Page last updated at 00:09 GMT, Tuesday, 13 October 2009 01:09 UK

Cuts set to 'hit Scotland hard'

Calculator and pen
The report says urgent reforms are needed to avoid deeper cuts

Scotland may be hit disproportionately hard as spending cuts impact on the public sector, experts have warned.

Consultants PriceWaterhouseCoopers (PWC) said urgent reforms in working and delivering services were needed.

A PWC report said the public sector in Scotland already accounted for 50% of GDP, compared with 40% in England.

The Scottish government challenged the findings and said the report was inaccurate about the size of the public sector in Scotland.

The report - 'Dealing with (even more) debt - Big decisions, tough choices' - also warns that some leading UK public sector figures are planning jobs cuts of 15% or more.

The next three years will bring unprecedented expenditure pressure to the Scottish public sector and it is vital that we tackle this head-on
Mike Greig
PWC

It sets out a range of tax and spending options to control a £43bn UK fiscal gap the report claims needs to be closed by 2015/16.

The three options it puts forward are keeping current spending plans but raising taxes to about £26bn a year, avoiding tax rises but cutting spending by as much as 23% in the three years to 2013/14 - if health spending is to be shielded - or spreading the fiscal burden evenly between tax rises and spending cuts.

The report suggests the situation in Scotland faces being exacerbated by the size of the public sector, the impact of an ageing workforce, job losses in the financial services sector, and fewer jobs being created in the public sector.

Serious deficit

PWC partner Mike Greig said: "Going forward Scotland cannot afford the current level of public expenditure and we must find new ways to deliver more with less.

"Leaders who recognise the scale of spending squeeze that is coming are planning workforce reductions of 15% or more and up to 15% cuts in procurement spending.

"In addition they understand that they must urgently reform ways of working and transform service delivery."

He added: "Failing to take action now will lead to future draconian cuts across the board at a time when the public needs vital public services more than ever.

Our draft budget focuses on safeguarding effective delivery of frontline services and promoting economic recovery
Scottish government spokesman

"The next three years will bring unprecedented expenditure pressure to the Scottish public sector and it is vital that we tackle this head-on.

"A step change is required not only to balance the books and pay down public sector debt but also to ensure we make available resources to invest in the next wave of change and innovation to bring growth and prosperity to our country."

A Scottish government spokesman said there was no doubt the UK was facing an extremely serious deficit in its public finances.

He said: "Unfortunately, the report is inaccurate about the size of the public sector in Scotland.

"The official figures for 2007/8 show that total public expenditure as a share of gross domestic product is 40% for Scotland, including a geographical share of North Sea resources in Scottish GDP, compared to a UK-wide figure of 41%.

"The Scottish government is already taking action to respond to cuts imposed by Westminster.

"Our draft budget focuses on safeguarding effective delivery of frontline services and promoting economic recovery."



Print Sponsor


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific