The Scottish Government is facing cuts in the cash it receives from Westminster as a result of Chancellor Rachel Reeves’s decision to reduce welfare spending, MSPs have been told.
Holyrood Finance Secretary Shona Robison said she has received confirmation from the Treasury that “there will be cuts to our block grant from the welfare cuts from 2026-27 onwards”.
Her comments came shortly after Ms Reeves used her spring statement in the Commons to confirm a further squeeze in the welfare budget, building on cuts to the disability and incapacity bill set out earlier this month, with the package now expected to save £4.8 billion rather than the more than £5 billion in 2029-30 hoped for by ministers.
With much of social security now devolved to the Scottish Government, Ms Robison said its funding now faces being reduced.
She condemned the UK Government for its “repeated attacks on some of the most vulnerable members of society”, warning there is a risk of “creating a vicious cycle of reduced funding and increased demand” for welfare.
She hit out at the Chancellor, condemning her “austerity cuts” and claiming: “The UK Government appears to be trying to balance its books on the backs of disabled people.”
Ms Robison welcomed the £2.2 billion increase in defence spending confirmed by the Chancellor, but said UK Government choices to “short-change public services and deliver austerity cuts to some of the most vulnerable are deplorable”.
Criticism also came from John Dickie, director of the Child Poverty Action Group in Scotland, who said: “Stealth cuts to UK social security bring neither stability nor security to struggling families. They will push children into poverty across the UK, undermining the progress on child poverty being made in Scotland.
“The Westminster Government must invest in social security support – not cut it – or risk being remembered as the Labour administration under whose watch child poverty continued to rise.”
Roz Foyer, general secretary of the Scottish Trades Union Congress, claimed the Chancellor had “rushed through deeply damaging cuts to support for disabled people”.
She added: “No-one denies that this statement was made in the midst of testing domestic and international circumstances.
“However, the Chancellor had choices. She could have rewritten her self-imposed and self-defeating fiscal rules. She could have increased taxes on corporations or the wealthy.
“Putting fiscal rules above human dignity is not progressive nor economically astute. It is deeply damaging and risks repeating the austerity doom loop of her predecessors.”
Joao Sousa, deputy director of the Fraser of Allander Institute at the University of Strathclyde, said the Scottish Government would see a small increase of around £28 million in the forthcoming financial year.
However Scottish ministers face “significant reductions” in future years, he added.
In his initial reaction to the spring statement, Mr Sousa said: “The current forecast points to the Pip (personal independence payment) reforms reducing the block grant adjustment for social security devolution by increasing amounts, from £177 million in 2027-28 to £455 million in 2029-30.
“Put together, and in the absence of any other changes, the Scottish budget would be around £900 million worse off on the current side in 2029-30 than previously projected.
“On the other hand, some additional capital spending on areas which are devolved in Scotland – so aside from the defence spending increases – are expected to raise the Scottish Government’s capital budget by nearly £250 million by 2029-30 relative to current plans.”
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