HIKES in employers’ National Insurance are “punishing” Scotland for having a larger public sector, SNP Finance Secretary Shona Robison said today. 

The remarks came ahead Ms Robison’s appearance before this week at Holyrood’s local government, housing and planning committee, and just weeks before she will put a draft Scottish Budget to the parliamentary vote.

The Labour Westminster government’s October Budget delivered £1.5 billion extra in-year cash to the Scottish Budget, and an additional £3.4bn from April.

But its increases in employers’ National Insurance have proved most controversial with the Scottish government.

While the NHS is exempt from such contributions, other government departments and agencies, as well as councils, social care, and organisations contracted to them are not.

Labour Chancellor Rachel Reeves committed to protecting the public sector in England from the costs, but the population share of the cash coming to Scotland is estimated to be between £290 million and £350m.

This is less than half of the real cost, according to Ms Robison. 

“Scotland’s public services face a bill of more than £700 million as a result of the UK government’s increase in employer National Insurance contributions,” she said.

“There have been indications of likely funding reported in the media, but these fail to take account of the fact that we have a larger public sector per person than other parts of the UK, leaving us some £300m short.

“It feels like Scotland is now being punished for having decided to employ more people in the public sector and to invest in key public services.

“Councils are in the process of setting their budgets now, so the sooner we have clarity over this issue the better — this is needed urgently.”

She said the Scottish government will “continue to work closely with Cosla to press the UK government to provide the funding needed to support public services in Scotland.”

A spokesman for the Westminster government said: “The Budget delivered more money than ever before for Scottish public services and the Scottish government receives over 20 per cent more funding per person than equivalent UK government spending.

“It is for the Scottish government to allocate this across its own public sector and meet the priorities of people in Scotland.

“It will also receive additional Barnett funding on top of this record £47.7 billion settlement as part of support provided in relation to changes to employer National Insurance.”