THE financial powers of independence are needed to “transform” childcare in Scotland, according to a Scottish Government report.
SNP plans under independence would provide 1,140 annual care hours, for one- to four-year-olds, allowing more parents to return to work.
The government analysis said increasing female labour market activity rates by 6 per cent would increase output by £2.2 billion and tax revenues by £700 million.
Increased revenues, coupled with a fall in welfare spending with more people in work, would allow further expansion of childcare under independence, the economic report said.
Under the current system a 1 per cent rise in money raised by corporation tax, National Insurance, VAT and income tax, and a 1 per cent saving in benefits would boost revenue by £350m, but only around £45m of this would accrue directly to the Scottish Government, according to the analysis.
Finance Secretary John Swinney said: “This paper lays bare the need for control of the major tax revenues if Scotland is to have the transformation in childcare we need.
“Without it, we can do everything possible and stretch every financial sinew, but the reality is that a wholesale transformation to match the best in Europe only comes with independence.
“Increasing the number of people in work moves people out of welfare and into paying tax. That generates the extra government revenues we need to pay for the transformation of childcare.
“The paper reveals, however, the stark reality of devolution. Even with the new powers coming to Holyrood under the Scotland Act, the vast bulk of any increased revenues goes directly to Westminster.
“And, given the Chancellor is boasting of £25bn of cuts to come, no one believes that he plans to make such revenues available to Scotland. The only way to access them is with independence.”
When the government laid out its childcare plan in the White Paper, Scottish Labour leader Johann Lamont called on First Minister Alex Salmond to “put his money where his mouth is and make a difference right now”.
Mr Swinney said: “We are taking action now to make the greatest impact within the constrained powers and resources available to us, to support families in the face of Westminster austerity cuts.
“In eight months we will be delivering even more free childcare for all three and four year olds and the most vulnerable two-year-olds – accelerating our expansion of entitlement to reach more than a quarter of all two-year-olds by 2015.
“These commitments are well-planned for delivery, backed up by our investment in the early years workforce, including £3.5m announced this week to support an additional 2,000 childcare workers. This government has a strong record of delivering, strong and sustainable investment in services – in spite of, rather than thanks to, Westminster’s cuts.
“Our ambition is to do much more. We want to see a universal system of early learning and childcare for children from the age of one to when they start school, benefiting around some 212,000 families. That ambition starts in the first Parliament of independence with a move to more than 1,100 hours of childcare vulnerable two year olds, and three and four year olds - the same number of hours as children spend in primary school.”