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Scottish Government Faces £1 Billion Shortfall in Day-to-Day Spending Plans for Upcoming Year

Scottish Government Faces £1 Billion Shortfall in Day-to-Day Spending Plans for Upcoming Year

The Scottish government faces a £1 billion shortfall in its day-to-day spending plans for the upcoming year, according to the Scottish Fiscal Commission.
The commission also forecasts a £1.9 billion shortfall in the next four years, which would equate to 4% of the resource budget when the government is required to balance spending with income.

Finance Secretary Shona Robison said the outlook was "extremely challenging," and that tough choices would be made in the upcoming budget.

The capital budget is expected to fall by 14% in real terms within the next four years, leaving a gap between available funds and investment plans of £900m by 2025.

Robison also announced a review of tax options to raise more funds from those best able to pay, and set out details of the Fiscal Commission's report, including a fall in real-terms disposable income for the average Scottish household of 4.1% between 2021 and this year, the biggest fall on record.

The independent commission said inflation could be expected to average more than 6% this year, falling to 2.9% by the end of the year, and then going much lower.

The report also said that the outlook had improved since the assessment it published in December, but the Scottish economy is expected to grow slowly and recover from recession on course.

Liz Smith, the Scottish Conservatives' finance spokeswoman, criticized the Scottish National Party (SNP) for its "utter failure" to manage the economy, citing a "significant gap" between spending and resources.

She also highlighted the negative impact of high taxes on the Scottish business community, which has led to a "record fall in living standards" among Scots, with household disposable income dropping.

Labour's Michael Marra echoed these concerns, stating that there is a lack of strategy to grow wages and help household income in Scotland.

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