Why Labour must set a high bar for how SNP spend extra £3.4 billion

The most creative challenge for any Minister is not to spend more money but to spend it better. I learned this in the early days of the 1997 Labour government when there was a strict mantra of staying within the spending limits we inherited from the Tories.

The answer was not to throw up hands in despair or, since this was prior to devolution, to stamp feet and demand more. It was to delve deep and look for ways in which desirable outcomes and initiatives could be achieved through the judicious use or reallocation of available funds.

That period also taught me that government can do a lot of good things with relatively small sums and none should be beneath the dignity of a Minister to consider. There are precious few current signs of this mentality. Success is measured by how many millions can be boasted of with outcomes a poor second.

After a while, the fix of grand announcements becomes an end in itself, too addictive to resist even when the money has run out. Just keep announcing or, as a variation, pursue doomed projects, deaf to words of caution, with fiscal reality subordinated to picking fights and reckless risk-taking. Think Deposit Return Scheme et al.

While this mindset is by no means confined to Edinburgh, it has long been the modus operandi of the Scottish government. The capacity to squander money is endless. I weep, for example, to see the three-quarters of a billion obtained as a one-off windfall from ScotWind leases being consigned to a bottomless pit with nothing of substance to show for it.

Don’t take my word for this. Some of it has just been laid bare in a report by the cross-party Finance and Public Administration Committee at Holyrood, chaired by an SNP MSP, Kenneth Gibson. This rare example of a Holyrood committee acting as a genuine watchdog can only be welcomed. It has taken long enough.

Having slipped the leash, the MSPs did not hold back. “The Committee is deeply concerned about the Scottish Government’s lack of strategic approach to managing Scotland’s public finances”, they declared. “There is little evidence that medium- and long-term financial planning is taking place, and year-on-year budgeting has also become challenging, with significant emergency controls required in each of the last three years”.

Far from being bolts from the blue, the Committee confirmed, factors which have now led to “emergency” cuts could and should have been foreseen – including the cost of the latest council tax freeze and increased social security payments. Spending money is the easy bit; paying for it, without compensatory savings, is a fool’s paradise.

When it came into office in July, the Labour government did not have the 1997-style luxury of living within parameters of existing spending commitments since many of these were themselves unfunded – i.e. the famous black hole. Out of somewhere, however, the Budget conjured up an extra £3.4 billion for the Scottish Government to spend next year. The question now is what they will do with it?

Have they learned anything about “medium- or long-term planning” taking precedence over an assumed right to do as they please, then complain about not being given enough by “Westminster”? I doubt it. They seem to be digging the same holes which have left Scotland’s public services on life support without significant impacts on poverty gaps, educational attainment or NHS waiting lists. Where indeed does the money go?

University tuition fees are a case in point. I saw one Scottish Government Minister, Mairi Macallan, had tweeted about how she and her friends were able to go to university “after the SNP defeated Labour and abolished all tuition fees in Scotland”. Do these people really believe that nobody from modest backgrounds went to university before the SNP descended as messiahs?

“Universalism” is one of the biggest political con tricks of our age. Far more students from disadvantaged backgrounds could benefit at significantly less overall cost if support was focused where it is needed, rather than applied indiscriminately, and Scottish universities would not be grossly over-dependent on overseas student fees. Any plans to change that?

Anyway, if the objective is to close attainment gaps, then pour every available penny into Early Intervention and see how it works out after 20 years. Until the roots of disadvantage are attacked, nothing much changes. But that requires “medium- or long-term planning” rather than silly tweets from Ministers who do not understand the implications of their own policies.

In the meantime, universalism means subsidies for those who don’t need, as well as those who do. It is regressive. The same applies to council tax freezes which have done so much damage to services on which the poor depend disproportionately. Those who pay little or no council tax hardly noticed the difference while the best-off gained handsomely.

The Convention of Scottish Local Authorities has, understandably, staked its claim to “our fair share of the additional funds announced in the UK Budget”. The NHS needs every penny (which it hasn’t always received) from these extra Barnett consequentials - £789 million in the current year and £1.72 billion next year. Social housing desperately needs money restored, so the queue is forming.

John Swinney, who has been at the heart of everything the Committee criticised, told the Labour leader at First Minister’s Questions: “If Mr Sarwar wants the (additional) money to be spent, he should vote for the (Scottish) budget”. But this is sheer arrogance – just sign the cheque and, despite everything that’s gone before, we’ll decide how to spend it.

Labour, or any other party, should set the bar much higher than that. On past form and left to their own devices, Mr Swinney and his friends are more than capable of getting through £3.4 billion without anyone noticing the difference.