Rachel Reeves urged to prioritise public spending in UK spring statement

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The NAO has warned against making private finance decisions as a means to avoid accounting classifications or achieve ‘off balance sheet’ investment and the eventual costs of maintaining or upgrading assets if they are handed back by the private sector. If costs are not accounted for properly, taxpayers will be exposed to the risks of higher public expenditure over the long term.
The NAO has warned against making private finance decisions as a means to avoid accounting classifications or achieve ‘off balance sheet’ investment and the eventual costs of maintaining or upgrading assets if they are handed back by the private sector. If costs are not accounted for properly, taxpayers will be exposed to the risks of higher public expenditure over the long term.

Chancellor Rachel Reeves is being urged to prioritise “vital” funding for public services and reject the “failed approach of austerity” as she prepares to give a key statement on the economy.

Reeves will deliver her spring statement on Wednesday, updating the Commons on the Government’s plans for the economy.

But amid concerns that public spending could be slashed, Scottish finance secretary Shona Robison warned this would impact on budgets north of the border.

Reeves’ statement also comes in the wake of Labour ministers announcing welfare reforms that aim to reduce the benefits bill by £5 billion over the coming years – with Robison also insisting a “proper consultation” should be carried out on these proposals.

The Holyrood finance secretary raised concerns despite chief secretary to the Treasury Darren Jones insisting this week that the UK is not “blindly cutting spending”.

Robison insisted however that the “failed approach of austerity must be rejected”, arguing that instead “vital funding for public services and infrastructure” must be prioritised.

The finance secretary added: “If the Chancellor makes cuts to public spending then this will affect the funding we have in Scotland.”

This comes at a time when she said that “disability organisations have been frank in their fears that welfare changes will harm the most vulnerable in society”.

Robison challenged the UK government on this, saying: “A proper consultation must be carried out urgently to ensure people’s incomes and wellbeing are protected.”

She also said it is “vital” the UK government works with ministers at Holyrood to “provide clarity given the potential impact of their changes on the delivery of our devolved benefits and our budget”.

Robison said that the “cuts to the support for disabled people comes on top of the deep concern that remains across the public sector, third sector and businesses in Scotland about the impact of changes to employer national insurance contributions”.

The Scottish government has previously estimated the increase in this charge will cost the public sector and associated bodies in Scotland more than £700m when it comes in in April.

Robison said the amount of additional funding the Scottish government will receive to compensate for this is “yet to be confirmed” and that the likely amount “falls far short” of what is needed.

She added that this “puts at risk services such as GPs, dentists, social care and universities” as she restated calls for Reeves to “fully fund these additional costs”.

The UK government has been contacted for comment.

By Katrine Bussey, PA Scotland Political Editor