1st May 2009
By David Scott in Edinburgh
A powerful budget department similar to the UK Treasury should be set up in Scotland to control the stark spending choices now facing the Salmond administration, a leading think-tank has suggested.
In a paper submitted to the Holyrood finance committee on April 28, the Centre for Public Policy for Regions warned that impending reductions in the Scottish budget were ‘on a scale hitherto unimagined’. This could force the abandonment of major policies such as the council tax freeze and free prescriptions.
‘To help make the tough choices, CPPR would argue that Scotland will need a strong and powerful finance/ budget department, a more HM Treasury-like body that spends little but has the greater power among departments,’ the paper said.
‘Such a body would tightly control spending in other departments and make the necessary, but possibly unpopular, spending decisions.
‘It should also have a long-term mindset and have contingency plans in place for different likely outcomes.’
The CPPR’s evidence to the finance committee, which is conducting an inquiry into the 2010/11 Scottish budget, follows claims by Finance Secretary John Swinney that the implications of last week’s UK Budget will be ‘deeply damaging’ for Scotland.
John McLaren, one of the authors of the study, told the committee that the deterioration in the Scottish budget since November was ‘considerable’ and that cuts required could be as much as £3.8bn, or 13%, by 2013/14.
He said: ‘Overall, the Scottish Government now faces, to a far greater degree than ever before, some stark choices.’
According to the think-tank, which is backed by Glasgow and Strathclyde universities, the Scottish Government is facing a number of budgetary choices that might require reconsideration of existing flagship policies.
These include the planned continuation of a council tax freeze, free prescription charges, free personal care for elderly people the abolition of bridge tolls, free higher education and a consistently expanding health budget.
The paper also suggested the need for deeper efficiency savings, cutting back planned capital projects and a move from universal public services to more targeted ones.
It stated: ‘Many of the above approaches are radical and controversial. Nevertheless they comprise a set of options that may well have to be seriously considered if the budget is to be balanced in these tough financial times.’
