Swinney announces pay and council tax freezes but flagship policies safe
By David Scott in Edinburgh
18 November 2010
Thousands of public sector workers in Scotland will have their salaries frozen next year and bonuses will be suspended under budget plans announced by Finance Secretary John Swinney.
Giving details of the draft budget yesterday, he also confirmed there would be a council tax freeze for the fourth successive year.
But there will be no change to flagship policies such as free personal care for the elderly, concessionary travel and plans to abolish prescription charges.
Swinney said the pay freeze, applying to Scottish Government staff and those working in government agencies and non-departmental public bodies, would affect workers earning £21,000 a year or more. Those earning less will receive a minimum increase of £250.
All access to bonuses would be suspended for one year and action taken to reduce the cost of high earning staff across the Scottish public sector, with the pay bill for the senior civil service falling by at least 10% by the end of 2011/12 and by 25% by 2014/15.
The minister told MSPs: ‘By taking the difficult decision to limit pay awards in the public sector, we are using the savings to protect jobs.’ The draft budget, which requires approval by MSPs, will require 3% efficiency savings across public services for 2011/12.
Spending on health services will be protected, with Scotland accepting its share from Westminster under the Barnett funding formula.
Swinney said his budget for 2011/12 – requiring a cut of £1.3bn – set out to address a ‘financial challenge without precedent since devolution’.
He announced that a reduction in local government funding would be restricted to 2.6% instead of 6.4%, provided individual councils accept a conditional agreement made between ministers and council leaders.
Pat Watters, president of the Convention of Scottish Local Authorities said that, given the Scottish Government’s priorities on health, the deal was ‘the best we could negotiate’.
Angela Scott, the head of CIPFA in Scotland, criticised the decision to budget for one year only. She said: ‘The Scottish Government will get £110bn over four years from Westminster. Financial planning is crucial, especially in a time of austerity and cuts, and budgeting for only one year represents a missed opportunity.’