Inflation and pay deals leave Scottish ministers facing £1.5bn budget black hole

Situation facing finance minister described as ‘one of most challenging fiscal backdrops’ since devolution

Scottish ministers are facing a £1.5bn black hole before next week’s draft budget, as a combination of surging inflation and expensive public sector pay deals put extreme pressure on government spending.

The independent Fraser of Allander Institute describes the situation facing the finance minister, Shona Robison, as “one of the most challenging fiscal backdrops in the history of Scottish devolution” in its annual budget report.