Kate Forbes signals public sector pay restraint as financial black hole looms

dailyrecord.co.uk:

Finance Secretary Kate Forbes has signalled a tight grip on public sector pay as she faces up to a multi-billion pound funding black hole.

Delivering a four-year spending review, the SNP / Green Government is aiming to freeze the overall pay bill at 2022/23 levels.

Forbes’ plan also looks like providing a very tight settlement for local government and policing while also reducing the size of the public sector to pre-covid levels.

Her Holyrood statement was the foundation of the Government’s day-to-day spending plans for the four years until 2027.It came after the Institute for Fiscal Studies (IFS) warned that Scottish ministers face “tough decisions” over a projected budget gap of £3.5 billion over the end of the period.Part of the funding gap is caused by a combination of sluggish tax receipts, increased social security spending and pressure placed on public services by the pandemic.The Government also has costly policies to deliver, such as creating a national care service, expanding free school meals and increasing spending on the NHS.Sky high inflation is also leading to unions demanding large pay rises just to avoid their members receiving an effective pay cut.Addressing MSPs, Forbes pinned the blame on the funding settlement from Westminster:“Following a real terms reduction of 5.2 per cent between last year and this, our real terms funding grows by only 2 per cent across the whole four year period, after accounting for the devolution of Social Security benefits.”She said the “stark reality” of Scotland’s financial position was caused by the Tory Government making a “deliberate choice” and sitting on their hands.She added: “It lays bare the constraints of the current fiscal framework - our budget largely decided