Scotland’s Finance Secretary has said the country is being “punished” for having a larger public sector due to the UK Government’s increase to national insurance contributions.
Chancellor Rachel Reeves angered the Scottish Government when the decision to increase the payments from employers was announced in her October Budget.
Shona Robison has estimated the cost to Scotland’s finances could be £700 million as a result of its bigger public sector workforce.
The Chancellor announced her Budget in October (Peter Byrne/PA)
The Chancellor announced funding to protect the public sector in England from the increase, with a population share of the cash likely to be between £290 million to £350 million.
Speaking ahead of an appearance at the Local Government, Housing and Planning Committee at Holyrood this week, Ms Robison warned of the impact the increase could have on councils if not mitigated.
“Scotland’s public services face a bill of more than £700 million as a result of the UK Government’s increase in employer national insurance contributions,” she said.
“There have been indications of likely funding reported in the media, but these fail to take account of the fact that we have a larger public sector per person than other parts of the UK, leaving us some £300 million short.
“It feels like Scotland is now being punished for having decided to employ more people in the public sector and to invest in key public services.
“We know local authorities are already under significant financial pressure. This will only continue to build unless the UK Government reimburses us in full for their tax increase.
“Councils are in the process of setting their budgets now, so the sooner we have clarity over this issue the better – this is needed urgently.
“The Scottish Government will continue to work closely with Cosla to press the UK Government to provide the funding needed to support public services in Scotland.”
A spokesman for the UK Government said: “The Budget delivered more money than ever before for Scottish public services and the Scottish Government receives over 20% more funding per person than equivalent UK Government spending.
“It is for the Scottish Government to allocate this across its own public sector and meet the priorities of people in Scotland.
“It will also receive additional Barnett funding on top of this record £47.7 billion settlement as part of support provided in relation to changes to employer national insurance.”