Expenditure Plans

Part of the debate – in the Scottish Parliament at 3:42 pm on 6 October 1999.

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Photo of Kenneth Gibson Kenneth Gibson Scottish National Party 3:42, 6 October 1999

I am afraid that I will quibble, and it will not be about pennies.

In these days, when most political parties worship at the altar of low income tax, but at the same time seek to be seen to be increasing public expenditure, it is always illustrative to look at precisely who is paying the bill.

I recently had the pleasure of looking at the Executive's expenditure plans in the document, "Serving Scotland's Needs". In particular, I was interested in local government and in how the Scottish Executive would manage to put the quart of its spending plans into the pint pot of its self-imposed financial constraints. The news for Scotland's local authorities and hard-pressed council tax payers is not good. Finding that out was not an easy feat. The presentation of the figures in "Serving Scotland's Needs" is particularly obscure. Nowhere in the publication is it possible to make a direct comparison between the amount that local authorities will need to spend both to maintain current levels of service and to meet new burdens, and the resources that the Government plans to make available. Yet that comparison is crucial to determine how much extra cash will have to be provided through council tax or by how much services will have to be cut.

To make the comparison, I have made two broad assumptions: first, that loan charges will increase faster than inflation—4 per cent per annum for 2000-01 and 2001-02; and secondly, that expenditure will need to rise in line with inflation—by 2.5 per cent per annum.

Using those assumptions, I estimate that local authorities will need an extra £660 million in 2001-02. According to "Serving Scotland's Needs", the planned increase in funding for those years is only £490 million. That leaves a gap of £170 million that local authorities will have to find for themselves, either by putting up council taxes or by cutting services.

I am afraid that that is not the end. Including the new commitments—or new burdens, as they are called—worsens the situation. I would like to list some of the more important ones. The new burdens include specific grants. Our research indicates that, after inflation, there will be a shortfall in that area of £14 million in 2000-01 and £44.6 million in 2001-02. Another burden is the expansion in child care. In September 1998, the Government announced an additional £91 million for the expansion of child care. That is not included in specific grants, but is part of central Government support and is not budgeted for in 2000-01, or the year after that. Estimated additional costs for that new burden in those years are £18.7 million and £22.4 million respectively.