Scotland faces a welfare black hole of more than £2billion by 2030, thanks to the SNP government’s “reckless spending” and Labour’s “broken election promises”.
Already the SNP’s budget for benefits far outstrips the money that it receives from the UK government for welfare spending.
The independent Fraser of Allander Institute has now calculated that, thanks to the cuts announced in Labour’s Spring Statement, Scotland’s block grant will be reduced in the coming years, making the SNP’s plans even more unaffordable.
Scottish Conservative analysis shows that, due to these changes, the black hole in Scotland’s welfare budget by the end of the decade is set to jump from £1.7 billion to £2.1 billion.
Liz Smith, the Scottish Conservative shadow social security has described the black hole as “completely unsustainable” and accused the SNP of “doing nothing to rein in Scotland’s enormous benefits bill.”
Scottish Conservative shadow social security secretary Liz Smith said: “The SNP’s reckless spending on welfare was already set to saddle Scottish taxpayers with a colossal £9 billion bill.
“The broken election promises and budget cuts of the UK Labour government have just made that even more unaffordable. What was a mammoth £1.7 billion black hole in the welfare budget is set to soar to over £2.1 billion.
“This black hole is completely unsustainable and yet the Nationalists are apparently doing nothing to rein in Scotland’s enormous benefits bill. And it’s Scottish taxpayers who will pick up the tab. They are being hammered by two high-tax, high-spend left-wing governments.
“Only the Scottish Conservatives are arguing for policies that would balance the books and put money back in people’s pockets.”
Notes to editors
Fraser of Allander claim Labour’s budget will deduct nearly £500million from the Scottish Budget in 2029-30. Fraser of Allander claim that there will be a small £28m uplift in Scotland’s 2025-26 budget due to the changes announced in the Spring Statement. However, the announced welfare changes will see £177m deducted from the block grant adjustment in 2027-28, rising to £455m by 2029-30. Put together, these measures make the Scottish Budget around £900m worse off on resource spending. (Fraser of Allander, 26 March 2025, link).
This means there could be a £2billion black hole in Scotland’s welfare budget by 2030. Due to SNP Government spending decisions, Scotland’s welfare bill was already set to rise to £9bn – £1.7bn more than it received to spend on benefits in 2029-30 according to the Scottish Fiscal Commission.
However, with the welfare changes announced by Labour in their Spring Statement, this deficit will deteriorate further. The Fraser of Allander estimate that £455 million will be cut from the Scottish Government's budget due to Labour's welfare reforms in 2029-30. If we combine these figures, it shows that the Scottish Government could spend £2.116bn more on benefits compared with the funding they receive to spend on welfare if they make no further changes. (Scottish Fiscal Commission, 7 January 2025, link; Fraser of Allander, 26 March 2025, link)