’s tax and spending plans are affordable and sustainable”. She called for greater transparency on progress in closing the fiscal gap and meeting reform targets, and urged the government to publish an updated Fiscal Sustainability Delivery Plan alongside the Budget, due on 3 December, and resume annual publication of the medium-term financial strategy.
Scottish Conservative finance spokesperson Craig Hoy said: “Even one of their own backbenchers who leads this committee says it is typically shrouded in SNP secrecy. This reeks of more economic incompetence from the nationalists, who are already presiding over a £5bn funding gap in Scotland’s finances.”
A Scottish government spokesperson said the government has “delivered a balanced budget every year” and published a comprehensive strategy and delivery plan to close the gap between funding and spending by 2029-30, while focusing spending on frontline services. The Scottish government has said its funding package for 2027-28 would mean a real-terms cut of £650m; the spokesperson said this would reduce “the money we have to spend on public services and supporting people with the cost of living”. The government said it would consider the committee’s recommendations within its current fiscal constraints and respond after Finance Secretary Jenny Gilruth announces the Budget next month.
Analysis
Why This Matters
- The committee’s inability to determine affordability undermines confidence in the Scottish government’s financial management ahead of the 3 December Budget.
- The warning of “substantial risks” to next year’s Budget could affect public services, including NHS and council funding, if reform targets are not met.
- The report highlights growing financial pressures from both UK government policies and Scotland’s own fiscal position, with implications for tax and spending decisions.
Background
Scotland’s devolved government has control over income tax rates and bands, as well as some social security powers, but remains reliant on a block grant from the UK government. The Scottish Budget has faced repeated pressure from weaker-than-expected tax receipts and inflation. The Scottish government has published a Fiscal Sustainability Delivery Plan aiming to close a projected funding gap by 2029-30 through public service reform, economic growth and increased tax revenue. The Finance and Public Administration Committee’s scrutiny is part of the annual budget process.
Key Perspectives
Finance Committee convener Clare Haughey (SNP): said there was “insufficient evidence to determine whether the Scottish government’s tax and spending plans are affordable and sustainable”, and called for “much greater transparency” on progress in closing the fiscal gap and meeting reform targets.
Scottish Conservative finance spokesperson Craig Hoy: said the committee’s finding showed “more economic incompetence from the nationalists, who are already presiding over a £5bn funding gap in Scotland’s finances”.
Scottish government spokesperson: said the government has “delivered a balanced budget every year” and has a comprehensive strategy and delivery plan to close the funding gap by 2029-30, while noting the impact of UK government funding cuts.
What to Watch
- The Scottish Budget announcement on 3 December, which will show whether the government includes an updated Fiscal Sustainability Delivery Plan and medium-term financial strategy as the committee requested.
- The government’s formal response to the committee’s report, expected after the Budget.
- Progress on public service reform targets, particularly the proposed reduction of NHS boards and regional councils, as any delays could increase fiscal risks.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedThe committee was unable to determine whether the Scottish government’s tax and spending plans are affordable.BBC Scotland: “A Holyrood committee says it has been unable to determine whether the Scottish government's tax and spending plans are affordable due to a lack of transparency from ministers.”
- SupportedThe committee warned of substantial risks to next year’s Budget if plans to reform services, boost growth and increase the tax take are not delivered.BBC Scotland: “The committee warned of "substantial risks" to next year's Budget if ministers fail to deliver on plans to reform public services, boost economic growth and increase the tax take.”
- SupportedThe committee said ministers must provide much greater transparency on progress in closing a forecasted £5bn gap in the nation’s finances.BBC Scotland: “MSPs on the Finance and Public Administration Committee said in a report that the government must provide "much greater transparency" on its progress in closing a forecasted £5bn gap in the nation's finances.”
- SupportedThe committee took evidence from public bodies, local authorities and economic experts but could not determine affordability because of a lack of answers from ministers.BBC Scotland: “The finance committee had taken evidence from public bodies, local authorities and economic experts to determine the affordability of the government's tax and spending plans, but said it was unable to do so due to a lack of answers from ministers.”
- SupportedThe committee cited anticipated shortfalls of £2.6bn for day-to-day spending and £2.1bn in capital funding by 2029-30.BBC Scotland: “It highlighted an anticipated budget shortfall of £2.6bn for day-to-day spending, such as paying public sector wages, and £2.1bn in capital funding, to pay for long-term infrastructure projects, by 2029-30.”
- SupportedThe committee noted pressures from inflation and rising energy prices, and a £720m reduction in next year’s Budget because of weaker-than-expected income tax receipts compared with the rest of the UK.BBC Scotland: “Meanwhile, the Scottish government must contend with a £720m reduction in next year's Budget because of weaker-than-expected income tax receipts compared with the rest of the UK.”
- SupportedThe committee highlighted that UK defence-spending priorities could reduce Scotland’s capital funding by £87m.BBC Scotland: “The finance committee also highlighted that the UK government's prioritisation of defence spending could reduce capital funding for Scotland by £87m.”
- SupportedThe Scottish government announced plans to shrink the number of NHS boards and regional councils in a bid to make savings.BBC Scotland: “The Scottish government has announced plans for major overhauls of public services, including proposals to drastically shrink the number of NHS boards and regional councils, in a bid to make savings and improve efficiency.”
- SupportedClare Haughey said the committee had insufficient evidence to determine whether the government’s tax and spending plans were affordable and sustainable.BBC Scotland: “"However, we have insufficient evidence to determine whether the Scottish government's tax and spending plans are affordable and sustainable," she said.”
- SupportedCraig Hoy said the committee was typically shrouded in SNP secrecy and that the nationalists were presiding over a £5bn funding gap.BBC Scotland: “"Even one of their own backbenchers who leads this committee says it is typically shrouded in SNP secrecy." He added: "This reeks of more economic incompetence from the nationalists, who are already presiding over a £5bn funding gap in Scotland's finances."”
- SupportedThe Scottish government said it had delivered a balanced budget every year and published a strategy and delivery plan to close the funding-spending gap by 2029-30.BBC Scotland: “"This government has delivered a balanced budget every year and a comprehensive strategy and delivery plan has been published which sets out how we will close the gap between funding and spending by 2029-30”
- SupportedThe Scottish government said its 2027-28 funding package would mean a real-terms cut of £650m.BBC Scotland: “The Scottish government has said that its funding package from the UK government in 2027-28 will suffer a real-terms cut of £650m as a result of the measures announced in the chancellor's UK Budget.”