Leader: Time for politicians to rise to the Beveridge challenge

Published on Thursday 29 July 2010 15:10

CRAWFORD Beveridge has done a great service to Scotland in producing the independent budget review report, published yesterday. It is a thorough, comprehensive and sobering study of the difficult public spending choices facing the Scotland in the next four years.

The effect of the report can be likened to pouring a large bucket of cold water over a drunk to sober him up. Scotland has over-indulged financially in the first decade of devolution and the country is waking up with a hammering fiscal hang-over.

Introducing his report Mr Beveridge identified a fundamental truth: because of the spending constraints the Scottish government faces, we must now decide what kind of Scotland we wish to build for the future.

It was a wise observation from one of the three wise men on the review group. for Mr Crawford was trying to encourage the nation to move beyond political point-scoring towards a more mature political discourse about the future.

Sadly, within hours of his ambitious, not to say optimistic, pronunciation the main political parties reverted to type, seeking to blame each other for the cuts to come as they positioned themselves for next year's Holyrood elections.

The SNP led Holyrood's "it wisnae me" chorus, claiming the Beveridge report exposed the true scale of the cuts which have resulted from Labour's mismanagement of the UK economy and the Tory and Lib Dems coalition's desire to cut too quickly. Labour was more pathetically predictable, arguing that Scotland faced "a perfect storm" of Tory cuts on top of three years of SNP cuts to come.

The Lib Dems were a little more positive, but still demanded budget details from the Holyrood government, knowing it was a request that cannot yet be met. The Tories said, in effect, "we told you so, we should have been making cuts earlier", a valid response but rather too self-satisfied tone.

If this is the level of the debate, the chances of our political classes answering the apposite question Mr Beveridge posed them would be nil but beneath the party political posturing there were some signs of hope.

Finance secretary John Swinney invited the three main opposition parties to talks on options to deal with the 12.5 per cent drop in Scotland's budget in real terms which the report identifies. mr Swinney may have been trying to spread the responsibility for difficult decision, but it is an offer the other parties should accept. However, in his response to Beveridge, Mr Swinney also made a serious error.

He promised to ring-fence health spending, as the UK government has done, and to protect free personal care and public transport concessions for the elderly. In doing so he was not demonstrating the leadership that government demands but operating as a party politician. By making these promises the finance secretary immediately narrowed the scope for debate — as other parties will almost certainly match his pledge — and undermined Mr Beveridge's plea for politicians to show restraint to allow for serious consideration of the issues. Health is vitally important, of course, but can it be completely immune from the process of making savings? No, is the obvious answer.

As over health, the report proposed a wide range of possible cuts which Scotland, as a nation, must discuss rationally with the objective of building an economy in which there is a healthier balance between the public and the private sector, something this newspaper has long argued for.

So, difficult as it may be, up to 60,000 public sector jobs may have to go. A pay freeze may have to accompany that. Like it or not, the country also cannot sustain the pension burden imposed by the current public sector agreements with employees.

Scottish Water could easily exist as a separate entity, mutualised or even privatised, and no longer be a drain on the public purse. New ways of funding universities will have to be found, in which students make a greater contribution to paying for their higher eduction.

The idea that everyone, no matter what their income, should be entitled to free or cheap benefits will have to end. Given the country's demogtraphics, free personal is simply not sustainable.

For the longer term, along with greater efficiency in spending money, there is huge scope to reform the structure of the public sector with, as the report says, 32 councils, 23 NHS bodies, eight police forces, 20 universities, 43 colleges and more than 100 other public bodies.

There is, to adapt the words of a song much loved by the Left, a rough wind blowing through the Great Glen of Scotland's public realm. That this has to be tackled is beyond question. What remains in doubt is whether our politicians can rise to the challenge ahead. On the evidence so far, it is not clear they will. For the sake of the nation, they must do so.