“A core resource block grant in 2022/23 that is 8% higher than pre-pandemic might sound generous. But to deal with the pandemic’s legacy and underlying public services pressures it is anything but. Kate Forbes’ third budget may well be her most challenging.”
The first budget of a new parliament is often a particularly exciting affair, as a new set of policy commitments and aspirations begin to shape the tax and spending decisions of government.
A core resource block grant in 2022/23 that is 8% higher than pre-pandemic might sound generous, but to deal with the pandemic’s legacy and underlying public services pressures it is anything but. In this context, Kate Forbes’ third budget may well be her most challenging.
But the challenges are unlikely to dissipate in subsequent years, as commitments and aspirations on health, social care and social security in particular rub up against a real terms budget that is currently forecast to remain flat in real terms between 2022/23 and 2024/25.
So a challenging budget for 2022/23 is the precursor to a challenging spending review next year.
Navigating the health and economic recovery from the pandemic, alongside longer term commitments on climate change and inequality will require a delicate set of budget decisions and trade-offs. This week’s budget will reveal how those choices and trade-offs have been made for 2022/23, but the more difficult trade-offs may yet be to come.