A BID to establish a beefed-up Scottish fiscal watchdog has been scuppered after SNP MSPs performed a remarkable volte-face by voting against measures they backed just weeks ago.
Holyrood's Finance Committee had said in January that the Scottish Fiscal Commission (SFC) should be given responsibility for setting financial forecasts that the Government's budget would be based on, a move that would potentially weaken John Swinney's control over the process by handing the vital power to an independent body.
However, an amendment to the Scottish Fiscal Commission Bill that would have brought the measure into force was defeated this morning, after nationalist MSPs Kenneth Gibson, Mark McDonald and John Mason united with Jean Urquhart, a former SNP MSP, to block the move. The measure was defeated by four votes to three at the committee as Mr Swinney, the deputy first minister, looked on.
The u-turn is likely to raise further questions over the effectiveness of Holyrood's committees, which critics have claimed are failing to perform their function of holding the Government to account with votes regularly splitting on party political lines.
The amendments, at stage two of the Bill, would have handed the SFC a similar role to the Office for Budget Responsibility (OBR), which sets projections which the UK Government bases its budget on. The importance of tax forecasts was demonstrated during George Osborne's most recent spending review, when better than expected projections from the independent OBR allowed the Chancellor to perform a U-turn over proposed cuts to tax credits.
Currently, the SFC merely assesses the Scottish Government's own forecasts, which is asked to sign off as "reasonable", a term that opponents argue is open to an overly wide interpretation.
A month ago, committee convenor Mr Gibson, unveiling the cross-party report, said: "We are strongly of the view that not only should the Scottish Fiscal Commission be independent, but it is vital that it is perceived to be independent. That is why we are calling for the Bill to be amended to strengthen the Commission’s role and to give it responsibility for producing the official forecasts.
"We believe it should assess the Scottish Government’s adherence to its fiscal rules and assess the long-term sustainability of the public finances. This will further strengthen the independent scrutiny role of the Commission and reflects the view of many witnesses who have appeared before the Committee."
However, today he voted with his party colleagues on the committee against Conservative MSP Gavin Brown's amendments that were designed to hand the body the power to set forecasts, while also refusing to support Labour MSP Jackie Baillie's proposed changes which would have seen the SFC analyse sustainability of public finances and ministers' performance against fiscal rules at least once a year.
Mr Brown said allowing the SFC to set forecasts would protect against "optimism bias" in Government projections and echoed Mr Gibson's original comments when he said the body must be seen to be independent.
Ms Baillie, Labour's finance spokeswoman, hit out at "excuses" from SNP members of the committee as they sought to justify their positions. She said: "As a committee we agreed things. I am genuinely disappointed that consensus has not held good."
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