13 March 2009
By David Scott
The Scottish Parliament finance committee is to investigate the impact of the recession on Scotland’s spending plans.
The MSPs will seek views on the effects of the recession on Scottish public bodies, the pressures on budget plans and the longer-term prospects for Scottish Government spending.
Announcing the inquiry, committee convener Andrew Welsh said the effects of the recession were not predicted in the 2007 Scottish budget spending review, when the budget for 2010/11 was set out.
He added: ‘Several decisions since then, including bringing forward capital spending into earlier years and the effects of £5bn efficiency savings announced by the UK government, could mean the budget for 2010/11 will be very different from the budget as already planned.’
Welsh said increased demand for certain services and reduced income opportunities would affect some bodies more than others.
‘All of them, however, are expected to face tough choices in the near future as public expenditure tightens,’ he said.
Welsh said the committee would welcome views on the future course of public spending in Scotland.
The move came as the Scottish Government, business leaders and trade unions met in Glasgow on March 11 to co-ordinate the response to the recession.
First Minister Alex Salmond and Scottish Secretary Jim Murphy met leaders of CBI Scotland and the Scottish Trade Union Congress.
Economists at Strathclyde University’s Fraser of Allander Institute have forecast that 159,000 jobs could be lost in Scotland over the three-year course of the recession, and predicted a 2.6% contraction in the Scottish economy this year.
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