Finance Secretary stresses need for more fiscal flexibility for Scotland

Finance Secretary Kate Forbes has highlighted the need for more fiscal flexibility for Scotland in talks with the Chief Secretary to the Treasury

During a session of the Joint Executive Committee (JEC) with Simon Clarke Ms Forbes outlined some of the challenges the Scottish Government says need to be addressed as part of the forthcoming joint review of the Scottish fiscal framework.

Ms Forbes, who chaired the meeting in London, highlighted the need for further collaboration on fiscal flexibility, including consideration of more financial powers as part of the forthcoming fiscal framework review.

The meeting on Thursday followed the UK Government’s council tax energy rebate announcement and the consequential funding for the Scottish Government.

The UK Government estimates that devolved governments in Scotland, Wales and Northern Ireland are expected to receive approximately £565 million of Barnett funding as a result of the council tax rebate.

Ms Forbes said: “I have had a constructive conversation with the Chief Secretary to the Treasury this afternoon, where there was a frank exchange of views on what is quickly required from the fiscal framework review and the need for further fiscal flexibility for Scotland.

“Our experiences of dealing with both the health and economic impacts of the pandemic and supporting those struggling with the cost-of-living crisis clearly demonstrate how difficult it is to take actions we deem vital without sufficient fiscal powers and often with late notice or lack of engagement when further funding is coming.

“This has been proven once again today. Whilst I will always welcome funding, the net change to our budget isn’t clear yet – we are awaiting urgent clarity on this from the Treasury and how it will impact our final settlement for the current year.

“As the First Minister has said, we will pass on the full consequential funding to support people struggling with the current costs of living.

“Council tax is already lower in Scotland and our current support such as the single council tax reduction scheme protects 470,000 lower income households.”

The UK Government said that at the meeting Mr Clarke and Ms Forbes agreed that they were close to finalising arrangements for an independent report on the Scottish Government’s block grant adjustment arrangements which will inform the review, and shared the ambition to get this first stage launched as soon as possible.

Mr Clarke said: “Today was an enjoyable and productive meeting. We are working closely with the Scottish Government and engaging in regular discussions on the fiscal framework review, making good progress on our approach to the Scottish Government’s future finances.”