Martin Hannan: Lean times ahead or we are stuffed

Published on Tuesday 9 March 2010 09:16

IN THE months and immediate years to come, Scotland and Edinburgh in particular will feel the effects of public spending cuts of biblical proportions. I use that phrase advisedly. For just as Joseph predicted in the book of Genesis, the "years of plenty" are inevitably followed by the "years of famine".

It takes time for a recession to work its way into public budgets, but the whirlwind is being reaped. The 41 million worth of cuts already announced by Edinburgh Council is just the tip of the iceberg. This city faces an assault on the public sector as never before.

Looming cuts in the civil service and the inevitable retrenchment in the NHS will cause pain to Edinburgh's economy and serious distress to a great many people.

That's even before we calculate the damage that will be done to the "third sector", those organisations and charities which depend on public money to employ people whose jobs are mostly relevant and necessary to the city's wellbeing.

Our various festivals and all the other circuses that were given bread by the council and the Government face very lean years. The knock-on effects on many areas of the local economy such as pubs and restaurants are already being felt, and it will get much worse.

For no matter who is in charge of Fawlty Towers (aka the City Chambers) or Holyrood over the next two to three years, the arithmetic already dictates that budgets must be slashed. Even with a council tax increase of mammoth proportions, which all the major parties oppose in any case, the council will be hamstrung. Those in charge will be banned from borrowing money so will have no option but to bring about an Armageddon in our services with staff reductions hopefully achieved by natural wastage and voluntary redundancies.

The same will go for the civil service. Thousands of its union members are on strike today to oppose the Government's plan to change the generous Civil Service Compensation Scheme and make it a little more like redundancy schemes in the private sector. Whether they are right or wrong to strike I do not really know, but the unions said that they have no choice about striking as ministers refused to meet them to discuss the issues – if that is the case then those ministers should resign forthwith.

Nevertheless, I must tell the union leaders this – there is virtually nil public sympathy for your cause, which is seen as fat cats feather-bedding themselves. That's not my view – it is what you hear when you talk to ordinary people.

That brings me to something else I am really worried about – the right-wing English media will trumpet the cause of slimming down the public sector as some sort of crusade against big-spending officials with copper-bottomed pensions. Hard-working and poorly paid public servants will thus come under demoralising attack while the guilty people – the politicians – will hide from blame as usual.

It is not the fault of those who empty our bins or teach our children that for a decade or more, public spending has risen in what we now know was a madcap manner. It was politicians who did that. Serious people – some of them may even be politicians – will now have to deal with downsizing the public sector in a city and a country that depends on it.

I cannot say what will happen at Holyrood. Everything will depend on the result of the general election, when I predict David Cameron's Conservatives to win with a tiny overall majority or even form a minority government with support from the likes of the Ulster Unionists. It will make for interesting times constitutionally if that happens and my party, the SNP, is still in power in Holyrood, but in the meantime, let's try some lateral thinking.

Due to the election, we cannot know what will happen to the civil service and NHS in Scotland, but the Scottish Government can do one thing to slim down the public sector – hammer this nation's quango culture by making them no longer quangos.

Some should be scrapped while others like the National Library, National Museums and National Galleries should be merged under direct (and cheaper!) ministerial control. The likes of the new Creative Scotland, sportscotland and VisitScotland should be privatised with a subsidy at a fixed level for five years. It would then be up to their managers to raise money by other means if they wish to expand. It would make them less accountable, of course, but then most quangos are a law unto themselves anyway.

As for the city council, there are obvious tactics to try. Just as happened in Camden and elsewhere down south when their bubbles burst, the council should continue the asset sales which are already under way, and increase them to bring in money to tide it over the bad times ahead. And by assets, I mean everything – land, buildings, works of art, and Lothian Buses. We should also bring in a tourist tax – no better time to do it, as the US has just passed a Travel Promotion Act bringing in a national tourist tax, so our American visitors could not complain.

Make no mistake, the public sector in Edinburgh and Scotland is going to be savaged. It is time for fresh ideas to lessen the pain.