Page last updated at 01:30 GMT, Thursday, 25 February 2010

Report warns of biggest spending cuts since devolution

Pound coins
Public budgets are set to be the tightest since devolution

Public organisations are facing the toughest squeeze on budgets since devolution, according to a spending watchdog.

Audit Scotland has warned in a report that Scottish government targets of 2% savings will not be enough.

It said councils, health boards and other public bodies have saved £839m, which exceeded their targets.

But it warned they will need to look for further savings and different ways of working to keep services going.

Health boards must not think they can take the easy option to reduce costs by simply cutting staff
Theresa Fyffe
Royal College of Nursing

Deputy Auditor General for Scotland, Caroline Gardner, said: "Difficult decisions and new approaches will be needed to find other ways to increase efficiency and reduce public spending.

A Scottish government spokesman said ministers had warned that "the implications of the UK government's mishandling of the public finances would be substantial, leading to deep cuts in Scotland's budget".

He added: "We are driving our programme to deliver over and above the tough targets set and we are absolutely committed to continuing that process in the years ahead."

'At risk'

But the Royal College of Nursing said the NHS had to consider all the options set out in the report, not just cutting wage bills.

Director of the RCN Scotland Theresa Fyffe said: "Health boards must not think they can take the easy option to reduce costs by simply cutting staff or replacing registered nurses with healthcare and nursing assistants.

"A straightforward replacement of registered nurses with healthcare assistants would put patient safety at risk."

Conservative finance spokesman Derek Brownlee said: "This is an excellent report which further highlights the damaging consequences of Labour's financial incompetence on the public sector in Scotland and the need to take radical action to reshape the public sector."

Liberal Democrat finance spokesperson Jeremy Purvis accused the SNP of not taking seriously enough the threat to frontline services like education.

"On one hand the SNP call for restraint, but then they waste £30m on setting up expensive quangos like the invisible Skills Development Scotland and the laughable Scottish Futures Trust," he added.

Scottish Labour's David Whitton said the report highlighted serious problems and public bodies "selling off assets and raiding reserves to protect vital services".

He said: "I do not accept the case that the Tories and the SNP are making for further cuts and redundancies.

"The Scottish government need to re-order their priorities to protect jobs and services."

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