Labour plan public sector shake-up

• Gray addressed the Scottish Labour conference in Oban yeseterday Picture: PA

Scotland's eight police forces will be merged to create a Scottish national police force. The same will happen to the country's eight fire services.

Gray also plans to strip councils of powers over elderly care, giving control to a new Scottish care service, whose job will be to manage care for pensioners whether in hospital, at home, or in care.

In a policy-rich speech setting out his vision for government, Gray also announced he would hire 1,000 more teachers to help children who cannot read or count, and guarantee an apprenticeship post for anyone who wanted it.

Labour claimed that many of the new policies were either cost neutral or relatively inexpensive, but opponents challenged Gray to explain how he plans to pay for his platform.

The Scottish Government's budget is to be cut by 1.2 billion from next April, as the UK government cuts spending to reduce the country's deficit.

Gray has said he would consider council tax increases of up to 2 per cent and that public sector workers would face a pay freeze, to cope with the reductions in spending.

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Speaking to delegates in Oban, Gray took on claims from the SNP that, compared with Alex Salmond, he lacks the leadership skills to run the country. Rolling out his plans for public sector reform, Gray accused Salmond of a "timid" response, adding: "He called me the invisible man.

But Scotland sees right through you, Alex Salmond."

He claimed independence would cut Scotland off from its main trading partner, and would have led to the collapse of Scotland's banks. "I love my country too much to be a Nationalist," he added.

In the central policy section of the speech, he said: "I believe that the time has come for a Scottish national police force, but with strengthened local accountability for local policing. We can save headquarter costs and protect front-line services." Gray said later he intended the reform to take place within the next parliament.

He went on: "Scotland has 22 health boards. That is too many. They all have their own IT systems. That is daft." Gray said mergers would begin with the country's eight "specialist" boards such as NHS 24, the Scottish Ambulance Service and NHS Quality Improvement Scotland, before moving on to regional boards. The changes would again be accomplished within the next parliament.

Other policies he would introduce included a "living wage" of 7.15 an hour, which he claims will cost 20 million a year and would apply to all public sector workers.

Labour will also offer to employ 1,000 of the 2,900 qualified teachers in Scotland without a job. They will be given jobs offering one-to-one tuition to children struggling with literacy and numeracy, a policy which, Labour claims, will cost a further 30m a year.

He also said that every school leaver would be guaranteed an apprenticeship place if they wanted one. The offer would be open to pupils who have taken their standard grades.

Labour says it will also reduce the waiting time for cancer patients, from a month to two weeks from referral to the time they get results from a specialist.

For elderly people, Gray said he wanted to see an end to people only seeing carers for 15 minutes, saying such a time limit was "not care, it is contempt".

Gray's plans received a mixed response from council chiefs last night who said that proposals to take away control of elderly care from them and give it to a new body were unnecessary and would cause concern among pensioners who valued local authority care.

Meanwhile, the SNP's campaign chief Angus Robertson claimed Gray's plans would be unaffordable without a huge increase in tax. He said: "There may well be merit in some of Labour's ideas, but in these tight financial times it is irresponsible to put them forward without clear ideas on how to pay for them."

Gray also used his speech to argue that there "is always room for fairness" despite cutbacks. In a thinly-veiled criticism of the Blair years, he said that "our politics were never built on the profits of banks in the easy times. Ours is a cause steeled in the force of community and solidarity when times are hard".

He said the incoming Scottish Government had to "deal with the consequences" of budget cuts and promised to "be honest with the people of Scotland". He said that while a Labour Scottish Government could not "avoid" the cuts, "we can protect the most vital of services our communities rely on".