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Pre Budget Report
26/11/2008
The Scottish Government will invest Scotland's share of increased capital expenditure from the Pre Budget Report in projects that will help 'keep the economy moving in difficult times', John Swinney said today.
Scottish Ministers will make full use of the flexibility to spend an extra £260 million over this year and next, giving priority to improving school buildings and complementing the infrastructure investment already underway across Scotland.
But the Finance Secretary warned the Pre Budget Report would also mean a 'crude cut' in Scotland's budget of up to £500 million in 2010-11 and promised to work 'tirelessly to reverse' the decision.
Full details of how the £260 million will be spent will be set out in the near future, following consultation - including with local authorities, but Mr Swinney told Parliament today that the Scottish Government will:
- Give priority to capital spending on new and improved school buildings and look at:
- Accelerating investment in transport infrastructure and in projects to boost fuel efficiency
- Further opportunities for advancing investment in housing and regeneration including projects to address fuel poverty and energy efficiency
- Supporting improvements in the Further Education estate, again concentrating on energy efficiency
- And supporting Health Service projects
The Cabinet Secretary said:
"For some time, we have been making the case for the UK Government to deliver a package of tax cuts and increase public expenditure to respond to the current economic conditions.
"That is why we welcome the general direction the UK Government has now taken to get the economy moving.
"For our part, we will put this money to maximum use in Scotland - providing crucial work for our construction sector. It will complement both the substantial capital investment already underway and our economic recovery programme.
"We intend to give the highest priority to capital spending on new and improved school buildings. We will look at accelerating investment in transport infrastructure and in projects to boost fuel efficiency.
"Ministers will also look at further opportunities for advancing investment in housing and regeneration including through projects to address fuel poverty and energy efficiency.
"We will consider supporting improvements in the Further Education estate, again concentrating on energy efficiency. And we will be looking at further help for Health Service projects.
"But, while the acceleration of capital spending is welcome, there are other elements of the Pre Budget Report that give cause for concern.
"Many small businesses will continue to pay more in corporation tax than they did two years ago. There is still doubt over whether the reduction in VAT is enough to increase spending on our high streets. And in the long term the duty increases on fuel will have serious consequences for Scotland - particularly in our rural and island communities.
"All of this comes against the background of record oil revenues of £13.2 billion heading into the Treasury.
"And worse is to come - a significant cut in Scottish spending in 2010-11 and beyond, potentially the biggest cut in Scottish spending since devolution.
"A reduction in capital spending on health in England and Wales and new efficiency savings of £5 billion south of the border would see Scotland lose up to £1 billion over the two years from 2010-11 - just as our economy will be crying out for investment to take advantage of the anticipated recovery from the global downturn.
"We already have a stringent efficiency programme designed to deliver two per cent savings annually. These are savings that we can re-invest in public services.
"In contrast, this crude cut in Scotland's budget is a matter of deep concern. It is a decision this Government will work tirelessly to reverse."