UK Chancellor Rachel Reeves delivered the 2025 Spending Review to MPs in UK Parliament yesterday (Wednesday 11th June), which saw Scottish Government allocated an average of £50.9bn per year. This includes an additional £2.9bn annually through the Barnett formula, highlighted the Scottish Grocers’ Federation (SGF).
However, Finance Secretary Shona Robison claimed that The UK Spending Review had failed to deliver for Scotland, accusing the UK Government of “treating Scotland as an afterthought”.
The funding includes £2.4bn per year for day-to-day spending over the next three years and over £510m in capital investment across the next four years. In the same time period, £452m has been allocated to City and Growth Deals in Scotland, while £100m is for a joint investment with the Scottish Government for the Falkirk and Grangemouth Growth deal.
There is a commitment to deliver four Investment Zones and Green Freeports in Scotland, including £160m each over 10 years for Investment Zones in the North East of Scotland and in Glasgow City Region; and up to £25m each for the Inverness and Cromarty Firth, and Forth Green Freeports.
£500m has been allocated to HMRC’s digital transformation, aiming to move 90% of customer interactions online by 2029-30. Meanwhile, £1.7bn will be invested over four years to expand HMRC’s compliance and debt management capacity, aiming to raise £7.5bn in additional tax revenue by 2029-30.
Local authorities will receive additional income through the Extended Producer Responsibility (EPR) scheme for packaging.
In addition, the government plans to invest at least £80m per year in tobacco cessation programmes and enforcement, supporting the implementation of the proposed Tobacco & Vapes Bill. The SGF is waiting to find out if this funding is solely for England.
The Chancellor also announced that the UK policing budget would increase by 2.3% per year above inflation over the review period, in line with the baseline for other departments.
The Association of Convenience Stores (ACS) welcomed the “long overdue” cash to fund tobacco enforcement, but warned that police underfunding would undermine retailers’ confidence in law and order.
ACS has highlighted that UK Trading Standards teams are drastically under-resourced, with officers typically only able to visit a premises as a result of intelligence and reports from consumers or other businesses. Research conducted for ACS last year showed that Trading Standards teams would need at least £140m over the next five years to deal with illicit vapes alone, with £30m required this year.
ACS chief executive James Lowman said: “Retailers are losing confidence in the ability of the justice system to make a difference to the level of crime that they experience on a regular basis, both in terms of direct impact through theft, abuse and violence, as well as indirectly through losses to rogue traders selling illicit goods.
“The investment in enforcement of the tobacco and vapes market is long overdue and will be welcomed by all responsible retailers who are sick of seeing rogue operators trading with impunity in their communities. This must change, and if the £80m announced for smoking cessation and enforcement is properly-allocated to the front line, it could make a real difference. We must prioritise resources to shore up the most basic principles of the rule of law, to support those who follow it and intervene against those who don’t.”
