Next Scottish government faces ‘really difficult’ spending choices, economists say
The next Scottish government will face significant financial challenges, requiring difficult spending decisions due to a persistent gap between income and expenditure. Economists warn that past reliance on one-off revenues has masked long-term fiscal issues, and future budgets may need substantial cuts. Public sector pay, rising social security costs, and constrained revenue growth are key pressures.
- ▪The Fraser of Allander Institute says Scottish public spending has grown faster than its income since 2019, with spending rising 3.9% annually versus income growth of 3.6%.
- ▪The Scottish government spends nearly half of its £59bn annual budget on public sector pay, and has already used most of its planned 9% three-year pay rise cap within two years.
- ▪The Scottish Fiscal Commission forecasts only 1% annual growth in day-to-day service spending over the next five years, while the social security bill is expected to exceed the UK’s by £1.2bn by 2031.
- ▪Economists from the Fraser of Allander Institute and the Institute for Fiscal Studies say none of the parties’ manifestos offer fiscally credible plans for addressing the shortfall.
- ▪The last SNP government relied on non-recurring revenues, such as ScotWind fees and one-off Treasury payments, to fund ongoing spending commitments.
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Holyrood, where the SNP government has been accused of consistently spending more money than it has received from its core sources of funding. Photograph: Jane Barlow/PAView image in fullscreenHolyrood, where the SNP government has been accused of consistently spending more money than it has received from its core sources of funding. Photograph: Jane Barlow/PAScottish politicsNext Scottish government faces ‘really difficult’ spending choices, economists sayParties accused of ‘fiscal denial’ and failing to tell voters the scale of the challengeSeverin Carrell Scotland editorTue 5 May 2026 00.00 EDTLast modified on Tue 5 May 2026 00.10 EDTSharePrefer the Guardian on GoogleThe next Scottish government will need to make “really difficult” spending decisions soon after taking power, including…
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