Swinney warned ‘significant’ spending cuts needed

Scotland’s top civil servant has warned First Minister John Swinney that “significant” cuts will be required to balance public finances.

Permanent Secretary John-Paul Marks said the budget-setting process this year was “one of the hardest experiences of prioritisation” since devolution.

Finance Secretary Shona Robison earlier confirmed that publication of the government’s medium term financial strategy and tax plans would be delayed until 20 June due to the recent change in first minister.

Mr Marks was appearing before the finance and public administration committee on Tuesday for his annual wide-ranging evidence session.

The Scottish government has faced financial pressure in recent budgets.

The Scottish Fiscal Commission previously cautioned that the country faced a deficit of £1bn by the end of this year and £1.9bn by the end of 2027-28 if changes were not made.

A shift in tax policy by former first minister Humza Yousaf’s administration was used as part of measures to plug a £1.5bn gap this year, but it is not clear how this will impact future budgets.

Scottish Labour MSP Michael Marra asked the permanent secretary if he had communicated to Mr Swinney there would need to be “significant spending reductions” as the first minister lays out his vision for the country.

Mr Marks replied that he had “already done that” and that it was a “risk” that needed to be “carefully addressed”.

He added: “I have been very open that I consider fiscal sustainability to be a significant risk that needs active mitigation now, and that has been under way through 2022-23 with the emergency budget review, through 23-24 as well where we used a set of very significant set of controls to reduce our outturn.”

The permanent secretary pointed to high inflation, backlogs caused by the pandemic and a real terms fall in the capital block grant, meaning the “right choices” had to be taken to balance the budget.

A spokesman for the first minister later said: “I don’t think it’s a secret that we’re under significant pressure.

“The first minister himself has said that in the chamber – that’s obviously been a reality for some time. We’ve had 14 years of austerity, that’s the way it is.

“Obviously inflation and other issues in the economy are causing problems.”

The announcement that the first fiscal event of Mr Swinney’s administration will take place on 20 June, just over a week before the summer recess was questioned by committee convener Kenneth Gibson.

In her letter, the finance secretary said she would be available to appear before the committee the following week.

Mr Gibson said that the delay was “not really acceptable from a scrutiny point of view”.

He added: “It makes it extremely difficult for clerking teams to get papers out to members, let alone for members to absorb it to have any meaningful strategy in our last committee meeting on the Tuesday before recess.”

Mr Swinney is understood to be making a statement to Parliament this week on the direction of his government, which Mr Marks said would have an impact on the strategy.