WHISPER it, but the Scottish Government is relatively well placed to withstand the cold blast of winter.

At times like this, the extra £2,300 public spending per head of population, compared to our southern neighbours, comes in handy.

Yesterday’s Fraser of Allander Institute’s pre-Budget report is likely to shed more light on fiscal realities than anything we hear from John Swinney on Thursday when the usual clichés about under-funding and shortage of choices will doubtless be to the fore.

Actually, one of our problems is that existing fiscal choices have exposed weakness rather than strength with existing tax powers producing less revenue, as well as higher taxation. Fraser of Allander says: “In May, the ‘net tax’ position was forecast to be £265m. This implies that the Scottish budget was £265m worse off than it would have been had these taxes not been devolved.”

Demanding more tax powers is the easy bit and politically attractive. Doing so without regard to realities in the Scottish economy which result in them yielding less money rather than more suggests we should be more careful about what we wish for.

Inflation caused largely by the Ukraine war leapt during 2022-23 from a predicted 3.7% to 11.1%. In Whitehall, departments were told to make savings so there was no immediate rise in spending or Barnett consequentials. John Swinney claimed that cost the Scottish budget £1.7 billion in the current year.

Fraser of Allander examines that claim in some detail, finds it to be “overblown” and puts the figure at around £1 billion. What’s £700m between friends? It may be a relatively minor complaint in the great scheme of things, but wouldn’t it be helpful if – when the acting Finance Secretary quotes a key figure – it was possible to believe him? Or is it always essential to paint the worst possible picture of how “we” are treated?

Anyway, going forward, things are getting better in this respect at least, though I doubt if that will be in Thursday’s script. The Chancellor’s mini-Budget in November “generated significant consequentials” for Scotland over the next two years “which will more or less offset the impacts of inflation on the budgets for these years”.

It is worth pausing to consider the significance of that statement. Inflation is a scourge upon the land affecting every household and business. Yet at Scottish Government level, it has been “more or less offset” for the next two years with the stroke of a Whitehall pen. There’s surely not a lot to complain about in that…?

Also, it is worth noting that next year’s block grant from the UK Government, which is the main source of income for Holyrood, “is the highest it has ever been in real terms, excluding the ‘Covid’ years of 2020-21 and 2021-22”. The unwelcome truth is that, from the start of devolution, the Scottish Government has been well-funded and still is.

Fraser of Allander continues: “Of course, the Scottish Government has significant devolved tax powers and therefore has decisions to make on Thursday about whether or not to use them to generate more revenue for public services.” This is where the tricky bit comes in for Mr Swinney, as he becomes decision-maker rather than beneficiary.

Here’s his fundamental problem: “The latest outturn data shows that there are 2,537,900 taxpayers in Scotland, which represents 57 per cent of its adult population. The majority of taxpayers are at the starter or basic rate, with only around 16 per cent of taxpayers paying the higher or top rate of tax.” That translates into 362,000 on the higher rate and just 14,700 on the top rate.

Then a pretty astonishing statistic: “When we consider how much tax each of these groups pay, the majority is paid by higher and top rate taxpayers – with 60 per cent of tax receipts coming from these two groups.” In other words, squeezing the rich till the pips squeak doesn’t work in Scotland, because there aren’t enough to squeeze.

The UK Government plans to reduce the threshold for top rate income tax from £150,000 to £125,000 so doing the same in Scotland will be an easy hit, albeit bringing in only another 20,000. Cutting the higher rate threshold to £40,000, as recommended by the STUC, would catch many who face their own cost of living challenges.

That might be more acceptable if there had been visible signs of public services improving or inequality gaps closing. That has patently not happened and there would be minimal confidence that paying more tax to the Scottish Government would equate to more socially-just outcomes which cannot be achieved through existing resources and priorities.

Behind the progressive façade, by far the SNP’s most significant tax intervention was to freeze council tax for a decade, an exceptionally regressive policy which deeply wounded council services. Again, Fraser of Allander is helpful, pointing out that “matching council tax policy in England or Wales would raise over £500m in additional resources for devolved public spending in Scotland.”

The vast majority of that benefit has gone to the better-off while the poor, who rely disproportionately on public services, have paid the price. That is just one of the factors which leads me to believe that there needs to be a root and branch examination of not just how the Scottish Government raises its money but also how it spends it.

I doubt if we will hear much of that self-reflection on Thursday because it would involve owning up to so many of its own failings. Holyrood desperately needs new faces and new thinking if there is ever to be any significant progress, with delivery prioritised over grievances.

Meanwhile, perhaps as a gesture to those of us who wonder “where does all the money go?’, Mr Swinney could use his statement to put on hold some of the expensive follies still in the making. How about the National Care Service and the Deposit Return Scheme for starters? That would chip in a couple of hundred million.

Read more by Brian Wilson: