The Finance Secretary's Budget presentation to Parliament was a master class of political spin.
His over-riding priority remains driving economic recovery and promoting sustainable economic growth. Further, Mr Swinney brags about his own record of "effectively managing the public finances".
How realistic are these claims? On reading the document, which is delivering more cuts in block grant, one would think this is a growth Budget. Mr Swinney manages this by combining past decisions and actions with the marginal changes in the Budget to give a false impression of government activity. A major focus is on capital investment, in which he properly attacks the reductions, then asks for additional funding, ignoring the fact that his own private finance model – the NPD pipeline – could have been accelerated without Treasury approval last year when capital cuts were already severe.
He wrongly claims his decisions are providing a fiscal stimulus, when they are in fact just a reordering of priorities.
His claims to be supporting employment also combine existing spending with new spending, making it impossible to distinguish the likely impact overall. Mr Swinney lists minor changes to create work in the private sector, without acknowledging that his Budget decisions have caused severe job losses in the public sector. This is not a strategy that will protect employment, and it will continue to lose jobs.
Why is this? Because of his retention of the council tax freeze, which is in fact a real cut, and his maintaining the fiction of "efficiency savings" of 3% across the board for four years. The local government settlement includes support for the freeze, but once that is discounted, the core budget continues to be cut, and to require a 3% efficiency saving. Between them, the NHS and local government spend around two-thirds of the Scottish budget. Both provide labour intensive services and thus budget savings require job cuts. This has an adverse effect on the economy, where the main problem is lack of demand, not public spending and taxation, which remains low in European terms.
In conclusion, this is a misleading Budget. It will not drive economic recovery, as despite his acting, capital spending levers remain far below 2010, and his Budget decisions will continue the haemorrhage of jobs and services in the public sector. This is not the Budget for jobs and growth his press release claims.
l Arthur Midwinter is an associate professor in the Institute of Public Sector Accounting Research of Edinburgh University, and was budget adviser to the Finance Committee from 2002-2007
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