Scottish budget’s toughest times are still to come, analysis shows

Published on 13/07/2012 00:00

The most difficult years of public spending cuts are still to come, according to an analysis of Scottish budgets.

The financial years 2015-16 and 2016-17, after the independence referendum, were identified in a report by the Centre for Public Policy for Regions as the most difficult for resources.

Centre director Richard Harris said: “The future public funding landscape in Scotland looks bleak.

“2015-16 and 2016-17 are shaping up to be two of the most difficult years for the resource budget, and by the latter year we will be in the seventh straight year of fiscal retrenchment.”

The centre looked at actual and projected spending between 2009-10 and 2016-17.

It studied the Scottish Departmental Expenditure Limit, which forms most of the annual budget, financed by the UK government.

Resource spending, which covers day-to-day expenditure, is expected to fall by 14 per cent, which is equivalent to £3.5 billion. The cut by the end of last year was about £0.8bn, less than 25 per cent of the total.

Capital spending, which is used for public infrastructure, is projected to fall by 48 per cent, or £2bn. So far, the cuts have amounted to £1.3bn, more than 66 per cent of the total.

The centre predicts that the final year, 2016-17, may not be the end of the squeeze on finances, suggesting there may be “additional fiscal tightening”.