Scottish Finance Secretary Shona Robison has strongly criticized a planned £300m funding increase from the UK government, stating it falls significantly short of the funds needed to cover a rise in employer National Insurance (NI) contributions. The shortfall could leave Scotland’s public services under severe financial strain, she warned.
Funding Gap Raises Concerns
The UK government announced the additional funds to support devolved administrations in offsetting higher public sector staff costs triggered by the recent NI increase. However, Robison has estimated the true cost to Scotland at over £500m for direct public sector employees—rising to £750m when including indirect employees, such as those in childcare, colleges, and social care.
Calling the proposed £300m allocation “simply not good enough,” Robison vowed to pursue the UK Treasury for additional compensation to ensure public services are not adversely impacted.
Barnett Formula Dispute
The UK government calculated the funding using the Barnett Formula, which allocates devolved administrations a proportional share of spending in England. Robison, however, argues that the formula does not account for Scotland’s disproportionately larger public sector workforce.
“It’s unacceptable that Scotland is being shortchanged simply because we employ more teachers, nurses, and police officers,” said Robison. “This should be seen as a positive, not something we are punished for.”
The finance secretary stressed the need for clarity from the UK government before presenting Scotland’s budget next week.
Westminster vs. Holyrood
The funding gap has added fuel to long-standing tensions between the SNP-led Scottish government and Westminster.
A UK government spokesperson countered Robison’s claims, stating the additional £300m would provide “hundreds of millions of pounds” to support Scotland’s public services, including reducing NHS waiting times and improving education outcomes.
The spokesperson also criticized the SNP’s fiscal management, accusing the party of financial mismanagement and wasting public funds.
Additional Budget Context
Chancellor Rachel Reeves announced the NI hike as part of her autumn Budget, aiming to increase funding for public services across the UK. The change was presented alongside a broader funding boost, including £3.4bn for Scotland in 2025-26 and an additional £1.5bn for the 2024-25 financial year.
The Scottish government acknowledged the £1.5bn but emphasized it was in line with budget expectations and insufficient to address the immediate NI cost pressures.
Implications for Public Services
The funding dispute places added pressure on Scotland’s public sector, which faces rising costs amid ongoing challenges such as NHS backlogs and the need to support struggling schools. Robison’s call for additional funds highlights the complexities of devolved budgeting and the challenges posed by differing workforce structures between Scotland and the rest of the UK.
With the Scottish Budget announcement looming, the clash underscores the critical importance of resolving funding disparities to avoid disruptions to vital services.
