Money, money, money
Right, calculators out again. More on the public spending details due to be announced later today.
The SNP manifesto for May said: “We know from the most recent UK budget that the Comprehensive Spending Review will allocate an additional £1.8bn to the Scottish Block.”
This afternoon, we’ll learn the outcome of the CSR. However, it’s been suggested to me that the result for Scotland will be at least an extra £3bn over the three years covered by the review – 2008-11.
How’s that calculated? Take the existing Scottish Block, top it up by 2.5 per cent per annum to cover forecast inflation.
Then top it up again by 1.6 per cent annually. That’s the UK Government’s calculation of the growth rate in Scottish spending. Result: £3bn + more.
Everyone OK, then? Well, no. Far from it. SNP Ministers say that’s comparing apples and pears. Plus they suspect there’s a worm at the core of the apple.
Firstly, they contest the 1.6 per cent growth rate. They say that the baseline has been recalibrated, making the growth rate look more than it actually is.
Crucially, they’re not suggesting that’s been done for Scotland alone. Rather, they say the recalibration principally affected the NHS in England – with Scotland experience consequentials through the application of the Barnett formula.
Why does this matter? Because, if you recalibrate, you’re starting from a different – and, in this case, lower base. So the top up money appears, in percentage terms, more generous.
Labour response? Recalibration happens regularly – and is part of the Treasury mechanism.
Plus, if Scotland’s base has been shrunk by Barnett, then the top-up, again via Barnett, is proportionately better. Precisely, say the SNP, it’s a ruse.
But hold on. Treasury says £3bn increase. SNP forecast £1.8bn. What’s the problem?
Well, this. The £3bn figure includes money to cope with inflation. The £1.8bn doesn’t.
SNP Ministers say that when they forecast “an additional £1.8bn to the Scottish Block”, that was growth over and above inflation.
They point to an analysis of the various parties Scottish spending plans, conducted by the Centre for Public Policy for Regions.
That estimated that the CSR would be worth “an additional spending capacity” of almost £3.4bn over three years. So, say the SNP, if the Treasury is now talking about £3bn, that’s less than analysts expected. QED.
But, says Labour, the £1.8bn figure in the SNP manifesto didn’t have any caveats attached. Nor did the spending promises.
At this point, we return – almost thankfully – to raw politics. In essence, Labour will say: “You’ve got buckets of cash. OK, it’s tighter than in the past – but you shouldn’t have made costly promises you can’t keep. You knew this was coming. You said you’d need to make efficiency savings. Make them.”
The SNP will say: “It IS tighter than in the past. And it’s even tighter than you’re claiming. We’ll make efficiency savings – but don’t try to tell us this is a good deal. It’s lousy.”
PS: Perhaps I should respond to the little spat which has developed over comments in my previous blog, Pounds and Pence. The reference to “exaggerated, uncosted promises” in the SNP manifesto was a reflection of the Labour view.
When I used that phrase, I was quoting. Not endorsing. Quoting. It was attributed to Labour.
The clue is in the preceding line which began: “Labour says”.
If that wasn’t 100 per cent clear, then my apologies. Again, I was quoting. Not supporting or condemning.
I know it can be exasperating, as a reader, when you are perhaps looking for your own opinions to be sustained, rather than for analysis.
But, hey, that’s journalism. For the avoidance of any doubt, it is the only –ism to which I subscribe. (With the exception of fanatic-ism directed towards the boys in Tangerine.)