London Daily

Focus on the big picture.
Friday, Jul 17, 2026

Tough spending calls needed, says finance secretary Forbes

Tough spending calls needed, says finance secretary Forbes

Scotland's economy is in a "very difficult position" which will force tough spending decisions in the coming months, the finance secretary has said.

Kate Forbes said tackling the cost-of-living crisis while still feeling the effects of the pandemic made her upcoming financial review critical.

It came after the Institute for Fiscal Studies (IFS) warned of an estimated £3.5bn funding gap by 2026/27.

Opposition parties have criticised the government's spending "mismanagement".

The IFS has said the government could be forced to choose between axing key policy priorities or increasing taxes to tackle the deficit.

The shortfall is the equivalent of £640 per person and the IFS warned it could rise even higher.

Ms Forbes' spending review on Tuesday will be the first time a multi-year plan has been announced in more than a decade.


'Need to be canny'


The finance secretary said she will set out plans to focus public sector funds "to achieve ambitions to tackle child poverty, reach net zero and deliver sustainable services for the future".

She said: "These are challenging times, and we need to be canny with our spending, but I'm confident that if we work together we can get through this cost-of-living crisis and still achieve our ambitions.

"We face a very difficult financial position over the next few years with funding increases below inflation levels and the challenge of recovering from the pandemic without the financial tools available to every other government in the world.

"That means that while the spending review is not a budget, it will include difficult decisions to ensure we can really focus on supporting households and services at this time."


The Scottish government is using its new welfare powers for more generous benefits than in the rest of the UK.

It faces heath service backlogs coming out of the Covid crisis, and income tax - although raising rates for higher Scottish earners - is generating less revenue than expected.

So the Institute of Fiscal Studies warned on Friday that either taxes will have to go up, significant cuts will be required or, with tightly constrained borrowing powers, Kate Forbes could simply hope that Westminster will deliver more funding than it has set out so far.

This week's review of non-capital spending until 2026 to 20227, the end of this Parliamentary term, should show which of these ministers are choosing.

In setting expectations, Kate Forbes today warns the difficult financial position will require difficult decisions, with a focus on protecting households and services.

But opposition parties have condemned the Scottish government's handling of the economy.

Scottish Conservatives finance spokesperson Liz Smith MSP said: "It appears Kate Forbes' response to warnings from the IFS of a £3.5bn black hole in the SNP government's spending plans is to stick her fingers in her ears.

"Years of economic mismanagement by the SNP - including squandering taxpayers' cash on failed public sector projects like the ferries fiasco - has left Scotland's finances in a perilous state. Yet there is no acknowledgement of this in Ms Forbes' pre-spending review spin.

"The reality is Scots face big public spending cuts, huge tax rises or a combination of both if the SNP are to bridge the huge funding gap they've created."

Daniel Johnson, Scottish Labour's finance spokesperson, said the IFS assessment "laid bare" the price of "SNP economic failure".

He said: "It is clear that the spending review will reveal the heavy cost of the SNP economic mismanagement.

"You can hear them trying to get the excuses in now, but the truth is that during a cost-of-living crisis, Scots will pay for nationalists prioritising the constitution over the economy.

"This will be counted in lost jobs, cuts to public services and few will be able to forgive the SNP for it."

Newsletter

Related Articles

0:00
0:00
Close
Britain Nationalises British Steel to Protect Scunthorpe Production and Strategic Supply
Andy Burnham Takes Labour Leadership and Prepares to Become Britain’s Seventh Prime Minister in a Decade
Tech Companies Want to Move Computing Off Your Screen and Onto Your Body
White House Teleprompter Operator Earned More Than $100,000 From Bets Linked to the President's Speeches
French Prime Minister Survives No-Confidence Vote After Controversial Budget Cuts
European Commission Opens Excessive Deficit Procedure Against France
French Senate Blocks Key Immigration Reform Measures
French Government Pushes EU Action Against Ultra-Fast Fashion Imports
French Parliament Debates Expanded Autonomy Powers for Corsica
France Reopens Autonomy Talks With New Caledonia After Months of Unrest
Bordeaux Wine Producers Seek Three Hundred Million Euro Aid Package After Export Collapse
French Farmers Block Spain Border Crossings Over Imported Food Competition
Cannes Film Festival Bans Fully Artificial Intelligence-Generated Films From Competition
TotalEnergies Shifts More Than Three Billion Euros of Green Investment From Europe to the United States
LVMH Chief Executive Bernard Arnault Presents Succession Plan for Luxury Empire
Kering Reports Fifteen Percent Revenue Drop as Chinese Luxury Demand Weakens
Sanofi Reports Positive Results From Messenger RNA Respiratory Vaccine Trials
France Places Energy Price Caps Under Review to Protect Households Through Winter
EDF Connects Two New Nuclear Reactors to France’s Electricity Grid
Mistral Secures European Commission Contract for Sovereign Artificial Intelligence Models
Renault Opens Next-Generation Electric Battery Plant in Northern France
Air France Signs Two Billion Euro Sustainable Aviation Fuel Deal to Cut Emissions
Marseille Launches Three Billion Euro Port Expansion to Strengthen Mediterranean Trade Role
French-Owned Ubisoft Announces Global Restructuring With Nearly One Thousand Job Cuts
National Railway Operator Suspends Artificial Intelligence Ticket Pricing System After Consumer Backlash
United Kingdom to Ban Sales of High-Caffeine Energy Drinks to Under-Sixteens
Home Office Designates Iranian and Russian Paramilitary Groups as National Security Threats
National Health Service Launches Housing Plan to Retain London Healthcare Workers
British Heatwave Fuels Wildfires and Emergency Evacuations in Scotland
United Kingdom and Estonia Sign Defence Agreement to Strengthen NATO’s Eastern Flank
United Kingdom Cuts Bilateral Aid to African Nations by More Than Eighty Percent
Bank of England Overhauls Banking Rules to Encourage More Lending to Businesses
United Kingdom and India Free Trade Agreement Enters Into Force, Reshaping Bilateral Economic Ties
Andy Burnham Confirmed as New Labour Leader and Prime Minister-Designate
UK Government Faces Pressure Over Extreme Heat Workplace Rules
Lewisham Council Blocks Cooperation With Home Office Immigration Enforcement
UK Parliament Investigates Growing Pressures on Scotch Whisky Industry
Teen Hackers Sentenced Over Thirty-Nine Million Pound Transport for London Cyber Attack
Ministry of Defence Acquires Scottish Fuel Terminal to Strengthen Royal Navy Operations
Bank of England Eases Rules as Economic Growth Remains Weak
Bank of England Governor Warns Andy Burnham on Britain’s Long Economic Stagnation
UK Defence Ministry Buys Scottish Fuel Terminal to Secure Naval Energy Supplies
UK Secures Access to European Defence Contracts Through Ukraine Support Deal
Bank of England Plans Easier Capital Rules to Encourage More Lending
Met Office Says England and Wales Have Already Broken Summer Heat Records
Counter-Terrorism Police Lead Investigation Into Murder of Former Minister Ann Widdecombe
UK Government Nationalises British Steel to Protect Domestic Steel Production
French National Assembly Overrides Senate to Pass Historic Assisted-Dying Legislation
Spanish Prime Minister's Wife Ordered to Stand Trial as Corruption Probes Encircle Governing Party
Zelensky Faces Kyiv Protests Over Ousting of Dynamic Ukrainian Defense Minister
×