Finance secretary Kate Forbes has said Scotland’s public sector will need to reform in the face of an “unprecedented cost of living crisis”.

Speaking at Holyrood, she set out the Scottish Government’s resource spending review – the first time a multi-year programme has been laid out since 2011.

She told MSPs reforms would focus on areas including digitalisation, the public sector estate and improving public procurement.

Against the backdrop of the cost of living crisis, skyrocketing inflation, the recovery from the Covid-19 pandemic and the largest decline in living standards since the 1950s, Scotland faces a summer of discontent as public sector workers across a slew of industries consider sweeping strike action over a series of pay disputes.

UK inflation increased to nine per cent in the 12 months to April, up from seven per cent in March. It was the fastest measured rate since records began in 1989, and the Office of National Statistics (ONS) estimates it was the highest since 1982.

Research, carried out by Glasgow University and the Glasgow Centre for Population Health, has suggested people across the UK are dying younger as a result of austerity.

Forbes said inflation has limited the Scottish Government’s funding increases.

The Scottish Fiscal Commission says income tax revenue will fall short by £265m next year and then there will be a block grant gain from Westminster’s planned income tax cut in 2024-26.

It sees inflation rising to 8.7% at the end of this year, before falling sharply.

Real earnings are on course to fall 2.7% this year, back to 1% growth in 2024, and remain very weak to 2027-28.

Social security spending up from £4.2bn this year to £6.8bn; welfare spending beyond Westminster’s allocation goes from £500m this year to £1.3bn by 2026

The resource and capital budget falls next year, and only gets back to this year’s budget, at current prices, in 2026-27.

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