Page last updated at 14:35 GMT, Friday, 18 December 2009

Experts predict hard times ahead for public spending

Unidentified hand holding scottish bank notes
A fiscal report predicts grim times ahead for public spending

Grim times lie ahead for public spending, according to a report by the Centre for Public Policy in the Regions (CPPR).

The report projects that the Scottish government budget is expected to suffer an after-inflation annual cut of more than 3% for three years running.

The SNP said the report had confirmed their predictions on public spending.

But the centre said there was too much uncertainty to allow for a reliable estimate of future spending.

The CPPR report has projected that the biggest impact on public spending will be experienced in 2011-12, when there will be Whitehall-led cuts via the Barnett Formula, the method used to allocate spending.

SNP Treasury spokesman Stewart Hosie said: "This report confirms the warnings the SNP and John Swinney have been making for some time.

Overall, the Scottish government now faces unprecedented change in relation to its budgetary future
CPPR spokesman

"Scotland is set to feel the impact of London's spending squeeze and the Treasury's failure to accelerate capital this year will only exacerbate the effects."

The CPPR's findings come in its growth predictions for the Scottish government, updated to take account of Chancellor Alistair Darling's Pre-Budget Report.

The independent report said that Scotland's budget could fall by 3.2% a year in the three years from 2011-12 to 2013-14 - with annual decreases of 4%, 2% and 3.65%

A spokesman for the CPPR, a joint research operation by the Universities of Glasgow and Strathclyde, said: "The prospects for Scotland's budget remain grim.

"Overall, the Scottish government now faces unprecedented change in relation to its budgetary future.

"Such a future may therefore require previously unprecedented changes in policy thinking and funding arrangements in order to steer a way through that limits the impact on the provision of public services."

Difficult decisions

A Scottish government spokesman said: "The government was taking steps to deal with this by driving forward a tough and ambitious efficiencies programme that exceeded its targets by some £300m last year."

However, he added: "There will still be difficult decisions and choices to be made.

"We have begun that process through next year's draft budget, which makes tough choices where necessary while protecting investment in frontline services and economic recovery."

Scottish Labour's finance spokesman Andy Kerr said: "The SNP have a single transferable excuse for their many broken promises, they blame the UK government.

"What the facts show is that the budget has increased every year, and will go up again by £943m next year.

"I'll even lend Alex Salmond my calculator if he can't do the arithmetic.

"The SNP are deliberately trying to mislead Scots by using the threat of a future reduction in funding to justify cuts they have already made."

Commenting on the CPPR report, the Scottish Liberal Democrat Finance spokesman, Jeremy Purvis said: "The Scottish Government needs to stop setting up new quangos with grotesquely high salaries that provide little support for the economy.

"Instead it should focus on frontline services which directly impact on people's lives."



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