Secondly, as a consequence of that issue, for the first time since this government took power, I am announcing a Budget today for the next financial year assuming that we do not carry forward any fiscal resources from this year into next. There are however two key points that I must advise Parliament about in relation to the Budget for this current year.įirstly, despite reductions in spending of £1.2 billion, the financial pressures are so great that I am still working in this financial year to find a path to fully balance this year’s Budget. Taken together, in 2022-23, the Scottish Government has allocated almost £3 billion to help mitigate the cost of living crisis in these difficult days. The Emergency Budget Review allowed us to meet the costs of increased public sector pay and provide further help to those most impacted by the cost of living crisis. Despite repeated requests, no additional resources have been forthcoming for this year. We had to do this because, once a financial year commences and in the absence of borrowing powers to address in year volatility or the ability to alter Income Tax rates midway through a financial year, we operate a largely fixed total Budget unless the United Kingdom Government allocates any additional resources to Scotland. The public sector is not in any way immune from the rising costs of energy and inflation placing additional, real pressures on the value of our Budget.Īs a result of these factors, in the autumn the Scottish Government had to make unprecedented reductions to our spending plans mid-way through the current financial year totalling £1.2 billion. We have made, and are continuing to make, financial provision to support Ukrainian resettlement costs. Scotland will always play our part in supporting those fleeing conflict and persecution. We have seen thousands of people in Scotland open their homes in response to war - an example of our country at its very best. We continue to deal with the unforeseen – but accepted – costs of resettling refugees fleeing the illegal war in Ukraine. In response, we reallocated over £700 million more than originally budgeted to enhance pay uplifts to better reflect the increased cost of living and especially to tackle low pay. Before I set out our financial plans for the forthcoming year, I must provide Parliament with an update on this financial year, given the extreme pressure that the Scottish Government Budget faces at the present moment.Īs a result of soaring inflation, we have faced significant, and entirely understandable, pay demands from public sector workers. I am wrestling with those challenges right now. These times require Governments to lead, to make choices, to decide what matters, and that is what this Government has resolved to do.Īs Parliament knows, those hard realities are not just about future years. In short Presiding Officer, these are spectacularly difficult times in which to manage the public finances. If these challenges – faced by countries around the globe were not enough - the United Kingdom has added to the turmoil by a disastrous approach to Brexit which has damaged labour supply through the loss of free movement of people and undermined frictionless trade with our nearest markets.Īnd all of these difficulties have been compounded by the utterly catastrophic decisions of the United Kingdom Government in the September mini Budget, which have driven increases in interest rates and saddled the country with much higher debt, undermining the public finances for generations to come. Inflation is now corroding our economy having reached a 40 year high. As a result of the conflict, energy and fuel prices are surging. ![]() ![]() War is taking place in Europe, leading to the suffering and displacement of millions of Ukrainians. ![]() The Scottish Government Budget for 2023-24 takes place in the most turbulent economic and financial context most people can remember.
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