Even ahead of its referendum in 2014, Scotland's budget indicates how the devolution of fiscal powers means that major changes to public services are underway
Scotland’s budget for 2013/14 commences its stage 1 approval process this week. The key objective of the budget is to achieve economic growth.
What this brings into focus is that the next financial year is but one year away from 2014 - the year of the referendum. The proposed vote on the constitution could bring the possibility of significant change for Scotland; a change that could mean a future Scottish budget and its budget choices will be radically different.
Yet a closer look at Scotland’s £34bn budget reveals that one of its priorities is to position Scotland to be ready for the challenge that significant constitutional change will bring.
Scottish finance minister John Swinney, in his foreword to the budget, makes it clear that achieving constitutional reform and independence for Scotland is one of the further aims, stating that 'full control over the economy and public finances is required.’
Further examination of the budget, set against the wider background of how Scotland’s public services have changed and are changing, reveals that the current journey since devolution has not been insignificant. Indeed the scale of change may provide an indicator of whether Scotland’s public services and public servants can adapt to whatever the future may hold. The details to date may surprise many.
The Scotland Act 2012 is regarded as the largest transfer of fiscal power from Westminster since the 1988 Scotland Act. The Act will, for the first time in 2015, provide Scottish ministers with powers allowing borrowing of up to £2.2bn to fund capital projects; a flexibility long sought by Scottish ministers.
Under that same Act, the devolution of two currently reserved taxes also means that Scotland is in the process of developing its own national tax collection service to collect the newly devolved land and buildings and landfill taxes.
The present Scottish variable rate of tax (a tax varying power) will be abolished and replaced with an income tax raising power, Scotland’s first under the current devolution settlement. Irrespective of the outcome of the referendum, there will be significant reform of a constitutional nature.
We can add to this the important reforms that are currently in the process of going ‘live’ in April 2013 Both featured in the Scottish government budget for the first time. First, the £1bn single national Scottish police authority; and second, the £300m single national fire service. There is also the proposed major reform to delivery of adult health and social care, with a bill expected in March 2013. This will transform how Scotland’s health and social care services are delivered in future.
Other changes have also been evident in the policy choices made possible by devolution. These include free personal care, free prescriptions and a fifth successive year of no council tax rises. In certain cases, central and local government have been required to cooperate in ways not previously seen.
The notion of certain free services, a national Scottish tax service and national police and fire bodies would not have been foreseen, yet all of these changes form part of the Scottish budget.
Taken together, this means that significant change has already been experienced by Scotland and by Scotland’s public services. The prima facie evidence is of a devolved nation, and a devolved budget. One that has risen to the challenges – and set mainly by Scotland itself.
Don Peebles is policy and technical manager at CIPFA in Scotland
