Welcome scrutiny

Published on 08/10/2012 00:00

We SHOULD welcome former Auditor General Robert Black’s initiative (“Facing up to the fiscal challenge”, 
5 October), which Scottish Labour leader Johann Lamont interprets as questioning universality in public spending, not to mention charging.

Mr Black highlights the backlog across a variety of services and the prospects decades ahead, while Ms Lamont is more concerned about reclaiming ground lost to the SNP – being prepared to dump basic Labour principles the process. However, her attempt to attach blame to the SNP is misplaced because Labour initiated most of the agenda she now wishes to dismantle.

Mr Black states that, with budget rises of 5 per cent in real terms, “the first decade of devolution was the most benign period for the public finances in living memory”. A better description would be “the most toxic”. 

For the devolved services, our funding is based on the Barnett consequences of any bids made by England for its services, without regard to Scotland’s needs. The block grant provides about 80 per cent of Holyrood’s funding, and it nearly sustained the 20 per cent per head lead we had over England prior to devolution. That is predicated upon affordability as determined by the UK Treasury.

More than 100 stealth taxes, and the credit-driven boom in GDP funding increased high street sales and additional tax revenue for the Treasury, meant there was plenty of money to fund our 5 per cent, real-terms spending increases. Furthermore, for Scotland, from 2003 we had an £800 million a year windfall from the 1 per cent hike in National Insurance contributions for employers and employees (£8bn in total for the UK) to fund reforms in the English NHS that we were not doing. 

On top of that, over the eight years of the Liberal/Labour coalition (which coincided with a period, mainly, when Mr Black and Ms Lamont were in post) council tax rose by 61 per cent when inflation was allegedly low. And don’t forget the exponential increase in borrowing: Labour’s £30bn per year had accumulated to a £178bn public spending deficit by the start of the 2010 UK election campaign, and Labour bears sole responsibility for that and the financial mess it got us in and the consequential cuts being wrestled with currently.

So, if we had all that money at our disposal, how was it spent if it was not on avoiding a backlog in infrastructure repairs and other preventive measures?

Is it possible that the 
Labour-led regime at Holyrood was more intent in buying votes with its 100,000 increase in staff in the public sector? Surely that number of extra jobs could not be justified in terms of any needs assessment. But it would bring unemployment down.

But there are questions for Mr Black: were his audit teams satisfied that the 100,000 increase complied with complete propriety in the use of taxpayers’ money and, in particular, in the disposal of the £800m NIC windfall? Because it is disingenuous to talk about universal unaffordability if there has been widespread profligacy. The perspective is that, if these posts are funded by the £30bn annual UK borrowing, then they would all have to go to stop the £3bn Scottish component. Only then could the accumulated deficit be dealt with.

Douglas R Mayer 

Thomson Crescent 

Currie, Midlothian