Westminster has inflicted large real terms cuts on the Scottish Government, and Local Councils in turn.

Westminster funding of the Scottish Government has not kept up with inflation

The Government Expenditure and Revenue Scotland report (GERS) is produced annually. It shows how much money the UK Government returned to the Scottish Government for its spending. This is called the “Block Grant”.

Since 2019 the UK Government has failed to keep up with inflation and the Block Grant that sets the Scottish Government’s budget has fallen substantially in real terms.

To keep up with inflation an £8.8bn hole would need to be filled.

What’s the consequence?

The Scottish Government partly funds Local Councils, as well as spending on its own programme of public services. By cutting the Block Grant in real terms, the Scottish Government is forced to cut its own spending.

Unlike the UK Government, which is a Sovereign State, the Scottish Government cannot create debt to help fund shortfalls (UK Governments have used this method of funding since 1945).

So the Scottish Government has no choice but to suffer the full effect of Block Grant reduction in the services it delivers.

Read more about how spending for Scotland is currently funded.

Sources

https://www.gov.scot/collections/economy-statistics/#governmentexpenditureandrevenuescotland(gers)