The RSE has responded to the Scottish Parliament Finance and Public Administration Committee inquiry on the Scottish Budget 2022/23 and the Fiscal Framework.
The response highlights that the Covid-19 pandemic will have long term impacts on the Scottish Budget as it has increased public debt to its highest peacetime level. With the pandemic still ongoing, several risks may impact the 2022/23 Scottish Budget; these include a fourth wave of the pandemic, high inflation, natural disasters due to adverse weather conditions, and falling tax receipts due to businesses failing or rising levels of unemployment.
The response notes that future Scottish Budgets will need to address the significant backlogs within the health and education sectors. Attention will need to be given to the social care sector. The level of spending in these sectors will restrict the Scottish Budget. It is unclear how much money will be available to spend on other priorities such as job creation, reducing inequality, and achieving net-zero.
The RSE has noted that the fiscal framework offers significant flexibilities and provisions to support the Scottish Budget in previous responses. In the lead up to the renegotiation of the fiscal framework, intergovernmental relations between the UK and Scottish Governments have deteriorated, with the Internal Market Act and funding initiatives such as the Shared Prosperity Fund, damaging relations further. The response welcomes the proposals to improve the intergovernmental framework and presents the RSE’s recommendations on how to improve intergovernmental relations.
Mr Ray Perman