SNP unlikely to roll out manifesto pledges as IFS issues stark 'fiscal reckoning' warning
Economists have warned it is unlikely the SNP will be able to roll out all of its manifesto promises
Holyrood faces a “fiscal reckoning” and John Swinney’s SNP government will be forced to roll out “tax rises or deeper cuts” because promises outmatch resources, leading independent economic researchers have warned.
The stark assessment by the Institute of Fiscal Studies (IFS) comes as the SNP government will need the support of opposition parties to pass its spending plans after falling short of an elusive majority at this month’s election.
The IFS has pointed to “an incredibly challenging fiscal outlook” with forecasts “implying having to make cuts to overall spending in the 2027–28 budget”.
The organisation has warned that due to the fractured make-up of the new Scottish Parliament, the SNP will be in a position where “not all of its manifesto pledges are likely to come to full fruition”.
The SNP pledged a flagship expansion of childcare in the party’s manifesto, with the IFS highlighting that all parties except Reform UK, also vowing to expand free childcare entitlements. But the research highlights that finding the extra £500m a year needed to roll out the SNP’s plans in full “would require very difficult trade-offs, given cuts are already planned to spending on a range of services”.
David Phillips, head of devolved and local government finance at IFS, said: "The returning SNP government will face financial, logistical and political challenges as it seeks to implement its various tax, spending and economic policy pledges.
“The financial challenges largely reflect the wider UK public finance outlook, but past Scottish Government decisions – including using one-off funding sources for recurrent costs, such as larger public sector pay rises – have added to the financial squeeze it is now facing.”
He added: "Finding the money for a range of new entitlements and service expansions, including expanded subsidised childcare and cheaper bus fares, will require either tax rises or deeper cuts to lower priority spending than already planned.
“And the £1.4 billion price tag that the SNP attaches to new pledges does not include the money that would be needed to make substantial further progress towards the Scottish government’s child poverty reduction targets, or the SNP’s pledge to increase social housing delivery.
“New ministers therefore face a choice: to pare back their manifesto pledges; or to make even tougher trade-offs elsewhere in an already stretched Scottish budget.”
Scottish Labour finance spokesperson, Michael Marra, said: “The experts are clear that brutal cuts or punishing tax hikes are looming, no matter how the SNP tries to spin it.
“John Swinney has appointed a dedicated minister for cuts but still can’t answer basic questions about where the axe is going to fall.
“SNP ministers created this mess with years of mismanagement and waste – they cannot run away from it.
“The SNP must come clean over its plan for cuts and the consequences for jobs and lifeline services.”
Reform UK Scotland leader Malcolm Offord said: “The IFS is saying what we all know - you can’t continue to waste taxpayers money on vanity nonsense and not live with the consequences.
“The SNP now have a choice to make do they continue down a welfare economy or focus on a wealth economy?
“It’s only by cutting waste, reducing tax and slashing red tape will we finally fix our looming financial black hole.”
A Scottish Government spokesperson said: “The Scottish Government has delivered a balanced budget every year despite the challenging financial environment and will continue to take a responsible approach to managing the public finances, prioritising investment in frontline services.
“As the First Minister set out, the Scottish Government will act according to the commitments on which he was elected, focused on delivering on the things that matter most to the people of Scotland, including more efficient public services, easier access to the NHS and supporting people with the cost of living crisis.”
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