City's crash diet may be worth a try, Mr Salmond

TWO recent developments, both involving our capital city, have left the Scottish Government's economic policies looking particularly at odds with reality – and worth challenging in the coming de-bate over the SNP's budget proposals.

First came the news, no doubt surprising to most douce and upright locals who pay their council tax on time, that Edinburgh City Council is to shed 700 jobs to try and get its runaway deficit of 90 million back under control.

In contrast to their country cousins in central government, the SNP councillors in the capital city's ruling Liberal Democrat/Nationalist coalition are prepared to shed jobs so that their overweight public body can fit their uncomfortable straitjacket.

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The irony that Edinburgh's overtight and ill-fitting suit was actually tailored by people of the same party is not lost on anyone in the City Chambers.

Faced with the same dilemma as Edinburgh but on a larger scale, namely an obese body corporate that needs to lose weight, the First Minister continues to parrot the line that spending restraints imposed by the UK treasury are the wrong policy for Scotland in a recession – and that cutting public sector jobs will only make the recession worse.

Just a few days after the news of job cuts in the capital – and still reeling from the shock that one part of Scotland's state leviathan is trimming its fingernails – we are being told, thanks to the Centre for Cities think tank, that Edinburgh is one of five cities that will help pull the UK (and presumably therefore Scotland) kicking and screaming out of its self-inflicted recession.

A study of 64 cities and major towns found that Edinburgh, Brighton, Milton Keynes, Reading and Cambridge were cities to watch.

How could it be that Edinburgh, the city that is shedding public sector jobs that Alex Salmond says are so vital to recovery, come out as one of the UK's economic saviours?

The answer is that Edinburgh has, despite its banking woes, a strong private sector, dynamic entrepreneurs and an educated workforce. The city's soft and large public sector underbelly does not get a mention. This should not come as a surprise.

How we have laughed at Gordon Brown's claim that the UK was best placed to endure and come out of the global downturn easier and quicker than the rest of the world. Such is the scale and reach of the state apparatus that he has created, funded from a terrain of high taxes and mountainous debt, that the UK will be one of the last to recover.

It follows that as the part of the UK burdened with the heaviest public sector and infested with the greatest amount of its controls and regulations (commonly accepted as adding at least 10 per cent to business costs compared with operating in the rest of the UK) Scotland will be the slowest to come out of the UK's economic trough of despond.

So why not start to reduce that burden as a matter of policy rather than be forced to do so because of the failing public finances?

And yet First Minister Alex Salmond is apt to lecture us all that in our recession the last thing that Scotland should contemplate is reducing its spending and cutting back on the size of government.

When one puts this together with the indisputable fact that in the first eight years of the Scottish parliament, when the SNP was the lead opposition party, that it repeatedly criticised the Lib-Lab Scottish Executive for not spending enough public funds on this project or that initiative, we can see that in good times or bad, Alex Salmond believes in big government at big expense.

The suggestion that, thanks to the axis of Jim Mather, Alex Neil and Mike Russell, the SNP is pro-business and would support a more dynamic economy built on lower taxes now looks less than an urban myth and more a complete and utter deceit perpetrated on an all-too-gullible Scottish business community.

It may be a taboo at Holyrood but someone needs to tell Alex Salmond that, economically speaking, oranges are not the only fruit.

Examples of alternative polices do exist where councils are reducing the size of government and are reducing the burden on people by cutting their taxes – without public services collapsing, as the doom merchants always predict.

Look south and you will find that Windsor and Maidenhead has just announced a cut in its council tax for next year of 4.0 per cent, saving 41 on a band D council tax bill compared with 2009-10. This is the largest council tax cut on record and compares with an average increase of 2.5 to 3 per cent across England.

This is no isolated case, as other English councils demonstrate that there is no correlation between high council taxes and good public services. Hammersmith and Fulham Council is cutting its council tax by 3 per cent for an impressive fourth year running, while Calderdale Council in West Yorkshire is recommending a 1 per cent cut.

It is not as if all local or central government jobs are crucial to the maintenance of vital public services. With great timing the Taxpayers Alliance has just awarded Aberdeen City Council the non-job of the week award for a development officer costing nearly 30,000 who should possess "experience of working in a developmental role, of promoting customer or citizen engagement and an understanding of the corporate goals" and would have "presentational, facilitation and communication skills, ability to produce clear reports for a broad range of audiences and to work with diverse community interests and to promote equal opportunities".

In other words, a council flunky to soft-soap the public at its own expense.

The question is often asked, should public spending be directed towards a city like Edinburgh that might see growth expand or towards a city such as Dundee which might suffer contraction? In the case of capital investment for infrastructure it is a worthwhile debate to have, but under the weight of a 35.5 billion budget it is surely better to ask: how can everyone's overheads be reduced?

Many of us look forward to the day when all politicians adopt a healthier, leaner diet full-time rather than the crash diet that Edinburgh is trying; but the Edinburgh diet is a start and Alex Salmond could benefit from trying it.

• Brian Monteith is policy director of ThinkScotland.org