“"The Scottish Government’s budget will be cut by around £650 million next year - reducing the money we have to spend on public services and supporting people with the cost of living. The Prime Minister has previously claimed that he would respect devolution and the Scottish Government – but his actions do not match his words. Cutting Scotland’s budget shows that, yet again, we are being treated as an afterthought. The Scottish Government will ensure that households in Scotland will benefit from the one-off £100 payment for energy bill support, however, it is clear that the measures announced today fall far short of the action which is required. Furthermore, this support does not come close to meeting the promises on which the UK Government came to office, including reducing energy bills by £300 which remain significantly higher than they were in July 2024. The UK Government has failed to meet the moment and has failed to keep its promise. It is also unacceptable that there was no announcement about ending wider austerity policies which are pushing families into poverty like the bedroom tax, the benefit cap and “young parent penalty” in Universal Credit which would make a significant difference to tackling poverty. The Chancellor had the opportunity to lift thousands more families out of poverty, and he has chosen not to."
Scotland Faces £650m Budget Cut Following UK Budget Announcement
Deputy First Minister warns of real terms reduction in resource and capital budgets, criticising UK Government's energy bill support measures.
By Morag Henderson
••2 min read
AI
Generic image of the Scottish Parliament building facade with ornate stonework and large windows, under a dramatic, cloudy sky.
Scotland's budget is set to face a real terms cut of approximately £650 million in 2027-28, according to the Deputy First Minister, who has criticised the UK Government's recent budget announcement.
The UK Budget will result in a real terms reduction to Scotland's resource block grant by 1.3% in 2027-28, equating to a decrease of around £550 million. Additionally, Scotland's capital budget is projected to see a 1.5% real terms reduction in the same year, amounting to approximately £100 million.
The Deputy First Minister confirmed that the Scottish Government will ensure households in Scotland receive the £100 energy bill support payment. However, Jenny Gilruth stated that while measures to lower energy costs are welcomed, the steps announced by the Chancellor are insufficient and do not fulfil the promises made by the UK Government upon taking office.
The Deputy First Minister added that the government will now assess the full implications of the statement for Scotland, with further details to be announced as part of the Scottish Budget on 3 December.
Based on information from the official source: Scottish Government (gov.scot) (28/10/2026)
