Westminster’s axe hits home

The months leading up to now have been filled with nervous anticipation for people who work in the public sector, or rely upon public services. Everybody has known that cuts have been coming as the chancellor wields his axe with abandon, but until the publication of the Comprehensive Spending Review, nobody has been sure quite how severe they would be.

Unfortunately, it seems our worst fears have come true and Scotland is set to see its budget slashed even more severely than was anticipated. Although initial Treasury soundbites claimed that Scotland had gotten off lightly from the cuts, the devil –as always- is in the detail. Those details revealed that far from the £900m total that the Treasury suggested, Scotland’s budget from this year to the next will reduce by £1.8bn in real terms, a fall of 6.3% in a single year.

As part of that Scotland’s capital budget will reduce by £800m, a reduction of 25% in a single year. Yet capital spending is possibly the biggest driver of economic growth that the Scottish Government can control. Recent figures show that in the last quarter Scotland’s GDP increased by 1.3%, the biggest rise in four years, as a direct result of the SNP Government’s decision to accelerate capital expenditure to support the construction industry. The scale of these cuts to the capital budget alone puts 12,000 jobs at risk and is a deeply worrying development.

Scotland’s revenue budget, meanwhile, will fall by £1bn from this year to the next. This is the money that goes on day to day services and its reduction will be keenly felt across Scotland. These cuts go too far, too fast and smack more of ideological opportunism than sensible policy. Scotland’s future growth will be put in danger by the speed and scale of Westminster’s cuts and we face challenging times ahead as a result.

In the next few weeks, the Scottish Government will publish its budget for next year now that we finally know the level of resources that will be available. There will inevitably be extremely difficult decisions ahead in order to balance the books and we will again be hampered by trying to deal with the effects of the downturn with one hand effectively tied behind our backs.

If Scotland had the full economic powers of a normal independent country, we would not have been left in a position waiting to see how much less of our own money would be returned from Westminster to us. We would have been able to find the correct balance of cuts and investment that is appropriate for the Scottish economy, in order to drive growth and protect services while managing the deficit. Until Scotland has those powers, however, the Scottish Government has no choice but to administer the level of cuts being imposed on us.

There are enormous savings that must be found across departments, but the SNP Government is committed to protecting the front line services which we rely on as much as possible.

Indefensible cuts

Recent days have also seen the publication of another UK Government review which will have a disproportionate impact on Scotland. The Strategic Defence and Security Review has put the future of RAF Kinloss and RAF Lossiemouth in Moray in extreme jeopardy. Having myself made a submission to this review calling for those bases to be retained, this development is extremely disappointing.

The local economy heavily relies on these bases and will be hit hard should they close. Scotland already sees a geographic underspend of defence funding, and this review will only make this disparity worse.