Swinney: Increasing public sector pay will mean spending cuts

Increased public sector pay will result in spending cuts, Scotland’s Deputy First Minister has said.

Scotland is on the brink of major industrial strife, with NHS staff, – including nurses and ambulance workers – teachers and university lecturers threatening to strike.

John Swinney – who controls the country’s purse strings – has repeatedly had to revise the Scottish Government’s budget, sheering £1.2 billion of public spending in response to increasing inflation.

Speaking to journalists in the wake of Chancellor Jeremy Hunt’s autumn statement, Mr Swinney was clear about what an increase in public sector pay would mean.

“We’ve been very clear that in this financial year – because in the budget statement there is no new money for this financial year – I have no unallocated resources,” he said.

“If I want to put any more money into a public sector pay deal, beyond what’s already on the table, I have to cut public expenditure and public services.”

Mr Swinney said he understands public sector staff are dealing with rising inflationary pressures, but added: “I can’t meet all these pay claims.”

John Swinney
John Swinney said he could not yet say whether the autumn statement will mean a net gain or loss for the Scottish budget (PA)

Addressing the autumn statement, which the Treasury has said will send some £1.5 billion to Scotland in Barnett consequentials, Mr Swinney said he still views it as an “austerity budget”.

When asked if the statement represents a net positive or negative for Scotland’s public finances, Mr Swinney said he was not yet clear on the finer details.

“I suspect it will be a real terms cut, but I couldn’t say definitively if that will be the case, we will have to run all the numbers,” he said.

When asked about the impact a cut would have on public services, he said: “Whatever the position is on that, the pressure on public finances and public services is absolutely colossal.

“I have never seen the intense financial pressure that we’re wrestling with today.”

He went on to describe a report from Auditor General Stephen Boyle warning the Scottish Government runs the risk of overspending its budget as “dispassionate and accurate”.

But Mr Swinney also praised engagement with the UK Government ahead of the Chancellor’s statement on Thursday, adding he had also been in contact with Chief Secretary to the Treasury John Glen following the announcement.

He added: “The engagement is better, now it frankly couldn’t have been any worse than the chief secretaries that I’ve dealt with – I’m now on my third chief secretary in my temporary incumbency in the finance portfolio, and the other two, the dialogue was awful – so this is much better.”