A tale of two Budgets

Left Foot Forward's Devolution Correspondent Ed Jacobs looks at the Scottish and Welsh draft Budgets, published yesterday.

Left Foot Forward’s Devolution Correspondent Ed Jacobs looks at the Scottish and Welsh draft Budgets, published yesterday


Speaking to MSPs in Holyrood, finance secretary John Swinney yesterday confirmed what had long been expected, namely that Scottish public sector workers earning £21,000 or more a year face a pay freeze.

In outlining the government’s draft budget for 2011/12, Mr Swinney explained:

“By taking the difficult decision to limit pay awards in the public sector, we are using the savings to protect jobs.

“Our pay restraint policy will support thousands of jobs in local economies across Scotland.”

The budget announcement follows the UK government’s spending review which, the Scottish finance secretary concluded, meant that Scotland was forced to find savings of £1.3 billion over the next year.

Other key measures from the budget include:

• An agreement with the body representing local authorities in Scotland, COSLA, to further freeze the council tax and maintain police numbers as well as key education and social care commitments;

• Funding for new, major infrastructure projects;

• Protecting health spending and abolishing prescription charges;

• A minimum annual pay increase of £250 for public sector workers earning under £21,000 a year;

• An efficiency savings target across the public services of 3 per cent;

• Delivering greater savings from collaborative procurement – with further savings of £61 million in 2011-12 and £200m over the next three years;

• An increase in business rates paid by the largest retail properties;

• Cuts will be made to the Scottish Funding Council’s budget and Skills Development Scotland; and

• Transport spending will prioritise existing projects over new ones and the budgets for enterprise and tourism will be cut.

Presenting his proposals, Mr Swinney gave the impression of a card shark playing the best of a poor hand, saying:

“This is a Budget that addresses a financial challenge without precedent since Devolution. Despite the biggest reduction in public spending imposed on Scotland by any UK Government, this is a budget that protects jobs, economic recovery and frontline services.”

Reaction from opposition politicians was unrelentlessly critical of the finance secretary for introducing a budget for one rather than three years, seen to be ducking the harder decisions until after next May’s elections.

Labour’s Shadow Finance Secretary, Andy Kerr explained:

“This government has failed. It has put party before nation, self-interest before public interest and the finance secretary’s own job before those of the people he is supposed to serve.

“He is not running a country – he is running an election campaign. It is outrageous that our local authorities, health service, our universities, further education colleges, police and fire services are being denied the ability to plan effectively.

“They are all demanding clarity so that they too can set budgets, deliver services and reassure staff, but they cannot because of the SNP.”


If the argument against the SNP was that they had produced a short term budget for political gain, in Wales the criticism was the other way as budget minister, Jane Hutt, unveiled proposals that will see departments spread the pain of 10 per cent cuts over the next three years, with all departments affected, including a 7.6 per cent cut to the NHS budget.

The minister outlined a Budget that revealed:

• Next year’s budget will fall by £860 million and be £1.8 billion lower by 2014-15;

• Reductions in health spending will not be started until after 2011-12;

• Spending on social services will increase by £35m by 2013-14, an increase of 3 per cent;

• School budgets will increase by 5 per cent over the next three years;

• Funding for free bus passes, free prescriptions, free school breakfasts and milk for primary school children will increase by 3.7 per cent by 2013-14 to protect these initiatives;

• A £47 million boost for capital schemes this year designed to support the construction industry.

In presenting the budget proposals, the minister, on behalf of the Labour/Plaid Cymru coalition, sought also to argue that she was making the best of a bad settlement from the coalition government in Whitehall. Ms Hutt concluded:

“The draft budget is framed against the most difficult financial backdrop since the advent of devolution. We are on record as stating our opposition to the speed and depth of cuts imposed by the UK Government at this crucial phase of recovery from recession.

“However, having been dealt this hand, we are determined to do what it takes to stand up for the people of Wales and continue to provide the right support for those who need it most.

Somewhat unbelievably, however, Welsh Lib Dem leader, Kirsty Williams, sought to attack the Budget on the basis of the economy being too fragile to take such cuts, despite her party having played such a key part in the largest fiscal cuts in a generation in Westminster.

She declared:

“The economic recovery is still fragile. In these circumstances, it beggars belief that the economy and transport department that should be driving the Welsh economic recovery has faced some of the biggest cuts.”

The final budgets in Wales and Scotland are expected to be approved in February.

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