Page last updated at 16:14 GMT, Wednesday, 26 November 2008

School spending to be speeded up

School pupils

Spending on new and improved school buildings in Scotland is being speeded up, ministers have announced.

The move came after the chancellor's pre-Budget report, which allowed Scotland to bring forward 260m of capital spending meant for 2010-11.

But Finance Secretary John Swinney also warned Scotland was facing its biggest spending cut since devolution, after UK ministers demanded more efficiencies.

He said the decision would put projects at risk across Scotland.

Labour said there was very little new in Mr Swinney's response, which he delivered in a statement to parliament.

The pre-Budget report, which aims to get the UK economy moving again, contained a cut in VAT, but took borrowing to record levels.

We have a broad indication but no detail of the measures to be rolled out
Andy Kerr
Labour finance spokesman
Welcoming the flexibility in capital spending, Mr Swinney said the "highest priority" would be given to school buildings, including a drive to increase classroom space.

Ministers will also speed up investment in transport infrastructure and energy efficiency, with more detail expected in the next few weeks.

But Mr Swinney said the UK Government's call for an extra 5bn in efficiency savings would mean a cut of up to 1bn in Scottish Government spending over two years from 2010.

He told MSPs: "It will mean the biggest cut in Scottish spending since devolution - and all this at the same time as the Treasury confirmed record oil revenues of 13.2bn this year and forecast a North Sea income of 55bn over the next six years."

Mr Swinney went on: "What was already the tightest settlement from Westminster since devolution has just become tighter still - and we remain deeply concerned that these proposals could cause difficulty for Scotland at a time when we're trying to get the economy to recover."

'Unacceptable hardship'

The finance secretary welcomed the reduction in VAT, from 17.5% to 15%, but said there was a "sense" that the cut was not enough to boost high street spending.

And he said the 2p increase in fuel duty would place an "unacceptable hardship" on communities, especially rural and island areas.

Labour finance spokesman Andy Kerr accused the Scottish Government of "utter dithering", adding: "We have a broad indication but no detail of the measures to be rolled out - unbelievably no list of projects ready for implementation."

Derek Brownlee, of the Conservatives, said detail was needed on the capital projects which were not being brought forward, "so that parliament and the public can have a full assessment on whether the impact on jobs and the economy has really been maximised."

Lib Dem finance spokesman Jeremy Purvis called on Mr Swinney to bring forward the A82 action plan and the Borders railway.

He said of the pre-Budget report: "We needed primary colours on Monday from the Chancellor but we got 50 shades of grey."

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