Scottish budget to be announced

The Scottish government is announcing its final budget plans before next May’s election, which is expected to include about £1bn of savings.

Finance Secretary John Swinney is planning to cut public sector costs in the year ahead, through a pay freeze and an end to big bonuses.

He also wants to move some day-to-day spending to projects involving capital investment, to help save jobs.

But opposition parties have accused the SNP of planning an “election budget”.

The spending plans are being brought forward in a Budget Bill, which is expected to face a final vote in parliament at the start of 2011.

Labour, the Tories and the Lib Dems said ministers should be announcing a full, three or four-year budget, which is normal practice at the start of a new Spending Review period.

In return for public sector pay restraint – which could see a year-long pay freeze and a £300m saving – Mr Swinney said the government would relieve pressure on peoples’ household bills.

He will press forward with a council tax freeze, in place for the last three years, and has given his commitment to policies such as scrapping prescription charges and continued funding for free care for the elderly.

Mr Swinney told BBC Scotland: “We’re setting out one-year, specific budget proposals that will address the most significant reduction in public expenditure that Scotland has ever faced since devolution.

“What we’ll also set out is an explanation of where we see the development of public services taking course in the years to come.”

The finance secretary said Scotland’s budget would be cut by £1.3bn as a result of the UK Spending Review, although Westminster ministers have put the reduction at £900m.

He added: “I’m going to be very open with people in Scotland about some of the difficulties that we’ve had to face.”

Scottish Labour leader Iain Gray attacked the SNP’s record on capital investment, adding: “John Swinney has let down Scotland badly at the toughest time for the Scottish economy in a lifetime. His record will go down as four wasted years.

“The SNP’s blind dogma cut off the pipeline for capital projects worth £2bn and with it the loss of 40,000 construction jobs.

“This would be bad enough at the best of times but the SNP have left Scotland more vulnerable than the rest of the UK during the recession.”

Tory finance spokesman Derek Brownlee, along with the Lib Dems, backed a pay freeze, but argued the measure did not save money in itself.

He said: “What the country needs instead is a longer term plan on how we get the public finances back on a sustainable footing so we can all have a bit of confidence about where we’re heading as a country.

“The challenge for the SNP is whether they want to approach this budget as a party of government or as a campaigning party.”

The Liberal Democrats’ Jeremy Purvis added: “We are prepared to work constructively with the Scottish government to make sure there is a budget for all of Scotland.

“But the signals from the SNP are not good at the moment – they are only looking at a very short-term set of proposals, and, at the moment, it looks like they’re only focusing on the next six months and that is not the type of government the country needs.”

The Scottish Greens – whose two votes are vital to getting the budget through parliament – called on the government to use existing powers to raise cash, including the ability to increase the basic rate of income tax by 3p in the pound.

Green MSP Patrick Harvie said: “This week, it seems likely the Scottish people will be offered four variations on a theme by the other parties, four ways to implement Tory cuts.”

The Scottish government gave a flavour of things to come even before the budget announcement, after announcing on Tuesday that NHS consultants’ bonuses would be frozen for a second year, while the perk would not be given to anyone who was not already getting it.

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