Plans to invest in Scotland’s future.
An ambitious but realistic public spending framework has been released which outlines how over £180bn will be invested to meet Scotland’s priorities.
The Resource Spending Review, which is not a budget, outlines how the Scottish Government will focus public finance in the coming years to tackle child poverty, tackle the climate crisis, strengthen the public sector so that Scotland recovers from Covid and develop a stronger, fairer society and greener economy.
A targeted capital expenditure review has also been released to deal with a reduction in capital investment by the UK government. As well as supporting the NHS and affordable housing, the capital spending review will invest around £18billion until March 31, 2026, with over half a billion in additional funding going towards net zero programs compared to to previous plans.
Finance Secretary Kate Forbes said:
“We are of course still recovering from the coronavirus pandemic. There is still acute pressure on the NHS, on businesses and on the wider economy. The illegal Russian invasion of Ukraine is a humanitarian crisis, which is affecting the global economy.Rising energy prices and restricted supply chains have affected countries around the world.Although inflation also has an impact on other countries, it does not affect them in the same way.
“The UK currently has the highest inflation of any G7 country – nearly twice the rate of France. Brexit has compounded this problem, with increases in food prices hitting the hardest We are experiencing an unprecedented cost of living crisis, inflation is at a 9% high in 40 years as households face considerable hardship.
“Today’s Resource Expenditure Review is not a budget. However, it is essential to share high-level financial metrics with public bodies, local communities and the third sector, so that we can plan together.
“Today I have set out an ambitious yet realistic public spending framework for the years ahead. It does not ignore the realities of our financial situation, but it also does not backtrack on our ambitions for change.”
Further changes to Scotland’s budget position and forecast for tax and social security are expected to change the funding picture ahead of annual budgets. The spending review, however, prioritizes dispatch in key policy areas. These are:
Fight child poverty and help households and businesses meet the cost of living
- £22.9bn for welfare
- increasing Scottish Child Payment from £10 to £25 and widening eligibility by the end of this year
- provide universal free school meals to primary school children from P1 to 5 and extend the offer beyond
- revaluation of the benefits devolved
Securing ofstrengthened public services
- invest £73.1 billion in health care and social services, including developing a National Care Service
- increase investment in frontline health services by 20% during this legislature
- spending more on primary and community care to ensure people get the right treatment in the right place
- £42.5bn funding for local government for service delivery
- investing £11.6 billion in the justice system
Reaching net zero and tackling the climate crisis
- up to £75m per year to implement the Heat in Building strategy, enabling £1.8bn investment in decarbonisation
- up to £95m to meet forest creation targets
- £46m to introduce the Community Bus Fund and increased funding for low fare transport schemes
- investment of over £12m in peatland restoration
- £4m in resource spending as well as £150m in capital and financial investments for the North East and Moray Just Transition Fund
Building a stronger, fairer and greener economy
- £581m capital investment to support the economy, including our corporate agencies and the Scottish National Investment Bank
- continue through the foreign investment plan to attract high-quality foreign investment in areas such as energy transition and the space sector
- advancing A Trading Nation’s export growth plan to increase Scotland’s international reach
- integrate entrepreneurship into education, to give young people the opportunity to create and develop businesses
The spending review provides a platform for engagement ahead of the next budget on how best to reform Scotland’s high-performing public sector to become more efficient and deliver ambitious results. This means rapidly digitizing the public sector, maximizing revenue through public sector innovation, reforming public sector assets and the landscape of public agencies, and improving public procurement.
The annual Medium-Term Financial Strategy was also released to provide the economic and fiscal context for the Resource Expenditure Review and the Capital Expenditure Review, including the fiscal challenges ahead.
Read the statement from the Cabinet Secretary to the Scottish Parliament in full here.
Read the full Resource Spending Review here, along with the Equalities and Fairr Scotland statement and analysis of responses to the RSR Framework consultation.
The medium-term financial strategy can be read here.
The capital expenditure review update is available here.
The resource expenditure review covers the years 2023-24 to 2026-27. This is not a budget and final spending plans will be presented to the Scottish Parliament in the respective annual budgets. Scottish ministers will continue to engage with unions on pay and workforce issues ahead of the Scottish Budget 2023-24.