Scottish Government urges UK Budget to cut energy bills and protect grant funding

In a statement published at 00:01 on 25 October, the Scottish Government set out demands for this week’s UK Budget. Social Justice Secretary Shirley-Anne Somerville asked the Chancellor to cut household energy bills and reverse what Scotland describes as a projected real-terms reduction in its 2027-28 block grant. These are requests, not measures adopted by the UK Government.

The funding dispute concerns growth after inflation, not a fall in the cash amount. HM Treasury’s 2025 Spending Review sets Scottish resource departmental spending at £42.7 billion in 2026-27 and £43.8 billion in 2027-28 in current prices. It describes the Scottish settlement as averaging £50.9 billion a year across the review period, including resource and capital funding.

Scotland’s own published calculation compares the settlement with a different benchmark: a path that would give its resource funding 1.2% annual real-terms growth. On that assumption, the Scottish Government put the 2027-28 settlement at £43.840 billion against £44.206 billion on the comparator, a £366 million difference. Its calculation also showed differences of £95 million for 2026-27 and £589 million for 2028-29, or £1.05 billion across the three years. These are gaps against the chosen comparator, not nominal cuts to the announced settlement.

Somerville said the funding mattered for NHS waiting times, schools and efforts to reduce child poverty. She also asked for action on energy costs, saying bills were hundreds of pounds above what the UK Government had promised when it took office. That is the Scottish minister’s claim in the statement; it gives no bill series or calculation for the comparison.

Ofgem’s current cap gives a separate measure of household energy costs. For 1 October to 31 December 2026, it sets an annualized £1,723 reference for a typical-use household paying by direct debit in England, Scotland and Wales, up 4% on the prior period. This is not an individual bill or Scotland-only price; charges vary by use, region and payment method. Because electricity VAT is temporarily zero this quarter, Ofgem cautions against direct cost comparisons with earlier periods.

The statement also calls for ending the benefit cap, bedroom tax and young-parent penalty in Universal Credit, and for scrapping the freeze on Local Housing Allowance rates. It presents these as priorities for the UK Government to consider in the Budget, alongside its request to change the funding path. No new welfare or energy measures were adopted in the statement, and the final Budget will determine whether any of the requests are taken up.