By David Scott
12 June 2009
Ministers in Scotland have been told by an influential committee to plan beyond next year’s Budget if they are to cope with the effects of the recession and a continuing decline in government spending.
In a report on June 9, the Scottish Parliament finance committee warned that ‘significant challenges and difficult strategic choices’ would be required as 2009/10 would be the peak year for public spending for some years to come.
They also suggested the need for better information and decision-making processes. Committee convener Andrew Welsh said the recession had undoubtedly affected the finances of individual public bodies and had a major impact on the budget likely to be available in Scotland in future
He said: ‘The result is that significant challenges and difficult strategic choices must be addressed in the 2010/11 budget. These choices have to prepare us for the possibility of even tighter public spending in Scotland in future as the pressures increase.’
The report follows an inquiry by the cross-party committee into the effects of the recession on Scottish public bodies, the likely pressures on the 2010/11 budget and the longer-term prospects for government spending.
The MSPs pointed out that, while departmental expenditure limits have increased, the cash available to the Scottish Government in 2010/11 is lower than originally envisaged in the 2007 Spending Review.
It said that this ‘raises short-term issues about budgetary planning for 2010/11’ and took the Scottish Government and Parliament into ‘new and potentially challenging territory’.
The MSPs also said that ministers should prepare contingency plans for future budgets that could be tighter than expected.
