What's behind the drive to cut public spending 'waste'?

The Herald Scotland

5 hours ago

Why does the Scottish Government need to cut spending in this way?
Mr Sousa explained: "The Scottish Government is not allowed to borrow cash to fund any day-to-day spending, so it must make sure that its spending matches its funding.
"This includes the block grant, as well any additional tax revenues from devolved Scottish taxes (including income tax) and the transfer of funds for social security devolution.
"The Scottish Government's more generous pay policy in recent years means that the average wage of public sector employees in Scotland is about 5% higher than the UK average.
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"Coupled with Scotland's larger share of employment made up of public sector workers, this creates significant pressure for the Scottish Government.
"The Scottish Government's social security system is also forecast to cost £2 billion a year more than the block grant adjustments [from the UK Government], between both devolved payments and payments without an equivalent outside of Scotland. This must be paid from a Budget that is only modestly growing year-on-year.
"If we project recent growth rates for expenditure on some of the largest areas – pay, procurement, funding for local government – and even under conservative paybill arrangements relative to recent years, spending would exceed the projected funding (using data from the SFC and applying that to the Spending Review settlement) by well in excess of £1 billion.
"And that's before we take account – for example – of any grants to third sector organisations or subsidies to public and private companies in charge of delivering transport."
How can the Scottish Government cut back on 'public sector inefficiencies'?
Mr Sousa: "If the Scottish Government doesn't want to change social security or tax, that would mean discretionary [or reduced] spending.
"It could mean fewer public sector employees – be it through redundancies or not filling vacant posts, although that runs the risk of not having the right skills to deliver the Scottish Government's priorities.
"It could also mean a less generous public sector pay policy, although that of course means more difficulty in avoiding industrial action. It could also mean cutting back on procurement spending, which has been growing – even if we abstract from the pandemic peak – by 7% a year in cash terms in recent times. And it could also mean less funding available for councils – although given the pressures in local government, that might mean difficulties in delivering services and pressure on council tax."
Is the Scottish Government's objective to cut waste by up to £1bn a year by 2029/30 doable?
Mr Sousa: "Every government always want to cut inefficiencies and not impact on service delivery.
"And of course there are things that could be better. Last week, the Fraser of Allander Institute highlighted that the UK Government's targets on efficiency stretch credulity in the Spending Review, and the Scottish Government's appear headed the same way.
"It's inconceivable that the exact same services will be delivered by spending £1 billion less. Rather, the Scottish Government will need to prioritise what really is important.
"To govern is to choose, and choices will be coming down the track. In some sense, the limits on borrowing the Scottish Government is subject to will make this hard to avoid by the end of the decade. The timetable doesn't seem impossible – but it'll take time to implement, and no doubt will mean real decisions about what to do and crucially what not to do."