NICOLA Sturgeon has insisted that spending £20m on holding a second independence referendum is “a really good investment”.

Finance Secretary Kate Forbes revealed her updated spending plans for the rest of the parliamentary term on Tuesday – making real-terms cuts in a host of areas including local government – but with a focus on health and social security budgets.

In the Government’s constitution, culture and Europe portfolio, the only funding increase is £20 million set aside for a second referendum on independence to be held by next year.

Scottish Conservative leader Douglas Ross pressed Ms Sturgeon over the £20m, warning against the spend “in the middle of a cost-of-living crisis”.

But the First Minister said that the referendum will give “the people of Scotland an opportunity to choose a better future at this particular moment in time”.

She added: “UK Government decisions have cut our budget this year by more than five per cent in real terms, they will constrain growth in our budget over the next four years to 2% while inflation is close to 10%. Inflation in the UK, of course, which thanks to the folly of Brexit, is the highest of any G7 country.

“Every year right now, the Scottish Government is having to invest more than £700m mitigating the impact of Westminster policies that Scotland did not vote for.

“I think that £20m, 0.05 per cent, one half of one tenth of one per cent, of the entire Scottish Government budget, to give the people of this country the opportunity to choose a better future, is and will be a really good investment.”

But the Scottish Tory leader claimed that the First Minister's “eye is off the ball again”, warning that instead of “obsessing about independence”, the focus should be turned to the cost-of-living criss.

Mr Ross insisted that the £20m “could pay for more police officers, more teachers, more nurses”.

He added: “It could pay for more support for people facing rising energy bills and their costs at the supermarket.

“Charging ahead with a plan to divide us is the wrong priority when now more than ever, we need to pull together – using the strength and security we get as part of the United Kingdom to see us through the cost-of-living crisis, just like it saw us through the pandemic.

“How much worse does the cost-of-living crisis have to get for individuals right across Scotland before you will divert money away from an independence referendum?”

But Ms Sturgeon stressed that people are facing “a Tory-created cost-of-living crisis”.

She added: “I do think £20m to give Scotland the choice of a better future, a Tory-free future, is a good investment.”

But her opponent turned to the SNP’s record in government.

Mr Ross said: “Because of your Government's failures, we’re facing severe cuts to budgets for the police, prisons, schools, councils, rural affairs, enterprise, tourism and higher education.

“Scotland is paying the price for Nicola Sturgeon’s mistakes.”

He added that Ms Forbes’s spending review is “damning”, warning that the country is facing the worst financial outlook from a Scottish Government since devolution”.