SNP Government underspends budget by almost £200m

The Scottish Government underspent its budget last year by almost £200 million, Deputy First Minister John Swinney has told MSPs.

John Swinney made the announcement to MSPs on Thursday. Picture: Steven Scott Taylor
John Swinney made the announcement to MSPs on Thursday. Picture: Steven Scott Taylor

They also said the revelation “puts into context” recent SNP complaints about a £107m cut for Scotland unveiled by Chancellor George Osborne.

The Deputy First Minister said the approach underlines his “sensible management” of the public finances and is comparable with previous years.

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It came in the same year – 2014-15 – which saw 1,000 jobs axed across Scotland’s public sector as the impact of spending cuts continued to bite.

The cash includes £151m in ongoing “resource” spending, as well as £41m on “capital” spending for building projects. This amounts to 0.7 per cent of the total budget for 2014-15.

Labour said that the SNP government should be spending their budget more effectively to protect public services in Scotland. Scottish Labour finance spokeswoman Jackie Baillie said: “The SNP government in Edinburgh have decided to deny millions of pounds worth of funding from our schools, hospitals and public services.

“In Scotland we are seeing a NHS which is failing on nearly every measure, a widening attainment gap between rich and poor children, and a social housing crisis which sees waiting lists stretch into decades – why isn’t the available money being spent to help communities around the country?

“The SNP have made a habit of anti-austerity posturing – today has shown yet again that their rhetoric does not match their record.”

Labour said the total underspend was actually £354m – although this includes £153m of “non-cash” spending over which the SNP government has no control. But the £151m “resource” underspend is the highest since 2007-8 and up by £7m on last year.

Ms Baillie also pointed to a 2008 statement by Mr Swinney which saw him boast that the days of hundreds of millions of pounds in underspends were over.

Conservative finance spokesman Murdo Fraser said: “The £192m cash underspend which the Deputy First Minister is carrying forward into the current year rather puts into context the in-year budget reduction of £107m that he is so exercised about – nearly twice as much.”

Education was one of the biggest losers with an underspend of £84m, while social justice budgets had £41m left over despite the swingeing austerity cuts.

The health budget was underspent by £12m, while infrastructure had £114m left in the pot.

Liberal Democrat leader Willie Rennie added: “Rather than ramp up the rhetoric John Swinney should do his job.

“It seems that a Westminster Conservative cut of £107m is punishment but a John Swinney underspend of almost double that is prudent.

“Our teachers, patients and doctors will find it difficult to understand the difference.

“That’s why he should get on with his job of managing public finance and properly resourcing these public services.”

But Mr Swinney said there is a “fundamental difference” between the UK government cuts and his underspend.

He added: “The difference is this – we will be able to spend the £192m that we are carrying forward. That will remain part of our spending power – we have lost the £107m of spending power.

“It is a very simple concept to grasp that the sensible management of our public finances, to make sure that we comply with the Treasury requirement to live within the budget cap, enables the government to carry forward a limited amount of resources to spend in this financial year. But the Conservatives have removed £107m from our budget once and for all – it will not return.”

Capital resources had been freed up as a result of project savings including £5.6m on Glasgow’s Fastlink Project and £16m in housing capital receipts, he said.

The Deputy First Minister used his statement at Holyrood to attack Mr Osborne’s decision to cut Scotland’s budget for this year.

The £107m reduction in 2015-16 is the consequence of £3 billion of savings being made to UK departmental budgets.

Mr Swinney said: “Today’s outturn figures must be set in the context of continued UK government reductions to the Scottish budget, which is already facing a 9 per cent real-terms reduction over the current spending review period.

“We face the prospect of further budget reductions from the UK government in future years and there is real concern about the impact of the Chancellor’s recently announced further budget reductions in 2015-16.

“It is unacceptable for reductions to be imposed to a budget already agreed by the Scottish Parliament.

“However, the scale of these imposed future challenges could require us to tackle some of the Chancellor’s 2015-16 budget reductions this financial year.

“While I utterly disagree with the decision the Chancellor has taken, I intend to take as flexible an approach as possible to address his cuts, in order to minimise their impact to the people of Scotland.

“The Scottish Government will do everything possible to mitigate the impact of these cuts and we will continue to focus on our priorities of growing the economy, protecting public services and tackling inequality.”