John Swinney warns Scottish Government 'has nowhere else to go' in public sector pay deal

John Swinney has warned the Scottish Government “has gone as far as it can go” in revised pay offers for health workers after setting out £615m worth of budget cuts.

The deputy first minister warned “severe” funding challenges meant a £400m “reprioritisation” of resources within the health and social care portfolio were required as part of an emergency fiscal review.

Swinney, who is acting as finance minister, said the UK Government’s financial plans had forced “extremely difficult choices,” including slashing funding for Covid and mental health projects to help pay for public sector wage increases.

But he warned there was “nowhere else to go” in agreeing pay rises for NHS staff – despite workers from three trade unions voting for strike action.

Around 4,000 workers from the GMB union, including paramedics and technicians, voted to back industrial action yesterday, joining colleagues from both Unison and Unite.

A Royal College of Nursing (RCN) ballot ended on Wednesday.

The cuts come in addition to a further £560m of cuts announced in September, however opponents criticised the decision to remove funds for key areas while maintaining a budget for “pet projects” such as constitution-related matters.

Swinney told STV News: “I’ve been very open with the health trade unions, I took part in the face-to-face negotiations a couple of weeks ago and I made it very clear that the money the Scottish Government was able to put on the table is all that I can offer.

“I quite literally have nowhere else to go. We’re at a very advanced stage in the financial year, there are huge inflationary pressures and these are the savings I feel it is safe enough to take to invest in a pay offer.

“But I can’t go any further and I have gone as far as I possibly can do in the offers that we have made.”

He added: “I can’t invent money.

“I have to live within the resources that I am given and I will get criticism for the choices I have made, but I have made a choice to move money from some aspects of the health and social care portfolio to afford a staff pay deal.”

Soaring rates of inflation meant this year’s budget was now worth £1.7bn less than when in was introduced last December, the deputy FM said in his statement to the Scottish Parliament.

He added further savings were required to offset the impact of Brexit and fund public sector pay deals alongside ongoing support for Ukrainian refugees – but added the NHS budget would not be compromised to plug the gap.

In the budget review document, £116m of Covid-related costs was allocated for “reprioritisation” within the health and social care portfolio.

A further £70m was identified from “social care and National Care Service reprofiling”, with £38m earmarked from mental health funding.

Despite the UK Government’s fiscal statement being due on November 17, Swinney said he would “wait no longer” to outline his own proposals.

Changes to the Scottish Government’s tax rates will only be contemplated after this date, he added.

The Scottish Conservatives argued financial uncertainty from Westminster “did not absolve” Holyrood of its responsibility for the national budget, adding plans for a national care service had “seriously underestimated” the setup costs.

Liz Smith, Tory finance spokesperson, said: “He won’t touch the constitution budget. He made much of the fixed and finite nature of the Scottish Government’s budget, but the obvious conclusion to be drawn is that he and his colleagues, not the UK Government, bear the responsibility.

“The SNP also plans to set up a huge new bureaucratic National Care Service – an idea slated by almost every stakeholder. Audit Scotland says that its costs have been seriously underestimated – and even now, they are more than the sum total of the cuts Mr Swinney has imposed in his two statements.

“This is the worst possible time to set up a hugely expensive and untested new care service, or to pursue plans to break up the UK. Both should be dropped, and the SNP Government must focus on real support for struggling Scottish households.”