The budget: admirable guesswork
Writing: Adam Losekoot
The Scottish Budget was delivered by Kate Forbes (who has since been appointed the new Scottish Government Finance Minister) recently and much of the media attention has been upon the actions of her disgraced predecessor - Derek Mackay. However it is important that we don’t allow ourselves to be distracted by the (deplorable) actions of one man. The release of a budget is the biggest test any government faces as this is when we really get to see what their priorities are, what they view as important and whether it holds up to the promises they have made in the past.
All in all, it’s a pretty solid budget and has passed through the first stage of voting in Holyrood with relatively little difficulty. The Greens made their usual threats to withdraw support unless there was a colossal increase in funding to counter climate change and successfully got the government to introduce free bus travel for under 19s. The tories complained that the police were being betrayed by the SNP despite the fact that their own party has crippled police forces in England which are in far worse condition with regards to both personnel and funding. Labour probably complained about something but in reality, are just waiting for the next UK election so they can put all this in their manifesto and pretend Starmer/Nandy/Long Bailey came up with it, and Wille Rennie… Well, is anyone really bothered with what Willie Rennie has to say?
This budget contains an extra £645 million devoted towards childcare and the provision of further early learning services; plus £220 million in funding to help get the Scottish National Investment bank off the ground with the goal of using it to help drive Scotland’s journey to becoming carbon neutral as well as investing in local businesses. £180m towards increasing attainment in schools, over £15 billion going towards health provision and almost £290 million on public transport services. £117m towards mental health services and the beginning of a project to increase spending on infrastructure by £1.56b per year by 2025-26. Councils are set to receive an extra £95m and there will be an almost 60% increase in direct funding to tackle the social harm of drug and alcohol abuse. Police Scotland are to receive an extra £60m and a further £6.5m will be allocated to community justice services. As was the case last year, 56% of scots will pay less income tax than people earning the same wage elsewhere in the UK. I could go on but to be honest there are too many numbers already and I’d like people to finish this article and not just stop halfway.
This budget is problematic for a number of reasons though. Whilst all government budgets are built on forecasts and models as economists try to plan for the future, this one relies on far more guesswork than most: putting faith in forecasts of a stunted though notably still increasing GDP following a decrease in growth from the 3 years of Brexit negotiations (and their still uncertain outcome). This is the final budget before the 2021 Holyrood elections so naturally it’s not got much in there which could upset people. There are not any massively expensive or revolutionary schemes and, given what we’re witnessing of such projects from the government down south, that’s probably a good thing. It also assumes that the UK will have successfully negotiated a deal with the EU by the end of the year that will have no detriment whatsoever on the Scottish Budget and that all EU funding we currently receive will be fully replaced somehow.
Meaning we either stay closely aligned with the EU and continue to benefit from projects we are a part of, or the UK will take over responsibility and maintain funding at current levels. It doesn’t take a genius to realise that there is as much chance of Johnson’s government sticking with EU regulations as there is of Heinrich Himmler and Pol Pot orchestrating a snowball fight in the 8th circle of Hell (according to a google search that’s the hottest one – turns out we’re not just about politics here at Rattlerood).
A bigger problem though, is that the UK budget has not yet been released and with the surprise resignation of Sajid Javid it has been pushed back even further, with the current release scheduled for 11th March. The UK budget was due in November- which would have given the devolved administrations time to analyse the Barnett consequentials they are set to receive as well as any projects that the treasury intends to finance itself. In the absence of this, any budget is pure guesswork. This Scottish budget has been built on estimations drawn from Conservative manifesto promises in the 2019 general election. Given the circumstances this makes sense and was really the only plausible move. The question that remains: will the tories keep their promises now that they are in power? If not, things are going to become very difficult and we can expect an even more strained relationship between the two parliaments.
Westminster has a duty to all three devolved administrations, and it is failing them. To delay the budget for such a long time is utterly unacceptable. This sets a dangerous precedent and shows how little the Prime Minister and his advisors care about maintaining any kind of positive relations with the rest of the country. Instead, he and Cummings appear to be busy trying to build a cabinet which places loyalty before competence. Patel and Sunak are shining examples of their preference for lapdogs over ministers – and this isn’t even starting on Sabinsky. This budget and the obstacles the Scottish Government have had to navigate to create it are a worrying sign of what is yet to come during Johnson’s premiership, not just for Holyrood but for each of the devolved administrations.