In its upcoming Resource Spending Review, the Scottish Government will have to choose between spending cuts, tax rises, or hoping for extra UK government funding.
Last month the government finally announced how its replacement for EU regional development funding – the Shared Prosperity Fund – will be allocated across the country.
It is disappointing that the UK government has ‘taken back control’ only to stick to an arbitrary, poorly designed, out-of-date funding allocation mechanism.
In this presentation at the Local Government Association's Annual Local Government Finance Conference (2022), IFS researchers explained the economic and fiscal outlook, looked at how councils' finances have fared during the pandemic, and the funding outlook and issues facing the sector in the next few years.
The IFS Green Budget looks at the ongoing impacts of the COVID-19 pandemic, as the Chancellor aims to secure a lasting recovery and deliver on the Government’s other objectives and priorities.
"Both government funding decisions over the past decade and the structure of council tax have worked against “levelling up”." Paul Johnson in The Times on local government funding.
While there is still much uncertainty, we now project Scotland’s budget deficit in 2020–21 to have spiked at between 22% and 25% of national income, up from 8.6% of national income in 2019–20, although less than our previous projection. It is also still higher than a forecast deficit of 16% of national income for the UK as a whole for the same year.