Scotland warns of £700 million funding cut in UK Labour budget

Scotland's Social Justice Secretary Shirley-Anne Somerville has warned that Chancellor John Healey's Labour budget will impose cuts exceeding £700 million to the Scottish block grant, jeopardising frontline public services. She urged the UK government to scrap the cuts and provide new investment, stressing the need for a "change of direction" from the newly elected Labour administration. The Scottish Fiscal Commission highlighted that the cut is intended to reconcile a shortfall between projected and actual income-tax revenues, and it cautioned that little new funding is expected for the 2027-28 fiscal year.

SNP ministers previously enjoyed an extra £831 million this financial year due to a one-off education boost from the UK, but the commission warned of a tighter outlook with higher inflation and weak household income growth. Somerville also highlighted uncertainty over the capital budget and called for multi-year certainty from Westminster ahead of Finance Secretary Jenny Gilruth's draft budget in December.