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Draft Scottish Budget 2010-2011
17/09/2009
The Scottish Government will protect frontline services, despite having to wrestle with the first real terms cut in its budget since devolution, John Swinney said today.
Presenting the draft budget for 2010-2011, the Cabinet Secretary for Finance and Sustainable Growth stressed that the Government's approach has been to protect programmes that matter most to the people of Scotland.
These programmes are:
- spending on frontline public services, such as schools and hospitals
- on the economic recovery plan, including support for hard pressed businesses and action to protect jobs and employment
- those that protect households at a time of economic hardship
Today's budget shows the Scottish Government's Departmental Expenditure Limit Budget - the money over which it has direct control - will reduce in real terms by 0.9 per cent compared to this year.
This is a result of the £500 million cut in planned expenditure for 2010-11 imposed on Scotland by the UK Government, and accelerated capital expenditure.
Mr Swinney said:
"At a time when many businesses and families are facing the challenges brought by the recession, it is imperative for government to respond effectively and decisively to support them.
"We have had to face difficult choices about where to reduce planned spending next year. We will meet this challenge while continuing to work with our partners to achieve our priorities and protect programmes that matter most to the people of Scotland.
"Crucially that will mean protecting spending on frontline public services, such as schools and hospitals. It will mean ongoing investment in our economic recovery plan, including support for skills development and for hard pressed businesses; and on programmes that help protect households at a time of economic hardship."
Mr Swinney added that in order to deal with the £500 million cut:
- portfolios have been asked to bear down on their own Resource budgets in ways that do not impact on the government's priorities and our frontline services
- the Scottish Government Administration budget will be cut by £14 million in 2010-11
- local government will take their pro-rata share of the Chancellor's cuts. Scottish local authorities have indicated that they are prepared to manage within these reduced spending totals, and to approach the resultant challenges - which will be significant - in a spirit of partnership
- additional resource savings will be found by asking departments to reduce spending on a number of projects and programmes. These have been selected to minimise their impact on our immediate priorities and include giving up £20 million set aside next year to prepare for the introduction of a local income tax
The UK Budget published in April 2009 set out a reduction in the Scottish Government's 2010-11 DEL Resource budget of £392 million and a further reduction of £129 million to the Scottish Government's DEL Capital budget as a result of a cut the UK Government has made to the Department of Health's Capital baseline. The cuts that were announced in the Budget, offset by a small increase of £25 million in consequentials, mean that the departmental expenditure limit budget will in 2010-11 be reduced by £496 million compared to the limit set out in the Spending Review 2007 document.
The Scottish Government is facing a real terms cut in the budget in 2010/2011 compared to 2009-2010. The Departmental Expenditure Limit (DEL) budget for 2010-11 - Resource and Capital - is £177 million up in cash terms on the corresponding budget for 2009-10, but in real terms that is a reduction of 0.9 per cent or £268 million using the Treasury's published GDP deflator of 1.5 per cent for 2010-11. The government's spending power will therefore fall by 0.9 per cent compared to what it is this year.
Departmental Expenditure Limit is the funds available to departments through the operation of the Barnett Formula. Allocations within the Scottish Block Grant are determined by Scottish Ministers. DEL spending is discretionary.
World First - Carbon Assessment of the Draft Spending Plans
The Scottish Government has become the first administration in the world to produce a carbon assessment alongside its budget. In a unique move, the first Carbon Assessment of the Budget for 2010-2011 was published.
The assessment is based on the expenditure data presented in the Draft Budget and will be a statutory requirement of Scotland's world-leading Climate Change (Scotland) Act. It provides a high-level understanding of the impact of Scottish Budget expenditure on global greenhouse gas emissions and provides - for the first time - an understanding of the carbon impact of Government spend.
Mr Swinney added:
"The Scottish Government recognises that climate change will have far reaching effects on Scotland's economy, its people and its environment and is determined to play its part in rising to this challenge.
"By publishing our Carbon Assessment of the Budget, we are taking a significant, and to some extent experimental, step towards recognising carbon implications in the Budget process."
"The Scottish Government is not aware of any other government in the world committed to delivering this work with their budgets and - once again - Scotland is proving to be a world leader in addressing climate change.
"It is vital to have analysis available to help inform critical decisions on how to take appropriate action during these challenging economic times. Preparing a Carbon Budget Assessment is a step forward in this process.
"It is essential that we have an accurate picture of the present world situation we are now and demonstrating the size of the task now facing the modern world as a whole. The Scottish Government is committed to taking appropriate action to ensure we will reach our targets."
The Climate Change (Scotland) Act:
- introduces a statutory target to reduce Scotland's greenhouse gas emissions by at least 80 per cent by 2050
- establishes an interim target of at least 42 per cent emissions reductions by 2020. There is a power to vary the interim target, and Scottish Ministers are committed to delivering the highest achievable emissions reductions based on expert advice from the UK Committee on Climate Change
- establishes a framework of annual targets; and includes emissions from international aviation and international shipping
The Government has also published a report on developing methods to assess the emissions impacts from individual Government policies. Having a clear picture of the possible impact on emissions from policy action is an essential complement to the assessment of the draft budget. Together these assessments will inform the development of the policies necessary to meet the challenges associated with reducing emissions efficiently and effectively.