Smith Commission ‘should have reformed borrowing powers’

24 Feb 15
CIPFA Scotland will tell MSPs later this week that the Smith Commission’s post-referendum plans to extend devolution were wrong to leave the Scottish Parliament’s new borrowing powers unchanged from the regime proposed in the 2012 Scotland Act.

By Keith Aitken in Edinburgh | 24 February 2014

CIPFA Scotland will tell MSPs later this week that the Smith Commission’s post-referendum plans to extend devolution were wrong to leave the Scottish Parliament’s new borrowing powers unchanged from the regime proposed in the 2012 Scotland Act.

A paper for the Holyrood committee examining the Smith proposals will say that enhanced borrowing powers create an opportunity to give the Scottish people a fuller account of national public finances, provided they are exercised under a ‘framework of affordability, sustainability and prudence’.

Though CIPFA acknowledges that there is a cost to borrowing – estimated at £288m within 11 years if Holyrood uses its Scotland Act powers to the full – it says that the Scottish Parliament ought to be allowed to set its own borrowing limits within the prudential powers.                 

‘CIPFA advocates a prudential approach which will provide more flexibility for the Scottish Government to set its own affordable limits within the prudential parameters,’ the paper will say.

‘This would be consistent with the overall UK fiscal framework as it currently operates across all UK local government.’

 

 

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