Budget battles 1: Holyrood

It looks like Brian Taylor has been getting some interesting briefings about the current spending negotations between Whitehall and the devolved administrations:

I understand that the devolved territories – including Scotland –
have now been told to expect that their budgets will rise by inflation
plus 1%, rather than 2%. Tighter than elsewhere.

The Barnett formula – which computes annual variations in the budget, comparable to England – remains untouched. 

Rather, the Treasury is proposing to reconfigure the base upon which Barnett is calculated. 

Which means?  In relative terms, less for Scotland.  Less to spend on public services.

Stand by for substantial protest from Scotland – in consort with
Northern Ireland and Wales. Indeed, it’s already under way. (Spending constraints)

That seems to be the Scottish Government version, because Whitehall has come back with a rebuttal:

The line is that Scottish Ministers are basing their claims of a
potential shortfall upon their own inflated calculation of what
Scotland gets now, of the existing spending baseline.

In other words, Scotland is starting from a different – and erroneous – point to that used by the Treasury. 

One UK Government source said that to suggest Scotland would suffer
disproportionately was “a mis-statement – what others might call a
lie.” (Spending – the counter argument)

By an intriguing coincidence Scottish Labour leader Wendy Alexander chose today to suggest there is a case for changing the Barnett Formula:

She said its future needed to be reconsidered in the
light of "anxieties" that Scottish ministers did not have to raise the
money they spent – especially "as we are about to be the beneficiaries
of the largest public spending settlement that we have ever had".

impression that Scots are getting a better deal on public services has
increased since Ms Alexander’s opponents, the Scottish National Party,
gained power in May. (Daily Telegraph)

(Strange comment, Does the Telegraph think that Gordon wants to give the SNP a better deal than he gave the Labour Executive)

Could Alexander’s statement be seen as the logical corrollary of her flirtation with fiscal federalism? Or is she just acquiescing to Brown’s spending squeeze?







Leave a Reply

Your email address will not be published. Required fields are marked *