THE Scottish Government’s huge £444m underspend is an absurd waste of resource and opportunity, writes Brian Wilson.
Forget 55.3 and 44.7. They are so last year. Instead, there are two numbers which now cry out for attention as key indicators of Scottish political credibility as we limber up for 2015.
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The first, of course, is 113. That was the number of dollars per barrel which the Scottish Government’s White Paper assured us was a “cautious” assumption of the average oil price between 2013 and 2018. Much more should be heard of that infamous fabrication.
But the extraordinary new number on the block is 444. That’s how many millions the Scottish Government underspent – repeat underspent – by in the last financial year. This from an outfit which constantly stokes grievance by claiming not to have enough money to do the wonderful things it wishes to do.
Everyone can draw up their list of what the 444 might have achieved. It could have negated the effects of the bedroom tax several times over. It could have employed thousands of nurses and specialists. Since a cool £165 million was from the education budget, resources could have poured into schools and colleges in areas of disadvantage. None of these things happened.
If you prefer, there’s a nice piece of financial symmetry available. There are 4,000 fewer teachers in Scotland since the Nationalists took over and, in breach of promise, class sizes are bigger not smaller. That £165m underspend on education was enough to employ 4,459 teachers, so they could have cancelled out their own handiwork and still had change left over.
Cautious accounting and carry-overs always lead to a degree of underspend at the end of a financial year. But, given the need to use the power of the public purse to counter the effects of austerity, this is a phenomenal figure to have been chalked up by an administration which bases so much of its case on the supposed parsimony of Westminster.
In 2008, the underspend was a mere £31m, which shows it can be done when the vested interest lies in addressing challenges rather than exploiting them for political gain.
At that time, John Swinney said: “Long gone are the days when hundreds of millions of pounds of government money would be underspent each year, doing nothing to help communities around the country.” Really?
The political significance of the 444 is that it undermines the two self-images that the SNP administration seeks to promote – competence and any great concern about addressing social inequality.
I wonder what their apologists on the left will make of the unopened biscuit tin, containing almost half a billion pounds. Surely “communities around the country” deserve better?
Having more money than they know what to do with is a rare problem for governments at any level. I’m sure Scotland’s councils could have nibbled happily at a slice of the underspend. But the largely unspoken truth is that, even in the current climate, Holyrood is very well funded and this is in no small measure due to the cumulative effects of the Barnett Formula.
So why would anyone want to get rid of it? In this of all weeks, a choice of Barnett versus North Sea oil revenues seems like a no-brainer. The former delivers so much money that the Scottish Government cannot spend it all while revenues from the North Sea have plummeted to around a quarter of what Alex Salmond was assuring the Scottish people of, just a few short months ago.
Yet, in an interview which carries the distinct whiff of being a hostage to fortune, this is exactly the basis on which Mr Salmond has committed the SNP to running its Westminster campaign. Like an old thespian who can’t quite bear to leave the stage, he seems a little too desperate for attention, and I suspect that Ms Sturgeon’s enforcers would already quite like to be in the wings with a hook to get him off.
The departed First Minister’s latest wheeze, in his imagined role as kingmaker following the general election, is to declare “home rule” as the price of his fealty. He has defined this as “everything except defence and foreign affairs”, with all tax revenues raised in Scotland staying here. In shorthand, this would mean swapping the Barnett Formula for the oil revenues.
The kind of fiscal autonomy which Mr Salmond demands would also mean Scottish taxes funding pensions and benefits. That is where John Swinney’s leaked paper to his ministerial colleagues remains such a crucial document. For Mr Swinney’s precise warning was that these costs might be unfundable if oil revenues fell – and they have of course since fallen by far more than anyone was envisaging at that time.
I am not privy to the SNP’s inner counsels so I do not know whether Mr Salmond’s pronunciamento about his House of Commons strategy was cleared with Ms Sturgeon (far less their leader at Westminster). Obviously, they all want independence for reasons which have little to do with the economy. But it is hard to see why, in the meantime, any responsible Scottish politician would want to reduce the Barnett Formula to the status of a bargaining chip.
By defining the SNP’s objectives in this way, Mr Salmond has handed a very useful weapon to his opponents. The general election is not about independence or even (according to himself) about the right to hold another referendum. But it is certainly about how the Scottish Parliament would be funded so that it can exercise the powers that it holds as well as those which are coming to it. Does it really make any sense in that context to propose the separation of tax revenues?
As ever, the general election will be primarily about who should form a government – not who might be in a position to prop up another party if a whole series of imponderables falls into place. It is grandiose nonsense to be talking now about the terms on which support would be offered – and this latest ruse will not impress many because it is so easily seen through.
The SNP’s objective is not “home rule” but the establishment of a separate state, which is perfectly honourable whether or not one thinks it desirable. All that Mr Salmond’s new brand of casuistry confirms is that they would, given the chance, cut a dreadful deal for Scotland in order to advance their actual objective. That’s not a great platform on which to fight.
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