John Swinney has been warned that he will need to make "significant spending reductions" later this year.
Chief civil servant John-paul Marks was questioned by MSPs at Holyrood today, confirming that he had spoken to Swinney about the cash crisis facing the Scottish Government.
This includes a £1.9billion funding gap between the SNP's proposed policies and money that is available to fund it.
Marks told MSPs: "We're doing our best", adding that he "has been very open that I consider fiscal sustainability to be a significant risk that needs active mitigation now."
John Swinney has been warned that he will need to make "significant spending reductions" later this year
PA
He said the process of building the Scottish Government’s budget this year was "one of the hardest experiences of prioritisation" required since devolution.
Marks was asked whether he had "told [John Swinney] that there is going to have be significant spending reductions when we hear this update from him as regard to his programme? Is that what we should be expecting as a parliament?"
The permanent secretary responded: "I have already done that, yes."
The Scottish Government will publish its medium-term financial strategy and tax plans on June 20, a delayed date as a result of the change in First Minister.
Reacting to the revelations, Scottish Labour finance spokesman Michael Marra accused the Scottish government of "recklessness" with money.
He said: "This revelation from the Permanent Secretary exposes just how precarious Scotland’s public finances are.
A spokesperson for the First Minister said: "I don’t think it’s a secret that we’re under significant pressure."
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"Successive SNP Governments and Finance Secretaries, including the current First Minister, have pushed the public finances to breaking point.
"Their recklessness means that frontline services for the most vulnerable now face swingeing cuts.
"In his statement to Parliament tomorrow, the First Minister must come clean with the people of Scotland as to how he will fix the SNP’s culture of financial incompetence and get the public finances back on track."
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But a spokesperson for the First Minister said: "I don’t think it’s a secret that we’re under significant pressure.
"The First Minister himself has said that in the chamber – that’s obviously been a reality for some time.
"We’ve had 14 years of austerity, that’s the way it is. Obviously, inflation and other issues in the economy are causing problems."
