23 January 2009
By David Scott in Edinburgh
A leading economic think-tank set up by First Minister Alex Salmond is to examine options that would provide borrowing powers for the Scottish Government.
Following a meeting of the Council of Economic Advisers on January 16, chair Sir George Mathewson said the council would be undertaking further work to explore the options on borrowing.
He added: 'These are unprecedented economic times and there is a real need to provide suitable stimulus to the economy and to be sure government is maximising investment opportunities.
'The CEA's annual report suggested that Scotland consider securing borrowing powers. As a result, we will look at this critical lever and discuss it at our next meeting in May.'
A number of bodies, including CIPFA in Scotland, have called for an examination of the borrowing powers that are already available to local government to see whether they could be extended to the Scottish Government.
There has also been a demand to look at new ways of financing major capital projects in view of the economic climate and the problems experienced by the Scottish Government in setting up its Scottish Futures Trust.
Mathewson said the council would continue to focus on the value of extending borrowing opportunities and creating the most appropriate financial framework to ensure long-term affordability of investment.
The first minister, speaking as he published the Scottish Government's response to the CEA's first annual report, said borrowing powers alongside his administration's six-point economic recovery plan would help Scotland emerge stronger from the economic downturn.
Salmond said: 'With additional powers, the Scottish Government could do much more, which is why I warmly welcome the CEA recommendation on the case for additional financial responsibilities for the Scottish Parliament, specifically borrowing powers.'
PFjan2009
