Scottish Government
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Finance Ministers brand cuts “unnecessary”

Swinney warns of “clear threat” to public services.

Finance Ministers from all three Devolved Administrations have issued a joint warning that UK austerity plans “present unnecessary risks to our public services”.

In a joint statement, Finance Ministers from Scotland, Wales and Northern Ireland have warned that the Chancellor’s ongoing programme of cuts would reduce public spending in the UK too fast and too far.

Writing to Chief Secretary to the Treasury Greg Hands, Ministers have called for early engagement in the Spending Review process. The letter was signed by Deputy First Minister John Swinney, Arlene Foster of the Northern Ireland Executive, and Jane Hutt of the Welsh Government.

Mr Swinney said:

“The UK Government’s broken austerity programme is reducing household income, damaging economic confidence and weakening public finances. That represents a clear threat to our public services.

“The recent Budget was misguided and deeply unfair, with disproportionate cuts falling on the poorest and most vulnerable sections of society while giving tax breaks to the better-off.

“The three Devolved Administrations agree that ongoing austerity presents unnecessary risks to our public services. The planned announcement of the UK Spending Review in late November leaves little time for setting our own budgets before 2016-17, presenting significant operational challenges and potentially constraining the time available for Parliamentary process.

“We therefore need early engagement to help us understand, as fully and as early as possible, the shape of likely funding settlements from the Spending Review.

“The Scottish Government will continue to argue against the failed austerity programme and speak up for the policies to promote economic growth, protect our public services and help the most vulnerable in society.”

Notes To Editors

The full text of the joint letter to the Chief Secretary to the Treasury, Greg Hands, reads:

Thank you for your July correspondence to each of us as Finance Ministers in the Devolved Administrations regarding the Summer Budget announcement and the forthcoming Spending Review. We met on 6 August to discuss the issues raised in your letters and other matters of mutual interest and enclose a copy of a joint statement that we issued following that meeting. This letter sets out our joint comments.

The three Devolved Administrations share the view that the UK Government’s on-going austerity plans, reflected in both the in-year spending reductions announced on 4 June and in the Summer Budget, continue to reduce public spending in the UK too fast and too far, and present unnecessary risks to our public services. We also share the view that the UK Government’s plans were developed and communicated in an unsatisfactory way, with neither advance notice nor apparent consideration of the implications for the Devolved Administrations. We are prepared to respect fully any requirements of confidentiality laid on us about budget matters that may be discussed in advance of announcements. Early engagement would be productive for both HM Treasury and ourselves.

We welcome your commitment to engage with us on a number of the measures in the Summer Budget, including proposals for using the reformed Vehicle Excise Duty to fund future spending on roads and determining a fair way to resolve the implications of the announcement on social housing rents. However we were surprised that your letters omitted the proposed Apprenticeship Levy. As skills training is a devolved matter, the Devolved Administrations should be fully involved in the development of the Levy and associated administration and expenditure arrangements. 

Turning to the Spending Review this autumn, the planned announcement date of 25 November leaves very little time for setting our own budgets before the beginning of 2016-17, presenting us with significant operational challenges and potentially constraining the time available for respective parliamentary and assembly processes. There will in addition be considerable difficulties for our delivery bodies and stakeholders who will have little notice of their future allocations. We therefore seek early engagement with you during the Spending Review process to help us understand as fully and as early as possible the shape of likely funding settlements for the Devolved Administrations.

We note that Finance Ministers from the Devolved Administrations have not met Treasury Ministers jointly since November 2013. We therefore propose an early quadrilateral meeting as soon as possible following the summer recess, to discuss current issues. This should include plans for updating inter-governmental fiscal arrangements. As you will know, the Statement of Funding Policy was last updated in 2010, and there have been significant changes since then, including devolution of taxes and new borrowing powers. It would be very helpful if a date could be put in diaries soon.

We look forward to a meeting at the earliest opportunity.





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