Wednesday, June 23, 2010

Free Scottish services to go south?


I didn't want to blog on the budget, I'm already sick of hearing about it. But it seems that the coalition that "we in Scotland" (to coin a phrase) did not vote for are going to level the playing field between north and south come what may. After all the thought that scrounging Scots should spend England's money on making life in Scotland better for the poorest must be a genuine threat to their precious Onion (oops, I did that on porpoise!). Oh and services going south is metaphorical not literal.

As a result of the coalition budget Scotland is facing a potential £5 billion-plus cut in spending over the next four years, seemingly throwing into jeopardy a range of benefits, including free personal care of the elderly, concessionary travel and free university tuition.

The warning from a leading economist came as the Scottish government also issued a grim forecast that George Osborne’s measures could pitch the country into “a spiral of decline”, threatening economic recovery north of the Border.

The deepening crisis for Holyrood’s spending plans comes as a result of Mr Osborne’s decision to slash unprotected government department allocations across the UK by 25 per cent by 2015.

Economic experts said that it meant spending in Scotland was almost certain to fall by an estimated 16 per cent over the same period — 4 per cent more than predicted by Dr Andrew Goudie, the Scottish government’s chief economic adviser, in an analysis in April, and bringing the annual block grant from the Treasury down from £30 billion a year to around £25 billion.

The reduction would have been even more dramatic without Osborne’s concesssion that health and education spending in England will be protected. The Barnett Formula, which decides the level of Holyrood’s block grant from Westminster, means that Scotland gets a proportion of all new spending in these sectors south of the Border.

However, Professor David Bell, Professor of Economics at the University of Stirling and adviser to Holyrood’s Finance Committee, said that, despite that cushion, the impact on public services in Scotland would be “dramatic”.

He added: “This is going to be difficult to effect with efficiency savings alone. I just cannot see that happening.

“You either have to cut back on services or you start to charge for previously free public services. “My view is that consideration of whether free personal care, concessionary travel and other free services can continue to be delivered cannot now be avoided,”

Professor Bell pointed out that the Scottish government’s Independent Budget Review Group (IBRG), due to report at the end of July, will have to consider the full implications of yesterday’s package.

Not guaranteed to happen I suppose, but puts things under serious strain.

4 comments:

  1. I've yet to read about this Tris as I switched off later yesterday. Like you I was budgeted out. It does seem really serious but I'm happy that it's in John Swinney's hands.

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  2. S/R It may be Andy Kerr who guides this through. After all Scotland's budget is fixed till 2011 and anyway the SNP gave a comittment not to alter the concessionary travel scheme. And unlike the Lib Dems on VAT the SNP likes to keep its promises.

    Whether we still have the SNP in harness after May 2011 is a debatable point in terms of whether it is even advisable for the SNP to have to enforce the Tory cuts or better off leaving Labour to do that.

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  3. I listened to a little bit of the budget; and to be fair there were good and bad things in it. The doubling of the allowance to troops in Afghanistan does not go anywhere like far enough. The fact that the difference between the income of the most junior and the most senior in government departments will have to be no more than 20 x is, likewise, a start, but a pathetic one (and does the BBC count in that calculation: If so enjoy Mark!!!!)

    Anyway, to our own country.

    As in so many things, this is a budget largely based on the English economy and the English economic cycle. That's not a criticism of wee George. He can only produce one budget, not four, so logically he works on the country with 50 million inhabitants: not the one with 5, 3 or 2 million.

    But it certainly wasn't a budget for Scotland and the sooner Scotland makes its own budget for its own people the more likely the economy will grow.

    It would be unthinkable for the budget for Sweden, The Faeroes, Iceland, Denmark, Greenland and Norway to be set in Helsinki. The economies are different, although clearly associated. Why the budget for Scotland would have to be controlled by how much the English decide it is fair to spend on the NHS is beyond me.

    Munguin, it was Labour who got us into this mess, I think it would be fitting for Labour, at least in Scotland, to have to implement the cuts that the Toriberals are sending to to this colony.

    Ironic that it was the Liberal influence that brought about things like ‘care for the elderly’ and ‘no tuition fees’.... and the Liberals that are in government in London to get rid of them.... But I never heard a Labour MSP say “it wasnae us; it was the Liberals what done it” when they came up in discussion.

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  4. Tris: don't count the Lib Dems out in Scotland yet. I would not be surprised if they had the bare faced cheek to go into coalition with Labour here in Scotland while in coalition with the Tories in England. This is politics after all: the art of the possible.

    That would be even sweeter if they had to undo what they did in the last coalition. And by that I mean sweeter politically not literally obviouslly it would not be sweet for those losing their bus passes.

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