THE Scottish Government is set to receive more than £100 million in financial consequentials when Philip Hammond uses his Budget tomorrow to boost spending on education and social care.
But Nicola Sturgeon has stressed how a continued austerity drive by Theresa May's Government to balance the UK books will see Scotland's overall budget continue to be cut sharply.
In his first and last spring Budget – the main economic statement will move to the autumn later this year - the Chancellor will unveil a £320 million programme to help fund up to 140 schools as the UK Government extends its free schools programme. In addition, some £216m will be announced to help rebuild and refurnish existing schools in England.
This will produce, under the Barnett Formula, a knock-on £50m windfall for Edinburgh. Politically, it will once again place a focus on education and the ongoing row about standards in Scotland.
At the weekend, Ruth Davidson, the Scottish Conservative leader, attacked what she called was the SNP Government’s “disgraceful” record on education. But the First Minister has insisted her Government’s reforms are "narrowing" the attainment gap between pupils from different backgrounds.
Mr Hammond is also widely expected to create an emergency fund of at least £1 billion to help tackle the social care crisis south of the border, which would produce a further £100m consequential for the SNP Government.
However, with the UK Government committed to balancing the books, spending cuts to the Scottish Government's overall budget are set to continue. Last year, the Fraser of Allander Institute warned Edinburgh's annual budget could fall by more than 6 per cent over the next five years because of UK spending cuts and the devolution of tax powers. A fall of six per cent would mean £1.6bn less for the Scottish Government to spend by 2020-21.
Yesterday, Ms Sturgeon emphasised how during the last six years Tory austerity had meant the Scottish Government's budget had been reduced by £2.3bn and that Conservative plans would mean at least another £3.5bn cut in the next few years.
With UK borrowing coming in lower than expected and the Office for Budget Responsibility due to upgrade its growth forecasts for this year and next, Mr Hammond will come under pressure to use the leeway to help ordinary households facing an income squeeze from rising inflation and businesses complaining of increased rates.
However, the Chancellor has signalled he will prioritise building up a multi-billion pound Brexit safety net fund ahead of launching any spending spree in Wednesday's set-piece economic statement to ensure the country has enough resources in reserve to cope with any Brexit turbulence over the next two years.
Amid reports that he is planning to raise some taxes in the Budget – including upping National Insurance rates for the self-employed - rather than loosen the public purse strings, Mr Hammond has stressed the need for caution as the UK prepares to trigger two years of testing Brexit negotiations with the EU.
"Remember, we have over £1.7 trillion worth of debt; this isn't money in a pot. What is being speculated on is whether we might not have borrowed quite as much as we were forecast to borrow.
"If your bank increases your credit card limit, I don't think you feel obliged to go out and spend every last penny of it immediately," explained the Chancellor.
He is also expected tomorrow to announce a £500m boost to British science and innovation.
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