Today the Scottish Fiscal Commission sets out the fiscal pressures facing the next Scottish Parliament to be elected in May. Drawing on its previous work on the Scottish Budget and fiscal sustainability, the Commission has looked ahead to the fiscal context facing the next parliament.
The Commission thinks that the fiscal outlook is likely to be challenging, because of substantial funding and spending pressures confronting any incoming government, and the lasting effects of previous policy choices.
The demand for public services is expected to rise. By the end of the next parliament in 2031, nearly a quarter of people in Scotland will be over 65, one million people will receive disability payments and living standards are expected to increase by less than 1 per cent per year.
The Scottish Parliament has also legislated targets on reducing child poverty by 2030 and needs to make progress towards net zero. Meeting these will require spending by the Scottish Government.
The Scottish Government is already under pressure to manage the size and cost of the public sector workforce. The current Scottish Government’s Spending Review in January committed to £1.5 billion of savings over the first three years of the next parliament.
The Commission’s Chair, Professor Graeme Roy, said
“Political parties must be realistic and open when making new commitments ahead of the May election. Their manifestos should make clear where additional spending pledges imply higher taxes or reductions in other areas of public spending.
The new Scottish Government must explain how it intends to address Scotland’s fiscal pressures, enabling parliament to debate and determine the most effective response to the challenges set out in this report.
Whatever priorities it chooses, the next Scottish Government must ensure that Scotland’s public finances are on a sustainable path.”