Wednesday, 17 November 2010

Budget Comment by Cabinet Secretary for Finance

This afternoon, I presented our Spending Plans and the Draft Scottish Budget 2011-12 to Parliament and to the people of Scotland.

As we know, it is a Budget set against the savage cuts imposed by the Tory government – a cut of £1.3 billion for Scotland. The Tory government, supported by the Liberal Democrats, is cutting spending too far, too fast, at a time when economic recovery – in Scotland and in the rest of the UK – remains fragile.

This UK cut is a prime example of why Scotland needs independence and full financial responsibility. We want our nation to be responsible not just for spending money but also for raising it. Academic research tells us that financial responsibility would increase Scotland's economic growth, raise revenues and half the size of any spending cuts. And the Budget sets out this powerful case.

Our Budget required hard choices. It is a serious Budget designed for jobs, economic growth and social justice. It confirms the sharp contrast between the experience and competence of the SNP Government and a Labour Party that offers an unrealistic wish-list of new policies that would see taxes rise by £3000 for each Scottish family.

Instead, our Budget is a balanced budget that puts in place the money to freeze the Council Tax again next year. That freeze helps families at a time of rising UK taxes, higher inflation and wage restraint. And the Budget protects the vital support for small businesses through the Small Business Bonus, protecting thousands of local jobs.

We offer a social contract with the people of Scotland, which means we are acting to create new economic opportunities, protect household income, support frontline services and improve our environment.

Key commitments include meeting our pledge to protect NHS spending by allocating an additional £280 million to the health budget in Scotland, honouring our commitment to pass on Barnett consequentials from the UK settlement. This will fund the running of NHS Scotland in 2011-12 with more money going to the frontline than ever before.

We have agreed a settlement for local government with COSLA’s leadership that reflects our joint determination to improve outcomes for the people of Scotland and local government’s key role in the economic recovery of our communities. This will mean:
  • maintaining the freeze in the council tax in 2011-12; 
  • keeping 1,000 additional police officers on our nation’s streets so that we can keep Scotland’s crime rate at its lowest level for 32 years;
  • meeting the needs of our most vulnerable and elderly through the NHS and councils working together to improve adult social care;
  • continuing to roll forward the Curriculum for Excellence to drive up standards of learning and teaching in Scotland’s schools and protecting teaching posts to ensure these are available for recently qualified teachers and to help reduce teacher unemployment.
We will continue to provide substantial support to our Higher and Further Education sector, recognising its central role in delivering economic growth. And we will invest in skills, including the introduction of 34,500 new training opportunities in 2011-12, while upholding our commitment not to introduce tuition fees.

In the face of a massive reduction in our capital budget by the UK Government, we are taking decisive action to boost capital spending next year and in subsequent years. We will transfer £100 million from this year to 2011-12 to supplement our capital budget. And in addition our Government will be providing an additional £2.5 billion programme of infrastructure development that will be delivered through the Non-Profit Distributing model to boost investment in our public works. This is an investment that will directly support and create jobs throughout Scotland and it is an approach of investment in our nation's people and infrastructure that stands in sharp contrast to the massive cuts in capital spending proposed by the Tory government in London.

Scotland, as a nation, has a proud contribution to make to meet global challenges. That is why we are continuing our world leading action on Climate Change with the Budget allowing us to develop further Scotland's vast offshore renewable energy resource, as part of our ambition to create tens of thousands of new jobs. And it is why we are protecting Scotland's International Development Budget, so we can continue to support some of the world's most vulnerable communities.

To allow us to protect investment and employment the SNP government will be delivering smaller and more efficient government and directing more to the frontline.

So even in areas where the budget falls, service levels are protected, for example in Higher Education which sees the number of student places maintained.

We are increasing our annual efficiency target to 3%, which will allow us to protect more local services. We are continuing to simplify the public bodies landscape and will be securing further savings from procurement.

And as part of our commitment to social justice, we are implementing a Living Wage of £7.15 per hour and providing a minimum annual increase of £250 for employees earning less than £21,000, while freezing pay for others and cutting the pay bill of the highest earners. We will reduce the Government’s Administration budget by 10 per cent and we will reduce the costs of the Senior Civil Service in Scotland by 10 per cent in
2011-12 and by 25 per cent over the next four years.

Taken together this is a Budget that will protect vital jobs across Scotland. It is a Budget that focuses spending more than ever before on the frontline – on the services that matter most to our families, friends, neighbours and communities.

There were difficult choices, and in the face of the swingeing Tory cuts, we believe we have made the right choices – choices that reflect the priorities of the people of Scotland.

As SNP members our job is now to take this message to the people as part of our efforts to secure SNP victory next May.

As this Budget confirms, the SNP is the only credible government for Scotland – a government that will continue to work hard to make Scotland better.


John Swinney MSP
Cabinet Secretary for Finance and Sustainable Growth
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