Ministers pledged to undertake a budget review in response to the cost-of-living crisis, in a bid to identify funding from other spending areas that can ease the pressure on households.
Either Liz Truss or Rishi Sunak could hold an emergency budget or other fiscal event after taking office in an attempt to tackle the crisis and the Deputy First Minister pledged to act quickly after Downing Street plans are announced.
First Minister Nicola Sturgeon will publish her plans for the next year in the Programme for Government on Tuesday, with Mr Swinney due to give an update on the budget review and its impact on public sector pay the following day.
“This year’s Programme for Government is set against a backdrop of economic upheaval that has not been seen for a generation, already impacting people, businesses, public services and the third sector across Scotland,” the Deputy First Minister said.
“For that reason, this is a different Programme for Government – one that is subject to the outcome of our Emergency Budget Review and its implications for our budget for 2023-24.
“The UK Government’s existing spending plans, coupled with Bank of England inflation forecasts, mean that the Scottish Government’s funding will fall by 4.5% in real terms next year.
“If inflation rises significantly higher, the resources available to us will erode even further at the very time when costs are increasing.
“With the new prime minister due to be appointed this week, it is vital that the UK Government now acts decisively to tackle this ongoing crisis.
“The Scottish Government is continuing to do everything within our powers and resources to help those most affected; however, the powers and resources needed to tackle this emergency on the scale required lie squarely with the UK Government.
“Further spending cuts to Scotland’s budget from the UK Government would be disastrous and would cost lives.”