Spending to mitigate the impact of Covid-19 in Scotland has now topped £6.5 billion – but Finance Secretary Kate Forbes has warned the response could be hampered just as cases are surging again if the UK Government does not grant her plea for more borrowing powers.
She said spending in response to the pandemic has so far exceeded the amount of cash Holyrood ministers have been given by the Treasury, and they are now “severely limited” as to what they can do.
She has criticised Chancellor Rishi Sunak for cancelling the UK Budget, insisting it is “completely unacceptable” and will “increase uncertainty” over public finances in Scotland.
She said: “Not only is the UK Government denying us the financial powers needed to fully respond to the pandemic, it has also removed any clarity about how much funding we will receive.”
She was speaking as it emerged additional funding from the UK to fund the coronavirus fight has increased the Scottish Government’s current budget – which covers the year 2020-21 – to just short of £54.5 billion.
An extra £1.8 billion is being made available for health and social care, a further £222 million for public transport, £190 million more for business and the arts, and an additional £119 million for education.
This is being paid for with £2.38 billion coming to Scotland from Westminster as a consequence of spending decisions there, £142 million of Scottish Government savings and money diverted from other budgets, and £30 million from reserves.
The details were revealed in the Scottish Government’s autumn budget revision – which was published after it emerged the next UK Budget has been cancelled as the Chancellor focuses on the ongoing response to Covid-19.
Ms Forbes stressed “every penny” that has come to Scotland as a consequence of Westminster spending to tackle the virus is being allocated, but said: “Our funding requirements continue to far exceed the money we have received to date.
“The upturn in Covid-19 cases means demand for assistance will inevitably increase, yet the Scottish Government is severely limited in its response due to the financial constraints of devolution.
“We are doing all we can to protect public health, safeguard jobs and public services and to stimulate a sustainable economic recovery. But while other governments are financing their response through borrowing, we cannot do so.
“In light of the latest situation, I urge the UK Government to think again and grant the modest and temporary financial powers we, and the administrations in Wales and Northern Ireland, are asking for.”
She said if UK ministers do not give the devolved administrations additional borrowing powers, they must instead provide increased funding “to enable us to provide a sufficient response to the continuing crisis”.
She added: “The Chancellor has increased uncertainty by delaying the UK Budget.
“This is completely unacceptable as without the tax policy and other announcements of a UK Budget, the Scottish Budget for 2021-22, on which vital public services depend, would have to be based on provisional figures and be subject to much greater volatility.”