The least a budget can be

by | 9 Dec 2021

The Scottish Budget is about as stand still as it gets, but bodes ill both for local government and for the prospects of a National Care Service - and Climate Change action

Details of the Scottish Budget have been announced. Is there any substance in it? The quick answer is no, not really. This may be an example of the largest gap yet between government rhetoric and government action.

It is worth noting that the media release (for a budget) does not contain a single number other than the date. It is precursory, predictable yet still slightly fantastical. The ‘fairer, greener, more prosperous’ mantra is so omnipresent now that it is becoming like background noise. Likewise attaching the adjectives ‘bold and ambitious’ to the start of statements seemingly at will.

What is most difficult to make a case for is sustaining the suggestion that this marks the moment when government “set Scotland on a new ambitious path”. For this to be the case you’d rather expect something to be different than what preceded.

That isn’t easy to stack up. The first thing to note is that the departmental spending figures set out in this budget are slightly distorted by the fact that there was a large amount of emergency spending during the pandemic and that is tapering out. This means that the total budget is in decline, as you might expect after emergency spending.

So the Scottish Government would have some justification in claiming they’re having to deal with a declining budget. But that is more problematic because they did not treat the emergency spending as emergency spending in a lot of instances. Rather it was added into core spending and media released as such.

By not acknowledging that last year and particularly this year’s spending were exceptional and seeking to take credit for a wide range of investments made possible because of it, it is much harder for the Scottish Government to plead poverty now. Bluntly you can’t take credit when budgets go up for exceptional reasons and moan when they go back down again afterwards.

So the Scottish Government must stand by the numbers in their departmental spending totals – and that means pretty well across-the-board freezes and cuts. Not only does local government once again get the most swinging cuts (in cash terms), it also sees something like a quadrupling of ring fencing.

If the Scottish Government keeps treating local government like this, slashing its budgets even as demand rises and reducing the autonomy of local government over the budget it does receive, the ongoing cold war between central and local government may erupt into a shooting war. People are already aware that many of the services they rely on (delivered through local government) are in decline. Something may give.

This may be an example of the largest gap yet between government rhetoric and government action

The main exception to this is Health which sees a very slight uplift. This is probably as much about presentation as anything – this administration will be loathe to be accused of cutting health spending. But what does not seem to be apparent here is any serious investment ahead of time to enable the establishment of a National Care Service worth the name. There is little breathing space.

Other than that perhaps the stand-out message is a surprising one – the Climate Change and Net Zero budget has been cut by 2.7 per cent in real terms, compared to a budget cut overall of 0.7 per cent. That means it is in the bottom three for government investment priority.

That is strange given the Scottish Government’s rhetoric. It also appears to be pretty humiliating to their Scottish Green coalition partners. If this settlement was designed to let everyone know who is really in control in this coalition it might look like this.

Some minor points: about £20 million of the £100 million cut from climate change budgets go to Justice, presumably to cover the cost of malicious prosecution pay-outs. Another £10 million goes to Angus Robertsons constitution department and it seems likely the opposition parties will be rather keen to track exactly where this money is going.

Outside of budgets there is perhaps even less to see. In the case of income tax it is quite reasonable to claim that the proposals represent pretty literally the least that could be done shy of doing nothing. It seems calibrated to enable Government Ministers to claim they are making the tax system ‘more progressive’ without increasing the tax burden on the middle classes.

The governing classes get to say they are taking ‘tough decisions’ in pursuit of that ‘fairer Scotland’ while the middle classes are protected and the very wealthy untouched. There is more than a hint of cynicism in this.

And that is basically that. It is the very definition of a stand-still budget with no-one greatly offended, the Greens seemingly put in their place, tax virtually untouched and government strategy unchanged.

The media release claims this is about stability. That seems a fair assessment. But ‘a bold and ambitious new path for Scotland’? That might best be thought of as rhetorical hyperinflation.

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