DCSIMG

Let the building begin with £330m boost for Scotland

George Osborne and Danny Alexander make their way to parliament

George Osborne and Danny Alexander make their way to parliament

  • by TOM PETERKIN
 

SCOTLAND will benefit from an extra £331 million to be spent on construction projects as a result of the Chancellor’s Autumn Statement, it emerged yesterday.

The cash is to be given to the Scottish Government’s budgets for 2013-14 and 2014-15, and 
follows repeated pleas from 
the SNP administration for 
more money to be spent on shovel-ready projects.

Announcing the boost, the Scottish Secretary Michael Moore said the money would help get Scotland’s economy moving. He added: “There is a good deal of specific, positive news for Scotland. The Scottish Government will receive more than £300m of new money, in addition to the £1 billion it has already received since the spending review, all of which it can invest in shovel-ready projects.”

The extra investment comes from £394m that is due to Scotland as a result of the Barnett formula, the complex mechanism that determines how much Treasury money goes north of the Border. The £394m represents Barnett share of the cash for capital projects such a new schools and hospitals that are being built south of the Border by departments looking after portfolios that, in Scotland, are the responsibility of Holyrood.

Accompanying the £394m is extra resource cash of £90m as a result of Barnett – making a total of £484m. But the £484m figure is then reduced by around £154m – a reduction that arises from the Chancellor’s plans to shave £5bn from Whitehall budgets.

John Swinney, the SNP 
finance secretary, gave a guarded welcome to the increase in capital spending, which should help the Scottish Government get on with its list of 33 shovel-ready projects. The list includes a £119m masterplan for the Port of Leith, a £60m development of the Clyde Gateway, £34m on road maintenance and £40m worth of economic development projects led by Scottish Enterprise.

But he said Mr Osborne lacked a coherent plan and said more could be done: “After two and a half years in office, the Chancellor has finally heeded Scotland’s calls to boost capital spending.

“The steps he has taken are welcome, but they only take us halfway towards common sense in terms of investment and there is still a lack of a coherent plan to return the economy to growth. I will confirm shortly how we will allocate this funding for the coming year.”

The finance secretary also welcomed the Chancellor’s decision to scrap the fuel duty increase, originally planned for next month, and investment for superfast broadband in Perth and Aberdeen.

But he added: “However, this allocation of funding is only recovering some of the ground from the unprecedented cuts already imposed on Scotland over the past few years which have seen our budget cut by 33 per cent in real terms. These latest announcements show that the cut in our capital budget is now 25.9 per cent.”

Mr Swinney’s opponents at Holyrood called on him to take action. Concern has been expressed about the dramatic reduction the Scottish Government’s own estimates of how much will be spent on capital projects under its own 
Non-Profit Distribution model of financing construction.

Moving to other aspects of the budget, Mr Moore said raising the personal allowance to £9,440 before people pay income tax would help 2.2 million people in Scotland and take 21,000 
low-paid Scots out of income tax entirely from next April.

Cancelling the fuel duty rise planned for January 2013 would help the owners of the 2.7 million motor vehicles in Scotland, saving the typical driver £40 a year and a haulier £1,200 a year.

He added that one million Scottish pensioners would benefit from the £2.70 a week 
increase from April 2013

Scotland’s 319,000 small and medium enterprises would 
benefit from the increase in the annual investment allowance from £25,000 to £250,000 for two years.

Mr Moore said: “The Autumn Statement makes clear we are on the right track in terms of borrowing and deficit reduction.”

 

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