Creative thinking needed from Scottish Government to cope with #SpendingReview impact

25/11/2015
CommonWeal

Mike Danson, Professor of Enterprise Policy at Heriot-Watt University, takes a look at the UK Government’s Spending Review and how it impacts on Scotland

TODAY’S Spending Review and Autumn Statement remind me of all those complex, devil’s-in-the-detail budgets of Gordon Brown.

The big news on tax credits hides the continuation of the disastrous cuts in benefits as Universal Credit comes in. Excellent work by colleagues at Sheffield Hallam University has forensically analysed their impacts, along with other aspects of welfare reform. They will have devastating impacts on families across Scotland, pushing ever more into poverty.

Against this background, further deep cuts in the amounts available to the Scottish budget mean deflationary effects on the economy. Capital budgets will be protected to a greater extent with even some growth and so the importance of having a public procurement policy which works for Scotland and its people is even more significant.

Creative thinking, planning and implementation will be crucial in ensuring that the maximum impacts are achieved for the benefit of workers, firms and consumers in Scotland. That means policymakers and practitioners will need to be clever, learn from good practice and not take the easy route of assuming it can’t be done.

“The moves away from supporting renewable energies and leading technologies continues with increased fuel bills, undermining of small scale schemes and the end of the carbon capture promise all affecting Scotland relatively more than elsewhere.”

The moves away from supporting renewable energies and leading technologies continues with increased fuel bills, undermining of small scale schemes and the end of the carbon capture promise all affecting Scotland relatively more than elsewhere. As with many other elements of this Statement, it suggests a Government and Chancellor who are focused on the short term and hoping for good news – in the form of the OBR having improved its capacity to forecast with any degree of reliability.

Without a growing export trade and growing economy, in the face of a global turndown, many of the assumptions underpinning the glowing future prospects will fail to appear. Coupled with this reliance on wishful thinking, the OBR and other Westminster agencies have made some spectacular adjustments to VAT estimates, definitions of eg Housing Associations’ debts and capital spending which again reminds us of the many changes to the definitions of unemployment, debt, and so on to whatever was necessary by Chancellors in the 1980s and 90s, including Gordon Brown.

Increased local taxes and cuts to local authority budgets in England indicate the direction of travel of the UK Government, as do increased debts for the young, privatisations and selling off of public assets. Further impossible ‘efficiency savings’ in the NHS, transport and other departments confirms a Chancellor that has lost control, continue to hurt the poor the hardest and has done little or nothing to tackle Britain’s long long term problems. Increased spending on military hardwear, much imported, against the attacks on those on low incomes and in poverty are the headlines.

The baying from his benches and the official opposition’s does not suggest a serious debate will follow or that the need for an alternative radical economic strategy is recognized. Scotland deserves and desperately needs better.