Scotland’s acting finance minister, John Swinney, has announced plans for £500m of spending cuts as public sector pay disputes, provision for displaced Ukrainians and Tuesday’s pledges on cost of living support place “enormous strain” on government finances.
Underlining that Scotland’s budget was “at the absolute limits of affordability” and already worth £1.7bn less than when it was published in December, as a result of inflation, he told MSPs: “Every penny more on one policy is a penny less on another policy.”
He told the Holyrood chamber on Wednesday afternoon that limited tax and borrowing powers under devolution left him with “no other choice”.
But opposition parties criticised Swinney for failing to use the £20m set aside for a second independence referendum.
The deputy first minister also committed to setting out an emergency budget review within two weeks of the UK government’s budget update, warning that any cuts to tax and public spending made by Liz Truss would further impact on Scotland’s spending capacity.
The cuts and reallocations include £53m from employability schemes, using £56m from the ScotWind licensing process previously meant for green energy projects, and £33m planned for agricultural funds.
Swinney’s announcement came as housing campaigners warned that large numbers of struggling tenants may miss out on the rent freeze announced by Nicola Sturgeon on Tuesday to tackle the cost-of-living crisis.
On Wednesday the first minister insisted that her government had a moral duty to act as she responded to frustration from landlords after the pledge to freeze rents for private and social housing tenants until March and ban winter evictions in the face of soaring household bills.
But groups supporting tenants and Scottish Labour – who put forward a similar rent-freeze proposal earlier this year, only to have it voted down by SNP and Scottish Green MSPs – were likewise sceptical as they questioned the reach of the plans.
Jackie Baillie, the Scottish Labour deputy leader, said the announcement was “disappointing when you start to unravel the detail”. She said: “It looks as if it will only really apply to private-sector tenants, because social housing landlords tend to set rents in April, so it could be missing out whole swaths of the population who are really struggling.”
Meg Bishop, secretary of the Scottish tenants’ union Living Rent, said the measures were “great steps in the right direction”, but cautioned that “the devil will be in the details”.
“Our members and tenants across Scotland worry that the rent freeze will not impact social housing tenants whose rent increases in April,” she said. “We’re also concerned that the bill does not take into account landlords increasing rents between tenancies or specific situations such as joint tenancies changeover, students in purpose-built accommodation, or people who pay rent and energy bills combined.”
The chief executive of the Scottish Association of Landlords, John Blackwood, said he was astonished that the tenants’ rights minister and Scottish Green co-leader, Patrick Harvie, had been unable to provide him with any information on how the measures would affect rent increases or evictions already under way.
Blackwood said the Scottish government “fails to grasp the reality of Scotland’s housing crisis and has chosen the easy option of attacking landlords for political reasons”.
Many lettings agents have argued that, with landlords also facing rising costs, the measures will force many out of the rental market and reduce housing supply further.
While welcoming the move, the director of Shelter Scotland, Alison Watson, emphasised that Scotland already had a housing emergency before the cost of living crisis.
“The temporary measures announced today will stop people losing their home, but they do nothing for the record numbers trapped in the homelessness system right now,” she said. “They won’t help the thousands of children currently stuck in temporary accommodation, without somewhere permanent and safe to call home.”