Page last updated at 01:01 GMT, Thursday, 3 September 2009 02:01 UK

Study warns of 'age of austerity'

Anti-cuts protest
Local authority cutbacks have already provoked fierce opposition

Deep and prolonged cuts in the Scottish Government's budget will mean a "new age of austerity", an economic study has warned.

Glasgow University's Centre for Public Policy for Regions said public spending was likely to fall 8.5% in real terms by 2013/14.

But if health spending is protected, other services could face a 13% cut.

The economists urged public sector leaders to make plans for reduced budgets and to embrace radical reform.

The report The Scottish Government's Budget - Growth Prospects and Budget Options was commissioned by the Society of Local Authority Chief Executives.

It concluded the chances of the Holyrood budget rising or standing still were "vanishingly small".

A new age of austerity looms and very little time exists to prepare for it

The economists warned that ring-fencing some areas would "turn the screw" on every other sector that did not benefit from that concession.

"The downturn in budgetary prospects is set to be deep and to be prolonged. Wherever possible, preparations for these austere times are likely to improve the effectiveness of the final budgetary decisions made," they said.

Among the ideas they floated were a shift away from a political debate around class sizes, health spending and police numbers to focus on outcomes such as pupil attainment, healthy lifestyles and improved neighbourhood security. The economists said pay increases would have to be limited to minimise job losses.

They warned council leaders they would face public and interest group pressures.

The report also suggested the map of service delivery should be re-configured, across councils, police and fire authorities, health boards and other agencies.

The report concluded: "A new age of austerity looms and very little time exists to prepare for it. Many of the potential areas for larger savings will take time to implement and so radical ideas too need to start to be addressed now."

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