John McLaren: Now it's over to the politicians - and we can't wait till their holiday is over

THE publication of the Independent Budget Review Report is the beginning of a long process that will drastically change the face of public services in Scotland over the next five years.

As the group has taken the UK emergency Budget as its effective starting point, which emphasised expenditure cuts over tax rises, it had no option but to highlight how to introduce substantial cuts to public services in Scotland. In doing so it has concentrated on the big strategic decisions that need to be taken rather than on specific cuts to individual services.

Hence, there are no big surprises but rather a highlighting of issues over the knock-on impact of ring-fencing health; the feasibility of maintaining the council tax freeze; the merits and affordability of universal vs targeted provision; and the importance of pay and conditions. The chapter on Remuneration and Workforce is the largest in the report by some way. This reflects how much of the Scottish Government's budget (more than 50 per cent) goes on pay.

A number of options have been outlined but each one has implications with regards to tight pay deals and significant job cuts. Meanwhile, the political and public debate on these trade-offs is muted at best.

But this report should be regarded as very much a first step. It doesn't prioritise across services. It doesn't outline specific cuts across services, as the earlier Howatt Report did and as the Irish government's review did.

These are the next steps that need to be fast-tracked. And the politicians are given a fairly hefty nudge in taking this forward quickly and with a degree of co-operation.

Twice in chairman Crawford Beveridge's opening message, he talks of the need for "strong leadership" from parliament and political parties. The report also makes clear that we already have enough clarity over the order of the magnitude of future cuts to allow for immediate action on planning.

The Goudie Report on future Scottish Government expenditure outlined the spending implications of different expenditure scenarios.

This allows the Scottish Government to request departments to illustrate the impact of cuts of various sizes on their operations.

All that is needed is the will to carry this out.

It is, therefore, rather unfortunate that the report should arrive while the Scottish Parliament is on its summer holidays. We need political discussions on these important issues now, not to wait until September for these to occur.

The report also makes a much-needed plea for frankness and cross-party agreement on these matters. If this happens, it will be a welcome but dramatic shift from the tone of debate seen so far on this issue.

With the biggest annual cut, 4 per cent in cash terms, coming in the first year covered by the Spending Review (ie, financial year 2011-12), all public service bodies who need to plan for the future will be very much hoping their task is made just a little bit easier by greater co-operation and clarity. Soon.

John McLaren is an economist with the Centre for Public Policy for Regions at Glasgow University.