At the end of July the “Independent Budget Review” (IBR) – set up by the SNP minority government as part of its deal with the Scottish Tories to secure their support for this year’s government budget – published its findings.
The Review was carried out by Crawford Beveridge (former Chief Executive of Scottish Enterprise and also a former Vice-Executive-President of Sun Microsystems), Robert Wilson (a partner in Deloitte Consulting in Edinburgh) and Sir Neil McIntosh (former Chief Executive of Strathclyde Regional Council).
Speaking at the launch of the Review, Scottish government Finance Secretary John Swinney claimed that the three men would “bring a wealth of public and private sector expertise to the Review.”
But the Review’s findings and recommendations, which will “inform” public and parliamentary debates in advance of this autumn’s Comprehensive Spending Review, demonstrate that what they actually brought was years of experience of attacking jobs, wages and services.
According to the Review, cuts of £2 billion (7%) need to be made in next year’s Scottish budget alone. Annual cuts amounting to £3.7 billions (12.5%) need to be made by 2015. Over the next 16 years, says the Review, £42 billion worth of cuts have to be implemented.
By 2015, according to the Review, up to 50,000 jobs will need to be axed (amounting to every tenth job in the public sector workforce in Scotland). Alternatively, “only” 29,000 jobs would need to be cut if a more vicious pay “restraint” policy was adopted.
The Review proposes an immediate recruitment freeze in the public sector and a two-year pay freeze from the 2011/2012 financial year. Unlike in England, there would not necessarily be an exemption for employees on less than £21,500 a year: a total pay freeze would reduce the number of jobs which “need” to be axed.
This pay freeze would be followed by another two years of pay “restraint”, with rises limited to between 2% and 3.1% a year. The SNP government’s council tax freeze should be scrapped, according to the Review, on the grounds that it is not “sustainable in the long term”. And “changes” (i.e. cuts) in public sector pensions are “essential and almost certainly unavoidable”.
The private and voluntary sector should play a greater role in delivering service traditionally provided by local authorities. Since the purpose of the exercise is to save money, this can only mean lower-quality services being provided by lower-paid employees (i.e. an intensification of what has already been underway for years).
The government’s “recycling of efficiency” programme, which supposedly allows savings made out of efficiencies to be reinvested in the public sector, should also be scrapped. Instead, “efficiency savings” would (supposedly) cushion the impact of cuts in budget allocations.
The Review proposes a wide-ranging cull of public services, including the “flagship” policies of the SNP government, and the creation of another review to look in more detail specifically into cuts in all free universal services.
In order to point any subsequent review in the right direction, the IBR suggests: raising the age limit for concessionary travel from 60 to 65, or restricting the entitlement to free travel to non-rush-hour periods; postponing plans to scrap all prescription charges; scrapping free personal care for the elderly; and reintroducing tuition fees or a graduate tax for students.
Other proposals put forward by the Review for further consideration include: scrapping plans to end tolls on the Forth and Tay bridges; the introduction of road-charging; the effective privatisation of Scottish Water; and a more prominent role for the Scottish Futures Trust (the SNP’s equivalent of PFI) and for private borrowing by the government.
In order to avoid the kind of social explosions which have occurred in Greece – of which the Review’s members are, in their own words, “cognisant” – the Review urges politicians from all parties to work together in a spirit of consensus, jointly deciding on and sharing responsibility for the cuts.
The SNP has promised to “give consideration” to the Review’s findings, whilst also promising not to make any cuts in NHS spending. But given that the SNP shares the Review’s starting point (i.e. that cuts are inevitable), ring-fencing NHS spending will only mean even more savage cutbacks in local authority spending.
In turn, the Convention of Scottish Local Authorities has denounced the SNP for promising to protect NHS spending on the grounds that it will mean that local authority budgets will suffer “disproportionate” cuts. In other words: Cut NHS spending in tandem with local authority spending!
Labour has sidestepped the Review’s findings by attacking the SNP for cuts which they have already made in previous years. (Labour is odds-on to win an absolute majority in next year’s Holyrood elections. They can hardly denounce the cuts proposed by the Review when, in the absence of a campaign which forces them to do otherwise, they could find themselves in charge of implementing the cuts in a matter of months.)
But the most bland response of all to the Review has come from the Scottish TUC:
“Whilst the STUC would not wish in any way to challenge the goodwill or integrity of members of this review panel, it is a source of real frustration that bodies established to provide views on, or help to manage, the Scottish economy are increasingly drawn from a very narrow section of society, one largely insulated from the impact of job and spending cuts.”
The Review is proposing an across-the-board onslaught on public sector pay, public sector jobs, and public sector services. But the STUC, not withstanding all its frustrations, is at pains to emphasise the goodwill and integrity of the Review’s members!
In terms of organising a campaign against the kind of cuts being proposed by the Review, Unison (which condemned outright the Review’s proposals) is holding an open-to-all “Strategy Conference” in Glasgow on 4tSeptember and the STUC has called a demonstration in Edinburgh for 23 October (although the details have yet to appear on the STUC’s website).