Executive 'can save Scotland £400m more'

WENDY Alexander yesterday attacked ministers’ attempts to cut waste from the Scottish Executive budget, claiming they could save at least a further £400 million if they adopted targets used by Westminster.

Labour MSPs were furious with Ms Alexander, who embarrassed Tom McCabe, the finance minister, by making comparisons between the Executive’s efficient government initiative and the plans being driven through Westminster by Gordon Brown, the Chancellor.

Ms Alexander told the finance committee at Holyrood that if the Executive implemented efficiency savings equivalent to those that a group under Sir Peter Gershon had identified for Mr Brown there would be more money freed up to invest in front-line services such as the NHS.

The former enterprise minister highlighted the claim made by Jack McConnell, the First Minister, that he would "go further" than the Gershon review.

Ms Alexander claimed that if the Executive had stuck to this pledge. more than 1.24 billion would be released for front-line spending north of the border.

But with the Executive committed to only 745 million in "cash release savings", the shortfall, according to Ms Alexander, was 495 million.

Ms Alexander compared that figure with the spending earmarked for the NHS waiting list initiative for 2005-6, which is just 47 million.

Questioning Mr McCabe, the former minister asked: "If all of the savings are to be redeployed in frontline services why is it right in principle to leave 400 million in the back office in Scotland, when elsewhere it will be moved to the front line?"

Speaking outside the committee, Ms Alexander added: "If we had been as ambitious, this money would have been available for the health minister or for the finance minister to re-allocate.

"We have been told that in Scotland our spending review is to be as ambitious, if not more ambitious than Gershon but these figures tell a different story."

Mr McCabe made his disagreement clear to the committee. He told MSPs that the situations in Scotland and the rest of the UK were not directly comparable.

The finance minister said the Executive would constantly be looking for more areas where efficiency savings could be made. He said: "We are at the start of the process here. There is no doubt about the scope of our ambition."

The minister has not ruled out job cuts but has declined to put a figure on how many staff may go.

He told the committee: "If you save money for the public of Scotland for the same outputs, that’s the kind of efficiency the public want to see. If some people want to convene cheese and wine parties to discuss the semantics of that, then that’s their business."

Speaking afterwards, Mr McCabe said comparing planned savings in England with those in Scotland was only looking at one side of the balance. He said: "If you take the job figures, for instance, that were mentioned down south, 86 per cent of those are contained on wholly reserved departments that we don’t have at our disposal here in Scotland."

The relatively civilised exchanges around the committee yesterday morning did little to disguise the anger many Labour MSPs felt at Ms Alexander’s intervention.

Back-bench Labour MSPs believe that Ms Alexander is looking to exact her revenge on Mr McConnell, who forced her out of a leadership contest when the two joined battle to succeed Henry McLeish as First Minister.

One Labour MSP said: "This is all about Wendy getting her own back on Jack and showing Gordon Brown that she thinks he is wonderful."

Ms Alexander is privately sceptical that the Executive is serious about delivering the kind of saving the Chancellor has identified in Whitehall.

She believes Mr McConnell is "spinning" the figures because he wants to be seen as ahead of the UK government at a time when he is being criticised south of the Border for failing to make radical reforms.

The row was sparked by an analysis of the Executive’s plans provided to the finance committee by Professor Arthur Midwinter. Prof Midwinter, the committee’s official adviser, told the MSPs that some future savings touted by the Executive had already been made.

He added: "There is a gap in the information as we cannot identify where the increases in resources to service delivery have been made." He said that on the basis of the information provided it was not possible to track whether there was any growth in front-line services.

Prof Midwinter added: "I am left unclear as to how procurement savings will be measured and doubtful as to the delivery of the totals."

Citing examples from social housing provision to the Common Agricultural Policy, Prof Midwinter variously described the Executive’s claims as "guesswork" and "problematic".

Alasdair Morgan, an SNP member of the finance committee, said that the differences exposed the divisions within Labour.

He said: "It is interesting that the tensions that have emerged between former ministers and ministers. I just wonder if they are reflected internally within the Executive.

"There is clearly bitterness there. The problem that Mr McConnell is finding - as Mr Blair has found - is that former ministers on your back-bench with expertise from government can pick holes in what you are doing."

Last night, however, local government leaders weighed in behind the Executive.

Pat Watters, the president of the Convention of Scottish Local Authorities, said the Executive’s efficiency drive was the correct way to proceed.

Mr Watters said: "Efficient government is not something which is based on guesswork as some sections of the media have been suggesting.

"The Executive should be applauded for its efforts in this area and local government wants to play its full part having nothing to fear from efficiency."