Scottish budget squeeze may last 16 years
Jul 07, 2010 No Comments
The Scottish Government’s Chief Economic Advisor has revised the public sector finance predictions for Scotland, and now estimates it will take 16 years for public spending to return to 2009/10 levels.
The updated analysis compiled by Dr Andrew Goudie following the emergency budget states that rather than spending levels returning to present levels in 2022/23, it is likely to take until 2025/26. It also predicts that over this period, the Scottish budget will be squeezed by £42bn, whereas the previous report published in April estimated this figure would be between £25bn and £35bn.
As the exact details of future spending allocations to Scotland will not be available until the Comprehensive Spending Review (CSR) is announced in Westminster on 20 October, the document plans for a number of future scenarios.
The revised analysis also shows however, that a third of the spending cuts the Scottish Government faces were announced during the UK coalition government’s emergency budget last month, with only two thirds planned by the Labour government before the General Election.
Commenting on the predictions, Finance Secretary John Swinney said that the revised plan showed the UK coalition government was cutting too quickly and risked damaging the economy further.
He added: "Of course we won't know what Scotland has to spend next year until the UK Government announces its Spending review in October. It is not possible to lay out specific budget plans until then.
"But this analysis makes clear the scale of the task we will face in responding to Westminster cuts, both in the short and long term.
"That is why we have set up the Independent Budget Review that will report by the end of July and inform the debate all of Scotland must have ahead of our next budget. The Scottish Government's Chief Economic Advisor has written to the IBR with this updated analysis today.
"The Scottish Government is leading that process and is doing all it can to ensure we deliver full value for taxpayers' money across the public sector.
"This analysis further reinforces the case for Scotland to have the powers of financial responsibility so that we can grow the economy and boost revenues. The Government Expenditure and Revenue Scotland report already shows a current budget surplus in Scotland of £1.3bn for 2008/09, compared to a UK current budget deficit of £48.9bn. Scotland needs to have financial responsibility as an alternative to a sustained period of Westminster spending cuts."