Revealed: SNP plan to cut £1 bn of public sector 'waste'

The Herald Scotland

5 hours ago

A major review of civil service is also understood to be under consideration with the Scottish Government's 55 directorates potentially facing a restructure and a reduction in their number.
It is expected that the cash-saving proposals will highlight too the possible need to "consolidate" Scotland's 130 quangos with mergers between bodies potentially being undertaken to save public cash.
The announcement, to be made by public finance minister Ivan McKee in a statement to Holyrood later this week, comes as the First Minister seeks to refocus on public service delivery.
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Addressing public sector leaders in Glasgow yesterday John Swinney said Scotland's public sector will inevitably shrink as services look to innovations like AI.
The First Minister told leaders in the public and third sector his government plans to embark on a 'renewal' of public services by harnessing new technologies.
He also noted the findings of the Commission on the Future Delivery of Public Services in Scotland, chaired by Dr Campbell Christie in 2011, which had been tasked by Mr Swinney with examining the long-term challenges facing public services—including budget pressures, demographic change, rising demand and persistent inequalities.
The Commission's report called for community-driven, preventative and collaborative approaches to address these systemic challenges.
Key recommendations included prioritising prevention to reduce long-term costs, enhancing performance through technology, and closer working across sectors.
Mr McKee's strategy to be unveiled on Thursday comes a week ahead of the Scottish Government's publication of its medium term fiscal strategy and follows warnings of a challenging financial landscape for John Swinney's administration.
In its latest five-year outlook last month the fiscal watchdog, the Scottish Fiscal Commission, forecast that the country's public finances will come under increasing strain over the next five years, due to rising welfare costs, sluggish economic growth and an £851 million income tax black hole.
Public finance minister Ivan McKee will unveil the strategy on Thursday (Image: Scottish Government) The SFC said that while overall funding for the Scottish budget is forecast to grow, much of the increase will be absorbed by the rising cost of devolved welfare benefits, public sector pay settlements, and new policy commitments — such as the permanent scrapping of peak-time rail fares.
Last weekend the Scottish Conservatives promised they would cut back on public sector spending to save taxpayers £650m a year.
Addressing his party's conference in Edinburgh leader Russell Findlay promised to cull quangos, bring in business leaders to find cutbacks and slash red tape in the NHS and other public bodies.
But the Scottish Government is aiming to save more cash than the £650m a year pledged by Mr Findlay.
It is understood that ministers anticipate the proposals they are suggesting would save up to £1bn a year by 2029/30, with savings gradually increasing over the next five years as the programme gets underway.
Mr McKee said in February that the Scottish Government was willing to make "radical" reforms to the public sector and said ministers were focusing on reducing so-called "back office" costs in favour of frontline service delivery.
Mr McKee said: "We are very proud of the fact we have more doctors, more nurses, more police officers in Scotland and that we pay them quite a bit more."
He said the government was focused on reducing so-called "back office" costs.
"That's why the Scottish Government's head count went down last year, it's going to go down this year and it's going to do down next year by not hiring as many people," the minister told the BBC.
"We've saved upwards of £200m over the last two years in more efficient procurement across the public sector and there's plans to extend that further."
The Scottish Government has committed to 'doubling down on reform and efficiencies' as part of its 10-year Public Service Reform (PSR) programme.
In its year's budget, Shona Robison set aside £30m for an Invest to Save fund in 2025–2026 'to catalyse efficiency, effectiveness and productivity projects".
The programme — which is being led by Mr McKee — aims to ensure that public services 'remain fiscally sustainable' by cutting costs and reducing demand.
The public sector accounts for about 22% of Scotland's workforce, compared to about 17% in the UK as a whole. Average public sector salaries are also around £2,000 higher in Scotland.
The government's core workforce shrunk by 3% between 2023 and 2024, though the civil service headcount rose by more than 80% between 2015 and last year.
Scottish Conservative shadow finance secretary Craig Hoy said: 'John Swinney's empty pledge is actually a damning indictment of his own SNP government.
'He's freely admitting that the SNP are wasting £1billion of public money every year, at the same times as imposing ever-increasing taxes on hard-working Scots.
"The idea that the man who has presided over Scotland's bloated public sector and expanding quango culture can now be trusted to reverse it is laughable.
'The Scottish Conservatives have been pointing out for years that the SNP's burgeoning client state was unsustainable and we have outlined clear measures to take an axe to public-sector waste.
'In contrast, John Swinney is paying lip service to public anger. He's addicted to frittering away taxpayers' money and can't be trusted with the nation's finances.'
Public spending watchdog Audit Scotland said in a report in November 2023 that reform of "the public sector is needed to deal with longer-term financial pressures".
It said: "The Scottish Government needs to work with its partners to clearly set out how the design and delivery of public services will need to change. Understanding the overall assets and liabilities within the Scottish public sector would support this. But the Scottish Government has made no progress on developing a devolved public sector account, despite this being a commitment since 2016."
The Scottish Government was approached for comment.