The Scottish government faces a £1bn shortfall for day-to-day spending next year, according to its finance watchdog.

The Scottish Fiscal Commission said the gap between income and spending plans could rise to £1.9bn in four years.

That would equate to 4% of the resource budget when the Scottish government is required to balance spending with income.

Finance Secretary Shona Robison said the outlook was extremely challenging.

She said tough choices would be set out in the budget later this year.

Plans for capital spending – investing in buildings, roads, rail, and ferries, for instance – are now seen as “unsustainable” and are to go through a more radical “reset”.

The capital budget is expected to fall by 14% in real terms within the next four years, leaving a gap between available funds and investment plans of £900m by 2025.

Ms. Robison, the deputy first minister, also said a review of tax options would take place over the next 12 months, aimed at raising more funds from those best able to pay.

Read More