'Money isn't there' to fund government policy pledges

SCOTLAND'S former top civil servant has warned that "the money isn't there" to fund costly government policy pledges. In a blunt assessment of the current spending crisis hitting the country's public services, Sir John Elvidge said "something had to give" as ministers prepare to meet costly promises with flatlining budgets and rocketing demand.

Addressing a conference in Edinburgh, he made the case for government reform, saying that often it was civil servants, not politicians, who were to blame for "jealously" clinging on to their budgets, rather than using money more effectively to achieve better outcomes.

Elvidge retired from his post as permanent secretary of the Scottish Government last year after seven years in charge. His comments come as SNP finance secretary John Swinney is preparing a major spending review this September that will lay out how the government's 28 billion-a-year budget is divided for the next three years.

The budget remains frozen for that period, amounting to a cut in real terms as inflation rises. Councils estimate that, by 2016, there will be a 2.5bn gap between their income and the funds they need to meet soaring costs in areas such as care for the elderly.

Elvidge was addressing a conference organised by Holyrood magazine entitled "Spending to Save", as he set out how public sector leaders needed to embark on a "culture shift" towards preventing social problems. Backers of such a policy shift say the government needs to spend more dealing with social problems at source, in the hope of reducing spending on areas such as care for the elderly, crime and unemployment.

Elvidge warned that, on current spending plans, the position of the Scottish Government was effectively unsustainable.

He said: "I think we can all see that the money isn't there to continue running the suite of non-preventative policies that we have. So something has got to give."

His comments come after both Labour and the SNP used the Holyrood campaign to back a continuation of costly spending plans, including a council tax freeze, a guarantee of no tuition fees, the continuation of free prescriptions, free personal care for the elderly and concessionary travel for the over 60s. Ministers say they also want to pursue a policy of no compulsory redundancies.

However, a government-commissioned report by former Scottish Enterprise chief executive Crawford Beveridge warned last year the government needed to consider reviewing such benefits, as well as trimming back the public sector workforce in order to square the financial circle.

Elvidge said that the Scottish Government was already doing well to ensure the public sector became more efficient and productive, praising efforts made under the SNP government to "deconstruct" the civil service.However, he said more needed to be done to ensure an "outcomes-based approach", under which government focuses its efforts on getting the right results, rather than on political targets. But, he said, it was officials, not politicians, who were most at fault.

He said: "It is too easy to blame the political environment for failure to make progress.

"Yes, of course, framing a political dialogue in terms of more teachers or more nurses or more this or more that is the antithesis of an outcomes based approach."

He added: "But the biggest challenge is us. We cling to organisational behaviours and to policy solutions… we are jealous of our budgets. We are jealous of our authority."

Focusing on central government, he added: "We have made important starts, but we have not faced up to the flaws in our own past thinking that will unlock this. Very few of us, when we seek to fix the problems of particular groups, start with what their strengths are, rather than the evidence of failure."

A Scottish Government spokesman said: "We agree with Sir John's assessment on the size of the challenge in the face of the massive 1.3 billion in Westminster government budget cuts this year."