News analysis Executive clears services for big take-off

10 Mar 05
Scotland's devolved administration has shown how it intends to keep right on to the end of the road and how much the journey is likely to cost Scottish taxpayers.

11 March 2005

Scotland's devolved administration has shown how it intends to keep right on to the end of the road – and how much the journey is likely to cost Scottish taxpayers.

The Executive's first infrastructure investment plan, welcomed by business and local authority leaders, sets out a joined-up, long-term strategy for improving public services.

Infrastructure investment plan: investing in the future of Scotland, published last week and debated in the Scottish Parliament on March 10, lays out a multibillion-pound expenditure programme for projects such as schools, hospitals, roads and housing.

Although devolution allows Scotland to handle most expenditure issues in its own way, the infrastructure investment initiative is in line with recently introduced Treasury rules requiring all Whitehall departments to produce separate plans on capital investment.

However, Scottish Finance and Public Service Reform Minister Tom McCabe describes the Executive's document as a first step to securing 'a distinctive Scottish approach to capital developments'.

Distinctive approach or not, Scotland might still be following in Whitehall's footsteps. Arthur Midwinter, visiting professor at the Institute of Public Sector Accounting Research at Edinburgh University, points out that Whitehall departments are now required to produce separate infrastructure plans.

Midwinter believes the Scottish Executive is following the chancellor's initiative, introduced last year, requiring capital and revenue expenditure plans to be distinct. 'It is a reflection of the greater priority given to capital spending by the UK Treasury and the desire, because of years of perceived under-investment, to promote capital spending, which is regarded as a prerequisite of economic growth. To have the information in one document should also help increase transparency and accountability.'

The document, which puts the emphasis on public and private partnership planning, will be updated at regular intervals. It is seen as the key to economic growth, the Executive's top priority.

The document talks of the perception that over a 30-year period, long-term investment has been neglected. Capital investment in Scotland is due to grow by an unprecedented 5% in real terms each year from 2005 to 2008, resulting in infrastructure investment rising from £2.3bn to more than £3bn.

Although these figures are for a three-year period only – in line with the latest spending plans – the document covers plans for periods of up to ten years.

Examples include a £3bn investment in transport that will include new rail links to Glasgow and Edinburgh airports and new tramways for Edinburgh. A further £3bn is being allocated to meet the Executive's target of renewing and modernising 300 schools by 2009, mainly as a result of public-private partnerships. In health, three new major hospitals are scheduled in the central belt of Scotland. For housing, the transfer of local authority stock in council areas, including Glasgow, is expected to generate almost £2bn for investment in existing houses and new build.

Allan Hogarth, director of publicity for business lobby CBI in Scotland, says his organisation welcomes the more strategic approach to infrastructure investment.

But he adds: 'The real test of this initiative will be whether it first provides the financial support required to improve Scotland's infrastructure and, secondly, whether the planning system is going to be made more flexible to allow these infrastructure improvements to be brought forward more speedily.'

The infrastructure plan has the support of the Convention of Scottish Local Authorities. Its corporate adviser, Brenda Campbell, welcomes the fact that the information has been brought together in one document for the first time. 'We look forward to this being developed in the future with local government actively playing its role,' she says.

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