The Scottish government faces “tough choices” to sustainably balance the financial books, a parliamentary committee has said.
MSPs have urged the government to be transparent about its priorities, funding and timelines, as well as the potential impact on service delivery, when it sets its budget next month.
The Finance Committee said there needed to be “an open and honest debate with the public about how services and priorities are funded, including the role of taxation”.
Its pre-budget review report also concluded that the UK government should “recognize the inflationary impacts on the Scottish Block Grant”.
Manager Kenneth Gibson said: “Our committee accepts that the Scottish Government faces tough choices in balancing its approaches to spending and taxation – particularly when it comes to maintaining financial sustainability and supporting households and businesses during the cost of living crisis.”
On the wider UK context, he added: “Now is the time for the UK government to focus on putting in place measures to bring more stability to the UK economy.”
John Swinney – replacing Kate Forbes while she is on maternity leave – will set the budget for the next financial year in December.
MSPs will then have the opportunity to review the budget as a draft law early in the new year.
With the deal between the SNP and the Greens giving the government a minority, few changes are likely to be made to the initial plan.
The Finance Committee asked for more clarity on the impact of economic pressures on net zero programs, as well as preventative measures that could save money in the long run.
On the cuts to be made in the public sector workforce to partly pay for the new pay deal, MSPs said the government needed to address this in a “systematic, transparent and coordinated way”.
The report also acknowledged the continued pressure on local government finances and urged the government to consider giving them greater flexibility to respond to local priorities.
It comes after Swinney yesterday confirmed further budget cuts to plug a black hole in public finances caused by inflation and public sector wage deals.