SNP ministers have been accused of delivering a "smack in the face" for struggling businesses and the NHS after disclosing they had failed to spend nearly £500 million of their budget during the pandemic.
The Scottish Government’s Budget Outturn for 2020/21, published yesterday, showed £449 million of its £48 billion spending pot lay unused at the end of the financial year in April.
This included £182 million allocated to the NHS, despite the pandemic causing waiting lists to surge.
Humza Yousaf, the Health Secretary, has said it will take "years" to return to pre-pandemic levels of cancer diagnoses, waiting times and planned operations.
Tom Arthur, the Public Finance Minister, said on Thursday the £449 million "underspend" represented only around one per cent of the Scottish Government’s total Budget and the money had been carried forward to the current financial year.
But struggling businesses throughout the pandemic have consistently complained about the SNP administration providing inadequate and tardy support to help them survive during lockdown.
Labour said business owners trying to keep their heads above water would consider it a "cruel irony" that hundreds of millions of public money had gone unspent.
Stephen Montgomery, spokesman for the Scottish Hospitality Group of licensed premises, said: "Funding has been extremely tight and therefore the Scottish Government have a duty to direct this money where the Scottish economy needs it most, particularly for night-time and late-night venues which haven’t been able to operate throughout the pandemic."
The row broke out as the Scottish Labour leader claimed the deaths of 49 health and social care workers during the pandemic could have been avoided if proper personal protective equipment (PPE) had been provided.
Anas Sarwar told First Minister’s Questions the Scottish Government had failed to follow the recommendations of two planning exercises in 2015 and 2018 that raised concerns about PPE.
However, Nicola Sturgeon said ministers had improved stocks and supply chains after an Audit Scotland report warned that some items came within eight hours of running out during the early part of the pandemic.
The First Minister acknowledged earlier this week that the pandemic had "placed a strain on our relationship with business" amid widespread concern that her lockdown decisions fail to take sufficient account of economic considerations.
She cited her decision last month to keep Glasgow under Level 3 restrictions for longer, meaning pubs and restaurants could not serve alcohol indoors, arguing the move was necessary to protect public health.
Hospitality premises complained the £750 maximum additional business support on offer was "pitiful". Self-catering firms and taxi drivers are among the other people to complain they have been forced to wait months for help.
In a statement at Holyrood, Mr Arthur said the Scottish Government spent more than £9 billion on Covid-19 support in the past year, more than it had been given by the UK Treasury.
He said the funds unspent comprised £374 million of day-to-day resource funding, £8 million for capital projects and £67 million of financial transactions, which can be used for loans or equity investments.
Confirming the £449 million total would be added to the 2021/22 budget, he said: "It is therefore important to note that there is no loss of spending power to the Scottish Government as a result of this carry forward.
"Every penny has been allocated in full, allowing us to implement Covid response measures at the most optimal time rather than being constrained to a single financial year."
Mr Arthur said an extra £200 million for the NHS came "late" in the financial year from the UK Government and this had not been spent as "it was judged that this was not going to align with public health spending cycles".
But Daniel Johnson, Scottish Labour’s finance spokesman, said: “Half a billion pounds underspend at a time of crisis is simply a smack in the face to businesses that have been crying out for support.
"It’s not good enough for ministers to claim funds are ‘allocated’ if they cannot explain how it will help businesses. We need action from the Scottish Government, not dither and delay."
Willie Rennie, the Scottish Liberal Democrat leader, said: "When businesses, especially tourism businesses, are crying out for support, they will find it baffling that millions of pounds of business support is stuck in government accounts."
Liz Smith, the Scottish Tories’ Shadow Finance Secretary, also criticised the handling of the budget. She added: "Scots waiting in pain for operations, employers trying to keep their businesses above the water – they won’t take kindly to the SNP hoarding £449 million."