Kate Forbes

Yesterday, the government announced that it has allocated a further £2.5bn in response to COVID-19.

The revision includes a £1.8bn allocation for health and social care, an extra £190 million for business and the arts and a £119m increase for education. They are funded by £2.38bn of COVID-19 consequentials generated by UK Government spending, £142m of Scottish Government savings and the reprioritisation of existing budgets, plus £30m from reserves.

Publishing the ABR yesterday, finance secretary Kate Forbes warned that significant budget challenges lie ahead.

Ms Forbes said: “Every penny of the COVID-19 consequentials guaranteed by the UK Government is being allocated against existing commitments, but 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.”

She added: “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. If it fails to do so, it must increase guaranteed funding to the devolved administrations to enable us to provide a sufficient response to the continuing crisis.

“Instead, 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.

“So 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.”