'A bad day for the public, a good day for criminals': Public services to be slashed across Scotland

1 June 2022, 00:04

Scotland's finance minister Kate Forbes
Scotland's finance minister Kate Forbes. Picture: Alamy

By Gina Davidson

Public services are set to be slashed across Scotland as a new financial review predicts a £1.1bn reduction in government spending over the next four years - with council staff and police officers bearing the brunt of the "brutal" cuts.

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The review - which lays out how the Scottish Government intends to spend £180bn over the rest of the parliamentary term - includes £22.9bn for social security, protecting the Scottish Child Payment rises, and £73.1bn for health and social care, including developing a National Care Service.

However, spending in justice and local government will be frozen – equating to real terms cuts - with the move described by the Scottish Police Federation as "absolutely brutal for police and wider justice funding".

On Twitter, General Secretary of the SPF, Calum Steele, said: "Flat cash for police, prisons, legal aid, the judiciary, and courts & tribunals. Police numbers will now inevitably plummet.

"A bad day for the public, a good one for criminals."

The review also said the government would reduce the size of the public sector to pre-pandemic levels, while selling off buildings - something the Federation of Small Businesses Scotland said could "cast a long shadow."

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Andrew McRae, the organisation's policy officer, said: "Shutting down local public sector buildings might save money on paper, but it risks undermining collective efforts to turn town centres around.

"On the other hand, clever reforms could help both the public purse and local economies. Smarter procurement systems could see more independent businesses winning more work while reducing waste."

According to David Phillips, Associate Director of the Institute for Fiscal Studies, the review gave "a clear indication of the areas prioritised by the Scottish Government - and the services that on current funding plans at least will be cut back as a result.

"The axe is set to fall on a wide range of public service areas. Budgets for local government, the police, justice, universities, rural affairs are due to fall by around 8% in real-terms over the next four years - that's £1.1bn.

"Spending on enterprise, tourism and trade promotion is set to fall even further - by 16% in real terms, over the same period.

"The relative winners are health, some smaller service areas, and above all social security spending."

But he warned that the 2.6% real-terms increase in health spending over the next four years would still be "slower than is needed to meet rising costs and demands" and services could still "struggle".

He added: "Social security spending is forecast to increase by a much more substantial 48% as new, more generous, Scottish benefits replace UK-wide benefits.

"But big increases in social security spending and a relatively poor income tax performance also make the challenges more difficult, and that’s despite the Scottish Government implicitly assuming a further rise in income tax relative to the rest of the UK."

Also included in the review was £20m set aside for a second independence referendum as pledged by Nicola Sturgeon to be held by the end of 2023 - sparking accusations that the government was more focused on the constitution than the economy.

Scottish Labour's finance spokesman Daniel Johnson said: “They are slashing support for economic development as our economy falls off a cliff and wasting £20 million on a divisive referendum while cutting local services to the bone.

“Their economic mismanagement has led to Scots' wages growing more slowly than the rest of the UK, making this cost of living crisis all the more painful and draining money from public coffers."

Addressing MSPs in Holyrood, Kate Forbes said the review of spending was in the context of exiting the coronavirus pandemic, the Russian invasion of Ukraine, and rising inflation.

"Rising energy prices and constrained supply chains have affected countries worldwide. While inflation is also impacting other countries, it is not impacting them equally," she said.

"The UK currently has the highest inflation of any G7 country– almost twice the rate of France. Brexit has made this problem worse, with increases in food prices, hitting the poorest hardest. We are experiencing an unprecedented cost of living crisis. Inflation is at a 40-year high of 9 per cent with households facing considerable hardship.

"Today’s Resource Spending Review is not a Budget. However, it is essential to share high-level financial parameters with public bodies, local government and the third sector, so we can plan ahead together.

"Today I set out an ambitious but realistic public spending framework for the years ahead. It does not ignore the realities of our financial position, but neither does it roll back on our ambitions for change."

The difficulties she laid out were supported by Dame Susan Rice, chair of the independent Scottish Fiscal Commission, who, said these were reflected in the 8% fall in funding available by 2025/26 "for areas other than health and social security after adjusting for inflation."

She added: "Scotland continues to be affected by challenging economic circumstances and uncertainty.

"Rising inflation means earnings aren’t keeping pace with the cost of living. We expect inflation pressures to last into the middle of next year, with a return to positive real earnings growth in 2023/24.”

Scottish Conservative finance spokeswoman Liz Smith said the review was "proof of SNP mismanagement".

“The world economy is facing extraordinary pressures, but the financial shortfall that has been forecast comes despite the SNP receiving record funding from Westminster, this year.

“The gaping hole between projected public spending and tax revenues in the next few years is the product of staggering incompetence from an SNP Government that has no idea how to manage public finances – the ferries fiasco being just one example.

“With hard-pressed families here in Scotland struggling to make ends meet, the SNP must urgently get on top of our economic decline.

“They must commit to bringing Scottish income tax levels back on a par with the UK, so that Scotland is no longer the highest taxed part of the country.

"They must address the ever-growing skills gap that is stifling our productivity.

"And they must take an economically devastating independence referendum off the table, to finally prioritise Scotland’s economic growth."

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