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John Swinney to confirm further cuts to spending plans Swinney reveals further £615m of spending cuts
(about 1 hour later)
John Swinney is expected to announce savings on a similar scale to the £500m he outlined in SeptemberJohn Swinney is expected to announce savings on a similar scale to the £500m he outlined in September
Scotland's finance secretary is expected to announce details of hundreds of millions of pounds worth of budget cuts in a statement to MSPs. Scotland's finance secretary has unveiled details of a further £615m worth of spending cuts.
John Swinney has already trimmed £500m from his spending plans for this year. The "reductions and reprioritisations" are in addition to another £560m of cuts that were announced in September.
Mr Swinney is expected to reveal details of further cuts on a similar scale on Wednesday afternoon. John Swinney said the financial situation facing the Scottish government was by far the most challenging since devolution.
He has said he needs to make savings to offset the impact of soaring inflation, higher than expected public sector pay deals and help for Ukrainian refugees. And soaring inflation meant this year's budget was now worth £1.7bn less than when in was introduced last December.
Mr Swinney, the deputy first minister who is filling in as finance secretary while Kate Forbes is on maternity leave, has also been looking for ways to get more help to those struggling with the cost of living crisis. Mr Swinney also said savings needed to be made to offset the impact of Brexit, public sector pay deals and help for Ukrainian refugees.
In September, he told MSPs that inflation had reduced the Scottish budget by £1.7bn since it was announced the previous year. The measures he announced included reprioritising £400m from the NHS budget in order to provide a "fair pay deal" for health staff - although he stressed that the overall NHS budget was unchanged.
He said public sector pay deals had cost up to £700m, while another £200m had been spent helping to take in refugees from the war in Ukraine.
Watch the emergency budget review statementWatch the emergency budget review statement
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The changes he announced at the time included cuts to employability schemes and agricultural funds, with Mr Swinney arguing that a lack of borrowing powers and inability to vary income tax rates outside the normal budgetary timetable had left him with "no other choice". Some £116m of this had been due to be spent on Covid vaccines, testing and PPE, with a further £38m coming from the mental health budget and £63m from "re-phasing and pausing" programmes including the Scottish Trauma Network.
It is not yet known where we will look to find further savings when he makes his emergency budget review statement in the Scottish Parliament at about 14:50. It also includes £65m from primary care services and £70m from "social care and National Care Service re-profiling".
And money will also be taken from budgets across most Scottish government departments, with Mr Swinney also announcing £33m of resource budget savings and £180m of capital savings and financial transaction reductions in his emergency spending review.
The capital savings include delays to new college projects and housebuilding as well as to low-carbon travel.
'Balance the books'
Mr Swinney said the Scottish government did not have the necessary borrowing powers to meet the increased costs that were facing it, or to change income tax rates before the start of the next financial year.
This meant that every additional pound that was spent in one area meant a pound less could be spent somewhere else, he said.
He added: "I must balance the books, but I am committed to doing so in a way that prioritises funding to help families, to back business, to provide fair pay awards and to protect the delivery of public services."
The review was established in the summer to "assess any and all opportunities to redirect additional resources to those most in need, reduce the burdens on business and stimulate the Scottish economy".The review was established in the summer to "assess any and all opportunities to redirect additional resources to those most in need, reduce the burdens on business and stimulate the Scottish economy".
Mr Swinney's review statement was initially expected within a fortnight of the UK government's infamous mini-budget, which was announced on 23 September by then-Chancellor Kwasi Kwarteng.Mr Swinney's review statement was initially expected within a fortnight of the UK government's infamous mini-budget, which was announced on 23 September by then-Chancellor Kwasi Kwarteng.
Amid the resulting fallout at Westminster, which saw most of the plans reversed and both Mr Kwarteng and Prime Minister Liz Truss lose their jobs, the Holyrood update was delayed in anticipation of a UK government autumn statement scheduled for 31 October.Amid the resulting fallout at Westminster, which saw most of the plans reversed and both Mr Kwarteng and Prime Minister Liz Truss lose their jobs, the Holyrood update was delayed in anticipation of a UK government autumn statement scheduled for 31 October.
That was then pushed back to 17 November but the Scottish government decided it could not wait until then to announce its changes.That was then pushed back to 17 November but the Scottish government decided it could not wait until then to announce its changes.
The Scottish government will announce its budget for next year on 15 December, which will include any changes it intends to make to income tax rates and bands.The Scottish government will announce its budget for next year on 15 December, which will include any changes it intends to make to income tax rates and bands.
This is the second round of savings announced this autumn by John Swinney - but it may well be more painful than the first.
A few big-ticket cuts aside, a lot of the changes announced in September were the result of shuffling money around.
For example the government was able to trim £37.6m from the budget for concessionary travel, because fewer people than expected had applied for free bus passes.
Unless there's an unexpected spike in applications, that's a cut that can be made without the public actually noticing a difference.
There were also several areas where spending could be shunted from the resource page of the budget (which deals with day to day spending) onto the capital side (which generally deals with big investments).
But there are only so many of these fiscal conjuring tricks you can play before you have to start making really difficult choices.
Much of the fat has been trimmed already - so the next round of cuts might well go to the bone.