Mr Mackay defended his budget by saying "Let me be clear, I will not pass the costs of UK austerity on to the household budgets of the lowest-income taxpayers"2 and in the budget document itself stated “The UK Government’s approach to public spending is having a significant detrimental effect in Scotland”3.
The problem here is that - as so often with the SNP - the rhetoric is plainly at odds with the facts. I’ve taken the time to study the actual figures in some detail, and it’s clear that attempting to blame UK Government austerity for cuts in Scotland’s 2017-18 budget is nothing short of blatant deception.
All you need to understand to realise that Mr Mackay is trying to pull the wool over our eyes is this simple graph showing the Total Scottish Budget in real (inflation adjusted) terms over the last 10 years. [Note y-axis does not start at zero]
I expect a lot of people in Scotland will find this graph hard to believe. After all, we hear so much from the SNP about Tory austerity that few would expect the real-terms trend in Scotland’s budget to be upwards over the last four years – but that is the reality. In fact, if you look carefully at the graph, you’ll see that Scotland’s Budget is now (just) higher in real terms than it was in 2009-10 before austerity cuts started to bite.
How come this plain reality isn’t common knowledge? Well the simple fact is that the SNP have gone out of their way to hide this information. If you take the time to look up last week’s budget report, you’ll find the summary tables they include show data for 2010-11 but then just miss out the four intervening years to 2014-155. That’s the first step they take to disguise the reality of the rising budget trend.
The second step they take is to bury this Total Budget information deep in an Appendix on page 169 of the report. They use the up-front summary tables to instead focus on a few sub-totals that exclude things like Annually Managed Expenditure (AME) which, for example, pays for NHS and teachers’ pensions4.
In some highlighted figures they even exclude Capital Borrowing4. This is a devolved power that enables Scotland to spend more by taking on further debt in addition to that we share with the rest of the UK. It’s a critical and growing source of funding for Scotland and it’s hugely misleading to focus on figures that omit it.
The third step they take is to distract from the budget year that’s actually being announced by providing a pretty meaningless longer term forecast. The longer term forecast they made last year has already been shown to be far too pessimistic6. To illustrate how flaky their latest forecast is, despite the clear commitment from the SNP to deliver a 50 per cent reduction in the “overall tax burden of APD” (Air Passenger Duty), their forecast makes no allowance for this £171m headline revenue loss4.
As an aside, it’s also the case that by the end of their forecast period the Scottish Government will control roughly half of the revenue raising powers involved. So when they forecast a real terms decline in “Fiscal DEL” (a subset of the total budget that excludes among other things, AME and capital borrowing), the Scottish Government appears to be forecasting that their own economic strategy will fail.
So by missing out intervening years, focusing on a measure which excludes very significant sources of revenue and stretching to an unrealistically pessimistic forecast year, the SNP are able to engineer a figure which appears to suggest “Westminster austerity” is causing the budget to decline. In fact, as the graph clearly shows, the opposite is true.
The reality of our fiscal framework agreement with the rest of the UK is such that the SNP is lucky enough to preside over a spending budget that’s rising in real terms.
The fact that the SNP are cutting Central Government funding to local government is their choice, not something that’s forced upon them - just as the fact that the SNP don’t use their income tax and benefits top-up powers to reduce tax for low-earners, redistribute wealth and address inequality is their choice.
Next time you hear UK austerity being blamed for specific Scottish budget cuts, remember this simple fact: over the four years from 2013-14 to 2017-18, the Total Scottish Budget has been increased in real terms by £1.9bn or 5.4% .
It really is long past time the SNP stopped blaming Westminster for their own failings.
1. Table 9.02: Local Government and Central Government Grants to Local Authorities
3. page 2 of Budget Report
4. I provide a full audit-trailed explanation of the various figures on an historical like-for-like basis here: this table shows the sources I needed to access to create it (it was hard work)
5. See Tables 1.01 and 1.02 pages 3 and 4
6. See Spinning the Scottish Budget: Part II
6. See Spinning the Scottish Budget: Part II