London Daily

Focus on the big picture.
Friday, Jun 26, 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
Robert Jenrick Defends £5 Million Donation to Nigel Farage Amid Political Scrutiny
Plymouth Museum The Box Wins 2026 Art Fund Museum of the Year Award
UK Government Faces Backlash Over Plans to Use Former Military Sites for Asylum Accommodation
Labour Party Faces Pressure Over Cabinet Stability as Senior Figures Clash on Policy Direction
Heathrow Airport Forecasts Passenger Decline in 2026 as Costs and Climate Disruption Mount
UK Energy Regulator Approves Expansion of Long-Duration Storage to Boost Power System Resilience
Crown Estate Reports Third Consecutive Year of £1 Billion Profit as Debate Over Royal Finances Intensifies
Teenager Charged With Murder in Wales Following Death of 14-Year-Old Boy
Nottingham University Hospitals Maternity Failures Trigger Calls for Public Inquiry Into Patient Safety
EasyJet Rejects £4.9 Billion Takeover Offer From Castlelake but Keeps Door Open for Further Talks
Record Heatwave Triggers UK Transport and Infrastructure Strain as Heathrow Revises Passenger Forecast Downward
Ofgem Approves Sixteen Long-Duration Energy Storage Projects to Strengthen UK Grid Stability
Labour Government Faces Internal Tensions Over Cabinet Decisions and Net Zero Policy Direction
British Food and Drink Exports Fall to Decade Low Amid Trade Friction and US Tariffs
Great Britain Grid Operator Spends £10 Million to Stabilize Electricity Supply During Heatwave Demand Surge
UK Parliament Committee Calls for Urgent National Adaptation Strategy as Extreme Heat Strains Public Infrastructure
Record-Breaking Heatwave Pushes England’s National Health Service to Critical Incident Status as Hospitals Struggle With Surge in Emergencies
UK Government Launches Review of Voluntary National Insurance Contributions System
UK Planning Inspectorate Reports Key Infrastructure and Planning Milestones in Annual Review
UK Government Reviews Travel Expense Reimbursement Rates for Employers and Employees
Civil Nuclear Constabulary Launches National Digital Memorial for Officers Killed in Service
UK and US Expand Collaboration on Nuclear Fusion Research and Workforce Exchange
Environment Agency Secures £275,000 Enforcement Deal with Anglian Water Over Permit Breaches
Independent Inspector Flags Ongoing Failures in UK Home Office Border Case Management
UK Government Considers Zero VAT Rate on Land for Social Housing Development
Bank of England Reports Sharp Drop in Emissions and Warns on Climate-Driven Financial Risk
Consumer Confidence in the UK Falls at Fastest Quarterly Rate Since 2022
UK Borrowing Costs Rise Sharply on Gilt Markets Amid Fiscal and Political Concerns
UK Government Plans Legislation to Bring British Steel into Public Ownership
UK Government Secures £210 Million Nuclear Fuel Deal to Support Ukraine Energy Security
London Ambulance Service Reports Record Emergency Call Volume Amid Severe Heatwave
United Kingdom Faces Record June Heatwave as Temperatures Hit 36.7°C in Somerset
UK Financial Services Reform Debate Intensifies Over Ministerial Regulatory Powers
UK Energy Price Cap Rise Expected to Keep Inflation Above Target Through 2026
UK Biohacking and AI Wellness Trends Drive Surge in Personal Health Monitoring
UK Social Care Sector Sees Workforce Shift as Overseas Recruitment Masks Domestic Labour Decline
Nuffield Trust Warns UK Health Budgets Remain Vulnerable Despite Record Spending Levels
UK Coal Pension Surplus Debate Returns to Parliament as Reform UK MP Seeks Clarity on Distribution
UK MPs Consider E-Petition Calling for NHS Newborn Screening for Spinal Muscular Atrophy
UK Parliament Debates E-Petition Calling for Inquiry Into Pro-Israel Influence in Politics
UK Economy Grew 0.6 Percent in Q1 2026 but Business Sentiment Weakens Over Geopolitical Risks
UK Financial Services Bill Enters Lords Committee Stage With Expanded Ministerial Powers
UK Armed Forces Bill Advances With Plans for Defence Housing Service and Drone Defence Measures
UK Treasury Proposes Higher Electricity Generator Levy and Updated Mileage Allowance Rules
UK Parliament Debates Health Bill Amid Persistent GP Access and Patient Satisfaction Concerns
UK Financial Sanctions Regulator Signals Faster, Intelligence-Led Enforcement Strategy
British Chambers of Commerce Warns Business Confidence Crisis Is Dampening UK Investment
UK Parliament Debates Carbon Budget Order as Pressure Mounts on Net Zero Delivery
UK Energy Price Volatility Reinforces Pressure for Faster Electrification of Economy
UK Defence and Aerospace Strategy Gains Momentum as Keir Starmer Pushes Industrial Cooperation in Berlin
×