Analysis: Stark scenario, with little chance of easing pressures on pay

THE first decade of devolution saw unprecedented rises in government spending, with increases of roughly 5 per cent a year in Scotland if adjusted to take inflation into account.

Now we’re in the second decade of devolution, the reverse is the case.

John Swinney’s figures confirm what is known so far about Scotland’s future Budget profile and mimic what is happening to similar elements of the UK government’s Budget between now and 2016-17.

It’s a pretty stark scenario, and may get even more stark when the cuts announced by the Chancellor last November are better defined.

The £50 billion cuts identified by Swinney is a cumulate figure, worked out across a large number of years, and are intended to give some idea of the level of public spending lost as a result of the recessionary pressures and their knock on impact on government budgets. The implication of all this is that we still have five years of real-terms cuts to come, with the cuts in the last two years likely to be some of the deepest.

There will be more pressure on keeping up the wage freeze and pay restraint in the public sector. If the Scottish Government is going to prioritise health and tertiary education, which account for nearly 50 per cent of the Budget, it means that other areas of spending are going to suffer badly.

•  John McLaren is a senior researcher at the Centre for Public Policy for Regions.