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Pay-back

Douglas Fraser | 13:25 UK time, Wednesday, 25 February 2009

It's a busy day for news on the Scottish economy, and it doesn't get any cheerier.

A new analysis of the state of the public finances has just been published by the Centre for Public Policy for Regions, based at Glasgow University.

It has tried to absorb the implications of Alistair Darling's pay-back of the huge loans the Chancellor is taking out to get Britain through the worst part of the recession.

And while every aspect of this forecasting is in uncertain territory - more so than usual - there is a clear warning to Holyrood politicians that they are going to have to take some tough lessons in belt-tightening.

That may also be the message coming from Downing Street today, when the Prime Minister meets Alex Salmond and the first ministers of Wales and Northern Ireland, none of whom are impressed by the prospect of a sharp cut in grant already announced for next year.

It remains a matter of dispute whether it would be wise to start cutting public sector budgets and paying back debt as early as spring of next year.

But there is little doubt that the bills will have to be paid back some time, and these devolved administrations will feel some of that pain.

The Glasgow University study has three scenarios, the best of which sees hardly any real growth in Holyrood's budget between 2011 and 2014.

The worst of them, which they describe as an "eminently possible" outcome of the recession spending, would see recurring real terms cuts over those three years.

The end result would be a budget in 2013-14 some 7.5% lower than the peak year, which will be the one starting this spring.

Such a real terms cut would be set against the background of pressures from conventional spending on health, education and public sector workers, as well as new costs from transport and investment needs, the Commonwealth Games and the new Forth Bridge.

One of the CPPR's recommendations is that the Scottish Government needs a much tougher Treasury-type department to crack down on spending departments and do the unpopular stuff, having the long-term mindset and doing the contingency planning.

According to CPPR director Richard Harris: "The Scottish Government needs to start to make contingency plans looking into the distance rather than simply concentrating on next year's Budget".

Comments

  • Comment number 1.

    The Scottish Government simply cannot exoect to be insulated from the effects of the economic downturn and all of us in the Uk must expect to bear our share of the pain. Private industry is already cutting its cloth according to how it sees the economy and Holyrood, the civil service and the councils all must do the same. It is unacceptable for us to read that Council Tax rises of 'ONLY' 3% are to be expected this year. We should already be seeing a FALL in Council Tax not an increase. Councils and regional governments must start to recast budgets from the ground up. It's called zero-based budgetting and the fact that no Council has done it before doesn't absolve it from doing it now. If private busines is having to stop final salary pensions then so must Holyrood and the civil service, if private industry needs to let staff go to keep its business running then so should Holyrood and the civil service. Everyone should be involved in the rescue of Britain not just the wealth earners of the country.

  • Comment number 2.

    First step - sack the current Secretaries of State for Scotland, Wales and Northern Ireland (at the same time as dismissing their underlings, and selling off the building(s) they occupy), and appoint the Frst Ministers of the devolved Parliament/assemblies in their stead.

    (Constitutionally, it is necessary for there to be Secretaries of State for Scotland, &c., but I do not believe that there is any requirement that the individuals be Members of Parliament.)

  • Comment number 3.

    #2 Older than the Pyramids

    I don't think that there is any constitutional requirement for Secretaries of State for Scotland, Wales and Northern Ireland. The post has been vacant before.

    There are really only two purposes for the post

    1. doling out the sweeties for the Scottish Budget

    2. Being empowered to overrule anything the Scottish Parliament does.

    Well there is a 3rd I suppose - being a highly paid political attack dog.

    Cameron (due sympathies) has developed an intriguing ploy, by appointing Auntie Annabel to the Shadow Cabinet as Shadow SoS. If that continued into a Tory Government, then we'd have the fascinating prospect of the leader of one of the smallest parties at Holyrood, being able to overrule every other MSP!

  • Comment number 4.

    What is the outcome of the meeting between Alex Salmond and Gordon Brown? Any word yet?

  • Comment number 5.

    Salmond's big beef is the fact he's introduced Free eye/dental checks, he's reduced prescription charges to a fiver and is committed to scrapping them entirely in the next couple of years. His party/government have once again this year committed to a zero reduction in Councl Tax and pledged the same as long as the SNP are in power at Holyrood.

    As a born & bred Scot, living under these policies is a good thing, but becomes worrisome when one analyses the sustainability of such policies, i.e. 'at what cost to other services'?

    Astonishingly, Alex Salmond -until yesterday-had not met with our Prime Minister in over a year, much preferring to cajole the Scottish public with his usual rhetoric and -some would argue- diatribe about why Scotland doesn't need to be conjoined with England. This single failure on his part and on behalf of the vast majority of people in scotland who DIDN'T vote SNP, illustrates the extent of the contempt to which the SNP hold towards both Westminster and the vast majority of Scots!

  • Comment number 6.

    Why goodness tinylespaul how I wish that I could see the world through your eyes. Let me put you straight on eyetesting in the UK and then in Scotland.

    In England and Wales the government provides less than £20 per person for 'free' eye testing. But think about it if you go to the doctor with a heart murmur or worse and he says to you you've got £20 mate what would your response be?

    Eye testing in the UK was essentially privatised by the Tories. The £20 free eye test is the sprat to catch the mackrel. The opticians make ALL of their money on product sell through.

    And people don't go to the options for the 'free'test because their mates in the pub or the bingo hall tell them that they got glasses and it cost them several hundred quid. The whole thing is the most terrible scandal.

    The worst part of it is that the eyes are the visible outposts of the brain. If you have a problem with your eyes then you also have a brain disorder. How many road accidents are caused by people who don't get their eyes tested because they can't afford to.

    But it gets worse. Thanks to breakthroughs in our understanding of microbiology in recent years we have been able to improve eye testing and sort out underlying problems. The industry has effectively gone through its own Fosbury Flop replacing the old stradling of the bar. And yet the vast majority of opticians still only straddle the bar. They won't spend the time and money on the extra training necessary at the Institute of Optometry. Today our vision shoudl be 2020true but it is still only 2020 and so many people suffer because Bob Hughes and his staff at the Association of Optometrists do not communicate government policy which is not going to change. I had a letter from Alan Johnson to that effect via my MP Alistair Darling this very week. The Prime Minister is also completely aware of this situation. Invoking scripture to say that he can't walk on by on the other side when he sees real distress is so utterly, utterly disingenuous. He even stole that line from me in my correspondence to Alistair Darling on the subject that he was copied in on.

    In Scotland provision is much better because at least kids can get an expensive detailed eye examination on the State. And trust me orderly queues are being formed as occupational therapists see the real benefit to kids that were previously written off by the system as being uneducatable when all they needed was a decent pair of glasses.

    And if you don't believe me, then think on. ´óÏó´«Ã½ Edinburgh Producer Amanda Hargreaves has done two stirring programmes on this issue and picked up a broadcast health journalist of the year award for her efforts. The whole thing is the most incredible scandal and Alan Johnson needs to hang himself in shame rather than encourage people to think that he might take on Harriet to succeed Gordon.

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