THE Finance Secretary has warned the Scottish Government may need to make “deep cuts” to public services if Holyrood does not receive new fiscal powers to help the economic recovery from the Covid-19 crisis.

Kate Forbes said the arrangements currently in place make it “increasingly difficult” for the Government to fund its response to the pandemic without hitting other areas.

The MSP says it’s “critical” that the UK Government give Holyrood new borrowing powers – adding it is the only way ministers can avoid a “return to austerity”.

READ MORE: Nicola Sturgeon: More borrowing powers needed if lockdown continues

Writing in The Scotsman, Forbes explained: "Our funding needs for the NHS, business and the third sector are greater than the sums provided by the UK Government and, as things stand, the Scottish budget will have to make up the balance.

"While we have been able to re-prioritise some existing budgets, it is becoming increasingly difficult without impacting on vital public services.

"The devolved arrangements were not designed for a health emergency and an economic crisis of this scale.

"With a global pandemic raging, fast decisions on public spending are required and it is critical that we have borrowing powers and greater financial flexibility to respond effectively.

"Otherwise, the only way the Scottish Government will be able to fund our ongoing response would be to make deep cuts to other services."

She went on to say that is a path the Scottish Government will always resist – but the only way it can be rejected it with “greatly enhanced fiscal powers”.

The Scottish Government currently has the power to undertake capital borrowing of up to £3 billion with an annual limit of £450 million and resource borrowing of up to £1.75bn with an annual limit of £600m. Resource borrowing can only be carried out under specific circumstances set out in the Fiscal Framework.