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Spending challenge looms

Brian Taylor | 13:59 UK time, Thursday, 5 November 2009

It is, I suppose, too much to expect our elected politicians to respond directly and instantaneously to that notably gloomy report from Audit Scotland about the state of Scottish public spending.

For one thing, the extent of the challenge is so huge. For another, there are elections looming: the by-election in Glasgow North East next week, the UK General Election next year.

Doesn't do to frighten the voters with talk of spending cuts - unless, of course, you are talking about the cuts which would inevitably follow in the wake of victory by your wicked opponent.

Sooner or later, though - probably quietly, in private - Scotland collectively will have to address the challenge posed by Audit Scotland.

In short, they say that there will be a tight squeeze on spending levels over the next five years, that efficiency savings alone will not fill the gap and that the public sector in its entirety requires to start thinking about its core priorities with regard to expenditure.

As a start, today's exchanges at Holyrood were far from propitious.

Labour's Iain Gray spotlighted what he suggested was a poor record of attendance by the first minister at the Financial Services Advisory Board, or FiSAB.

Considered as a hit against the FM, it was reasonably effective on the day. Alex Salmond responded by insisting that he and the finance secretary had regular meetings with those involved in the industry.

But why didn't Mr Gray major on the state of Scotland's finances more generally?

Because the FM would then, undoubtedly, have counter-attacked by suggesting that the Labour UK government was the progenitor of the problem, perhaps quoting Audit Scotland to the effect that the UK "has experienced the worst deterioration in its public sector finances of all OECD countries".

Labour's news release on the subject suggests that the FM might start by abandoning what it calls "vanity" projects such as the National Conversation on the constitution.

I haven't the time to calculate the precise percentage of public spending that represents - but it is tiny, fragmentary. Scarcely substantive.

Returning to the chamber, Annabel Goldie challenged the FM over Audit Scotland.

Deploying the tack he would have used against Mr Gray, Alex Salmond said that both Labour and Tory UK governments were preparing to impoverish Scotland.

It was effective rhetoric - but in no way addressed the issue of how to cope with the medium-term challenge identified in today's report.

To be fair, Mr Salmond said both he and John Swinney were focused on making the best use of resources. But again, perhaps understandably, no detail for the future.

Tavish Scott stumbled somewhat. He quoted the FM as describing the Lloyds take-over of HBOS as the "deal of the century".

Mr Salmond produced the full quotation - which made plain he was interpreting Lloyds' view of the deal, while stressing his own considerable reservations.

Questions progressed - with, for example, Bill Aitken of the Tories offering the view that, whatever else is cut, police budgets must be protected. Translate that across Scotland, across other services which MSPs may want to cherish, and you can understand the extent of the challenge.

As to this year's budget, there can be no serious offstage discussions until Glasgow NE is by.

As to the future, this is a problem for MSPs of all parties - and for the whole public sector.

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