Latest Public Sector News

07.08.13

‘Harshest cuts’ still to come for Scotland

Scotland is facing cuts of 25% in public sector spending, new analysis of Whitehall spending plans shows.

A study by the Centre for Public Policy for Regions (CPPR) found that 85% of funding to reduce the deficit would come through cuts, with reduction spread across eight years rather than the initially proposed five.

A ‘yes’ vote for independence could change the country’s spending profile, and the CPPR called for the Scottish Government to provide more clarity on its proposed spending plans.

Professor John McLaren, one of the authors of the study, said: “The day-to-day, or resource, budget cuts still to come include some of the harshest annual reductions seen over this period.”

Co-author Jo Armstrong added: “The £2.7bn real terms projected cut in resource spending still to come will be increasingly hard to accommodate, especially given the £1.8bn already experienced since 2009-10. Unfortunately we are unlikely to know where these cuts will appear until after both the independence referendum and the next UK general election.”

Responding to the report, the Scottish government's finance secretary, John Swinney, said: “If decision-making powers remain at Westminster, CPPR suggest Scotland will continue to face a future of public sector cuts or UK tax rises and increasing restrictions on our ability to spend Scotland's budget in the best way for Scotland.

“The recent allocation of financial transaction consequentials to Scotland, which can be used only to support loans and equity investment and have to be repaid to the Treasury, on top of the damaging cuts to capital already imposed over recent years, means that the Chancellor is restricting our ability to invest in the infrastructure that is essential to economic recovery and longer term growth.”

A UK Government spokesman said: “Scotland will have additional capital spending in 2015-16, which the Scottish government can use to fund shovel-ready projects as it wishes.

“Scotland has also received over £1.6bn in extra funding through the Barnett formula since the beginning of the Parliament and continues to benefit from substantially higher public spending per head than the UK average.”

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