Forget the blame game, SNP must now plan for leaner times coming

THE Holyrood exchanges between Alex Salmond, the First Minister, and Iain Gray, the Labour leader, were particularly heated yesterday as the pair traded claim and counter claim over the effects on Scotland of Wednesday's Budget.

Mr Salmond claimed that Holyrood would next year suffer a 1.3 per cent cut in its budget and said that, thanks to Labour failure at Westminster, for the first time in a generation funding for Scotland would fall in real terms.

Mr Gray accused the First Minister of being "a grievance, not a government" and maintained that the UK Budget would result in 82 million more coming to Scotland.

Plenty of heat was generated in this clash but unfortunately – though predictably – there was very little light shed on the effect of the Budget on Scotland. For that we have to turn to the Chancellor, Alistair Darling, who, in our interview published today, paints a bleak picture of the consequences of the coming squeeze on public spending.

Mr Darling warns that, like the UK government, the Scottish administration will have difficult decisions to make because it will suffer a substantial reduction in resources as the Treasury presses ahead with its plans to reduce substantially the UK's massive deficit.

Although he was unable to give precise details, Mr Darling made it clear that the 11 billion of efficiency savings announced in the Budget would impact on Scotland through the Barnett formula which determines funding for Holyrood. In other words, if there are cuts to purely English budgets, in health or education say, there will be a proportionate cut in funds coming to Scotland.

The same principle applies to the 5 billion of spending cuts – as opposed to efficiencies – in the Budget and to the 18 billion reduction in spending which the government plans in a comprehensive spending review which will come, conveniently, after the election.

As Barnett formula experts know, if the UK government protects services like health and education, which are devolved, while cutting non-devolved areas like defence or social security, Scotland will not fare as badly as Whitehall.

However, the scale of the cuts foreshadowed by Mr Darling indicated that no area of spending south of the Border is likely to escape, so Scotland is likely to suffer something like a 3 billion real-terms cut by 2013-14.

The question for Scotland's politicians at Holyrood is what they do about this?

They can, of course, make their case to Whitehall and they should do so on behalf of the people who elect them. That might have some effect, but given that Scotland has higher spending per head that the UK average, such pleas are likely to fall on deaf ears.

That being so, it is incumbent on the Scottish Government to do its best to cope with the funding hand it is dealt. Mr Salmond has made much of running a responsible administration. Now is his chance to prove it. Instead of playing the cross-Border blame game, the SNP must plan for leaner times ahead and come to terms with one of the truths of politics: to govern is to choose.