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HM Treasury (Funding Mechanisms)

Question Time — Scottish Executive — Finance and Sustainable Growth – in the Scottish Parliament at 2:15 pm on 11th September 2008.

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Photo of Bill Kidd Bill Kidd Scottish National Party 2:15 pm, 11th September 2008

To ask the Scottish Government what recent discussions the Cabinet Secretary for Finance and Sustainable Growth has had with HM Treasury about funding mechanisms. (S3O-4140)

Photo of John Swinney John Swinney Scottish National Party

I have made representations to the Treasury on a number of funding matters recently, including police and fire pensions, the fossil fuel levy, further access to end-year flexibility balances, council tax benefit and local income tax.

The Government has made clear its concern over the stance that has been taken by the Treasury on a number of those matters. I will continue to press for Scotland's rightful entitlement to funding although, ultimately, I believe that we must move to a position where Scotland is responsible for all spending and revenue.

Photo of Bill Kidd Bill Kidd Scottish National Party

Given the recent dispute over the funding mechanism for police and fire service pensions, which the cabinet secretary mentioned and which has prompted Joe Grant, the general secretary of the Scottish Police Federation, to state that the Treasury should be providing funds to meet those costs, can the cabinet secretary confirm that the previous Scottish Administration knew of the pension situation in England since 2006 but disgracefully failed to ensure equity for Scottish emergency services staff by acting for them?

Photo of John Swinney John Swinney Scottish National Party

There are two elements to the police pensions issue that we have to deal with. The first is the change to the commutations factors that influence the calculation of police pensions, and the second is the increase in the level of police pensions expenditure as a consequence of the fact that more officers than we would normally expect are scheduled to retire over the current financial year and the next two financial years.

The Scottish Government has taken the view that we must ensure that the commutation factors are paid, and paid promptly, because they affect the pensions payments that are made to retiring police officers with effect from 1 October. We have committed to pay that resource, despite the fact that HM Treasury provided those resources in relation to police forces in England and Wales.

The issue is, of course, tied up with the fact that police pensions are dealt with not on a national basis but on a local basis in Scotland. Certainly, the debate about whether to draw all those pension provisions together into one fund is an issue that has been kicking around for 10 years. No Administration has tackled the issue before, but this Government is engaged in positive discussions with our local authorities on how to address it.

Photo of Elaine Murray Elaine Murray Labour

On the issue of funding mechanisms, has the Scottish Government had discussions with the United Kingdom Treasury, Partnerships UK or any other agency regarding revenue support for public sector borrowing under the Scottish Futures Trust? Local authorities are concerned that the existing 80 per cent revenue support for public-private partnership projects will not be replicated under the new system.

Photo of John Swinney John Swinney Scottish National Party

That issue will be a material part of the discussions that the Cabinet Secretary for Education and Lifelong Learning has with local authorities, as I set out in my statement to Parliament yesterday. Of course, the cabinet secretary will bear in mind the points that have been made by Elaine Murray.