Scottish Government Resource Spending Review 2022
By Carolyn Lochhead, SFHA Director of Public Affairs and Communications.
The Scottish Government has published its Resource Spending Review and Medium Term Financial Strategy. These follow on from the spending plans set out in last year’s Programme for Government and the Bute House Agreement with the Scottish Greens.
Housing did not feature strongly in the Finance and Economy Secretary’s statement to the Scottish Parliament, in which she confirmed the Scottish Government’s priorities as:
- Tackling child poverty
- Transitioning to net zero
- Growing a stronger economy
- Improving public services
- Helping people struggling with the cost of living.
There were few positive messages in yesterday’s statement: the Secretary stated that inflation would inevitably erode the funding growth assumed in the Medium Term Financial Strategy, reducing the government’s spending power. Analysis from the Fraser of Allander Institute confirms that there will be little growth in public finances, with almost no real terms increase expected in Scotland’s block grant between 2022/23 and 2025/26.
Public sector reform was a key theme of yesterday’s statement, with a focus on areas including digitalisation, reform of the public body landscape and improving public procurement. SFHA will seek to understand and positively shape the impact of these reforms on our members.
The overall Social Justice and Housing budget is set to increase from £4.6 billion to £7 billion over the period of the review. However, the bulk of this budget relates to social security assistance, which will stand at £6.3 billion by 2026-27. The review of the Capital Spending Review makes no amendment to the £3.6 billion over five years for the Affordable Housing Programme. Similarly, there is no change to the £1.8 billion announced last October to support the Heat in Buildings Strategy in reducing emissions from homes and buildings. We welcome the continued commitment to these areas, but as we pointed out at the time of the Scottish Budget, year-on-year increases will be needed if we are to meet our ambitions of building new social homes.
We welcome actions to reduce poverty, such as doubling the Scottish Child Payment and expanding the provision of free school meals.
Health and social security will see an increase in their budgets, which is important for the tenants our sector serves. And the Institute for Fiscal Studies notes a 67% increase in funding for employability and training services, with a 24% rise in concessionary fares and bus services. But our partners in local government can expect to see a 7% real terms decrease in their budget between 2022/23 and 2026/27, while enterprise agencies see a decrease of 16%.
We’ll continue to keep our members informed as we head towards the Programme for Government in September, which will set out the Scottish Government’s legislative priorities for the year.