Scotland’s Finance Secretary, Shona Robison, has accused the UK Government of “punishing” the country for having a larger public sector following the Chancellor’s announcement to increase national insurance (NI) contributions.
The move to increase NI payments from employers, unveiled by Chancellor Rachel Reeves in her October Budget, has raised concerns in Scotland about the financial implications for the public sector. Robison estimates that Scotland will face a cost of £700 million due to its bigger public sector workforce compared to other parts of the UK.
The Impact on Scotland’s Public Services
Robison emphasized that Scotland’s public services, including local authorities, could face significant financial strain due to the increase. While the UK Government has announced additional funding to protect the public sector in England from the rise, Scotland’s allocation—estimated to be between £290 million and £350 million—fails to account for the larger workforce per person in the Scottish public sector. As a result, the Scottish Government believes it could be £300 million short.
“This feels like Scotland is being punished for having decided to invest in a larger public sector, to employ more people in essential services,” Robison stated. “Local authorities are already under pressure, and this increase could make matters worse unless the UK Government reimburses us in full for their tax hike.”
Calls for Urgent Clarity and Funding Support
The timing of the issue is particularly critical, with councils across Scotland currently in the process of setting their budgets for the coming year. Robison stressed the urgency of securing clarity on the funding situation to avoid further strain on public services. The Scottish Government has also pledged to continue working with Cosla (the Convention of Scottish Local Authorities) to push for the necessary funds to support Scotland’s public sector.
UK Government Response
A spokesman for the UK Government responded to the concerns, stating that the Budget had delivered “more money than ever before” for Scottish public services. The spokesperson added that the Scottish Government receives over 20% more funding per person than equivalent UK Government spending, and that the additional Barnett funding will be provided as part of the support related to the increase in employer national insurance contributions.
